Economy

Poland’s losers shout down winners from EU’s embrace of Ukraine – POLITICO


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KORCZOWA, Poland — Truck driver Oleh couldn’t understand why he wasn’t allowed to take his haul back to Ukraine and rejoin his wife and three kids in Kyiv after being stranded on the Polish side of the border for almost a month.

“I’m just sitting here, and over there they’re being bombed … And they’re stressed, and then I get angry that I’m here and they’re over there,” he said, declining to give his full name for fear of retaliation from police officers who had cordoned off the parking lot seven kilometers from the Korczowa-Krakovets border crossing in southeastern Poland.

Huddled with other Ukrainian drivers around a makeshift fire to ward off freezing temperatures of minus 14 degrees Celsius, Oleh said he didn’t want to steal work from Polish truckers who have been protesting nearby since November.

“I just transport refrigerators,” he explained. “There’s a war going on, but people need refrigerators to store food.”

Along Poland’s 535-kilometer border with Ukraine, thousands of drivers like Oleh spent weeks queuing to get home through one of the commercial border crossings before Polish truck drivers lifted their blockade on Tuesday.

The Polish truckers, who had blocked the border since November and have vowed to return if the government doesn’t meet their demands, say Ukrainian competitors are undercutting them and transporting goods across the European Union, and not just between Poland and Ukraine.

Polish farmers have also staged protests over the past year against imports of Ukrainian agricultural products that, they say, are driving them out of business. The protests forced a minister in the previous government to resign last April and led Warsaw to impose an import ban on Ukrainian goods.

The move put Warsaw, one of Kyiv’s staunchest allies in its resistance to Russia’s war of aggression, on a collision course with its eastern neighbor and the rest of the EU.

Ukrainian officials accused Warsaw of hypocrisy for favoring a small sector while forgetting the huge benefits that Poland has reaped from the opening between the two countries. The real cause of the dislocation that has fueled the Polish protests is Russia’s aggression, they said.

The truckers’ blockade only escalated the tensions.

Ukraine fatigue

Poland’s new government, in office since December 13, has vowed to mend relations with Kyiv and the rest of the EU.

“The most important thing for us, as Europe, is to effectively support Ukraine,” Donald Tusk said on his first visit to Brussels as prime minister, the day before EU members agreed to begin the process of Ukraine’s accession to the bloc. 

“I cannot accept any kind of mood, apathy or Ukrainian fatigue … because we’re not only talking about Ukraine and Russian aggression but also about our future.”

The unrest seen in Poland has also flared in other eastern EU countries, with farmers and truckers in Romania taking to the streets and blocking border crossings with Ukraine this month. Farmers in Bulgaria plan to do the same.

Led by Poland, the EU’s eastern frontline countries warn that the border tensions are a sign of what’s to come if Ukraine is allowed to join the bloc without adequate protection for their most sensitive economic sectors.

But while Poland’s previous right-wing government, led by the populist Law and Justice (PiS) party, doled out subsidies to quell protests, Tusk is already emphasizing dialogue with Kyiv and seeking longer-term solutions to border tensions.

The renewed support for Ukraine has its limits, however, with Tusk vowing to protect domestic sectors such as transport and agriculture from what he described as unfair competition.

“Poles want to help Ukraine. But they should not be put at a disadvantage. And least of all by the Ukrainians themselves,” he said in his first media interview as prime minister on January 12.

Days later, his agriculture minister, Czesław Siekierski, warned: “The opening of the European market to Ukrainian agricultural products could lead to a complete destabilization not only of the domestic market, but also of the European market in the future.”

The doomsday scenarios recall those around Poland at the time of its accession to the EU in 2004.

At the time, Poland’s farm sector was based mainly on growing grain and other low-value products; its fledgling trucking industry exported goods to Belarus and Russia.

Several existing EU members, led by Germany and France, pushed for transitional arrangements and safeguard clauses, arguing that the country’s industries would pose unfair competition due to differences in regulations, wages and working conditions.

That didn’t stop Poland from fully integrating into the single market, and in the years since, the nation of 38 million has prospered.

New beginnings

By most measures, Poland has done very well since joining the EU — with economic output, trade and foreign investment all expanding significantly. Unemployment has fallen to 2.6 percent from 20 percent — the second lowest rate in the EU.

And despite the war, Poland’s economy has also found new opportunities in its relationship with Ukraine.

The country has become a major humanitarian hub for Ukraine, and its defense industry is booming thanks to demand from the Ukrainian armed forces. Ukrainian refugees — some 1.5 million of whom have stayed in Poland — have filled gaps in the job market. And, while Poland imports large quantities of some agricultural goods such as sugar and fruit from Ukraine, it also sends back other products like milk and cheese.

Even the Polish trucking industry is well placed to withstand Ukrainian competition. It has surpassed Germany’s as the largest in the EU and accounts for more than 6 percent of national GDP. It’s also a major employer — before Russia invaded Ukraine, Polish trucking companies employed more than 100,000 Ukrainians as drivers; another 25,000 came from Belarus.

“Of course, this is a challenge for some sectors of our economy, but it’s also an opportunity,” said Paweł Śliwowski, deputy head of the Polish Economic Institute in Warsaw. “It’s a chance or an impulse for some Polish sectors to move up the value chain.”

Instead of aimlessly trying to prop up ailing sectors like small-scale grain production, Poland should seek out opportunities from Ukraine’s integration, he added. “Wouldn’t it be worthwhile, instead of competing with Ukraine on some simpler goods, to expand into food processing, food packaging and so on, and then benefit more from synergies and cooperation with, for example, Ukrainian suppliers of these downstream products in the value chains?”

Amid the economic gains, there will be losers, Śliwowski acknowledged.

Not least in the regions directly bordering Ukraine.

Borderline

Truckers there used to transport goods to Belarus and Russia before both countries cut themselves off from the EU. As Ukraine’s own trucking sector grows, competition for those traditional routes would only increase, should they ever reopen.

And the region’s agricultural sector, unlike much of the rest of Poland, is dominated by smaller farms that grow wheat and other low-value products.

Farmers like Roman Kondrów, one of the protest leaders, say they fear that Ukraine’s integration into the bloc will end their way of life.

“We are not against the Ukrainian people,” he said. “We were the first to reach out to them, we were the first to take in refugees, it’s just that now we feel a sense of outrage. We’ve helped them so much, and all they want to do is take, take and take. This cannot continue.”

The 54-year-old, who lives a short drive from the Ukrainian border, has 100 hectares of land — a fraction of the average Ukrainian farm, which spans thousands of hectares: “We can’t compete with that.”

Lucia Mackenzie contributed.





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