Canada and Ukraine to modernize CUFTA

Participants of the webinar sponsored by UCPBA Calgary on March 18

Marco Levytsky, NP-UN Western Bureau Chief.

Canada and Ukraine have decided to modernize the Canada Ukraine Free Trade Agreement (CUFTA) participants at a webinar sponsored by the Ukrainian Canadian Professional and Business Association of Calgary (UCPBA Calgary) were told March 18.

Petro Petrenko, Trade Commissioner/Counselor for Economic Issues of the Embassy of Ukraine in Canada, state that from February 15 to March 16, 2020 the Government of Canada conducted public consultations on the possible modernization of CUFTA and the majority of submissions conveyed support for this initiative.

“As the Government of Canada says in general, Canadians see value in modernizing the CUFTA as a means to further strengthen Canada and Ukraine’s bilateral commercial relationship and people-to-people ties and to build on Canada’s current engagement with Ukraine. They also recognize the strategic importance of pursuing stronger trade rules and increased transparency in support of Ukraine’s democratic and economic reforms.

“In light of the existing scope of coverage of CUFTA, which immediately eliminated tariffs on 86% of Canadian merchandise exports upon entry-into-force, submissions largely focused on opportunities to expand the agreement to cover services and investment, as well as address various types of non-tariff barriers. Stakeholders also noted that CUFTA modernization would provide the opportunity to include new provisions to reflect Canada’s inclusive trade objectives, including chapters for gender, small and medium-sized enterprises (SMEs), and Indigenous peoples,” Petrenko said.

“We hope that upgrading Canada-Ukraine Free Trade Agreement and adding new chapters in particular related to services and investments will definitely have a positive impulse for our trade, and will give another tool to protect investments,” he added
Speaking with New Pathway – Ukrainian News after the webinar, Petrenko said that negotiations for the modernization will begin as soon as both countries have received the mandate to do so. Negotiations are expected to last more than a year.

In its report on the consultations, posted on March 21, 2020, Global Affairs Canada noted that it still open to feedback from stakeholders.

It also stated that stakeholders were supportive of seeking the inclusion of chapters on cross-border trade in services, financial services, telecommunications, temporary entry for business persons, and investment, as well as a modernization of the existing e-commerce chapter. Some stakeholders referenced non-tariff barriers and cited challenges associated with Ukraine’s business climate, especially for foreign investors in Ukraine, which represent persistent obstacles to trade and investments. Other concerns raised included burdensome customs procedures.

In his presentation, Petrenko said CUFTA includes 19 chapters and covers a wide range of bilateral trade matters. Among them:

• The regulation of non-tariff technical barriers to trade;
• Eliminating duties that relate exclusively to the goods originating from Ukraine or Canada;
• Trade facilitation procedures;
• Emergency action and trade remedies;
• Sanitary and phytosanitary measures;
• Government procurement; and
• Electronic commerce.

“We advise both Canadian and Ukrainian businesses to use Canada Tariff Finder Tool to check online tariff information for the specific product you want to export or import,” he said.

Petrenko noted that preliminary estimates by the Kyiv School of Economics show that after signing the CUFTA, Ukraine’s exports of goods to Canada have been steadily growing and expanding much faster compared to other trade partners – up by 70% in 2017, 55% in 2018 and 9.4% in 2019 (as reported by Ukraine). However, Canada’s total exports to Ukraine contracted during 2018-2019, with a significant drop of almost 30% in 2019 largely due to decreasing coal supplies. At the same time, Canada’s non-coal export to Ukraine has been growing: from US$90 million in 2016 to US$115 million in 2019 or by 28% (as reported by Canada).

In closing, Petrenko drew participants’ attention to the recently launched Ukraine.ua official digital portal. It will have updates about Ukraine, its sightseeing attractions and history, as well as investment, trade, and innovation programs.

He quoted Foreign Affairs Minister Dmytro Kyleba as saying: “The site should become a magnet for ordinary foreign tourists, businessmen, and students. All this is organized to attract extra attention to Ukraine and promote our country worldwide, strengthening its authority.”

Petrenko drew particular attention to the “Ukraine” photo bank which can be freely used to promote Ukraine abroad.

Greetings were brought by Ambassador Andriy Shevchenko who said the customs agreement is still to come and homework on both sides needs to be done.
“One thing we can do together is to convince the Canadian government to unlock resources of Export Development Canada and support those Canadian businesses that that are interested in working in Ukraine,” he added.

Shevchenko also encouraged business to work with the Consulate in Edmonton.
Special guest Elena Yanovskaya-Herweyer, CEO of Creative Director at Art Fresh, Inc. in Prince Edward Island said that Canadian businesses can find a lot of contacts with Ukrainian ones on the internet and offered her services to help with web design.

UCPBA Calgary President Darren Lemke hosted the event while Cassian Soltykevych served as moderator.