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Ukraine’s ambassador to Canada promotes trade deal between ‘symbol’ and ‘new frontier’ of the free world
OTTAWA – Since taking up his post as Ukraine’s ambassador to Canada in late 2015, Andriy Shevchenko has spent most of his time with journalists talking to them about Russian aggression in his country.
So when there’s a good-news story, such as the official launch of the Canada-Ukraine Free Trade Agreement (CUFTA) on August 1, the 41-year-old former journalist and Ukrainian national deputy hauled out the wine, cheese and fresh cherries on July 28 for media invited to the Ukrainian Embassy to first hear from the ambassador and officials from both countries about how CUFTA will benefit both – in Ambassador Shevchenko’s words, Canada, “the symbol of the free world,” and Ukraine, “a new frontier of the free world.”
Access to major markets and expertise from both sides of the trade pact are key to CUFTA’s success.
As Canada awaits the final ratification process of its trade agreement with the European Union, which Ukraine already has implemented through its own trade deal with the EU, Canada can now enter a Ukrainian market of some 45 million consumers with a 99.7-percent literacy rate in Europe’s largest country by area. Ukraine encompasses 233,062 square miles, of which over 70 percent is agricultural land, and produces one-third of the world’s black-earth soil (known as chornozem).
With even fewer tariff-related restrictions, Ukraine now has access to the Canadian market of over 36 million consumers, and potentially a lot more through the North American Free Trade Agreement (NAFTA) among Canada, the United States and Mexico, which U.S. President Donald Trump’s administration wants to overhaul. (Ukraine does not have a free trade deal with the U.S. but a Ukrainian company could bring part of a product to Canada, add something to it in Canada and export the final product to the U.S. under the current version of NAFTA.)
CUFTA also provides Ukraine with better conditions for the elimination of tariffs than what Canada enjoys under the agreement. It immediately wipes out 98 percent of duties on Ukrainian agricultural and industrial goods.
Within seven years, almost all tariffs will be dropped when Ukrainian cars will be exempt from Canadian duties. But the rate will never reach 100 percent, since Canada maintains domestic agricultural quotas on some products, such as milk, butter, cheese and eggs.
Canada also will never reach total duty-free access to Ukraine under the new trade deal, which right now eliminates tariffs on 72 percent of such Canadian goods as seafood, grain crops, chocolate, beer and wine, textiles, and iron and steel products. Over the next seven years, Ukrainian duties will drop from a variety of Canadian goods, from meat and motorbikes, to milk and honey to bring the duty-free rate to 99 percent.
Under CUFTA, tariffs will be waived for products delivered through e-commerce. Therefore any books, event tickets, clothing or household goods purchased online from either country will be exempt from customs duties.
Ambassador Shevchenko and Oleh Khavroniuk, Ukraine’s trade commissioner in Canada, hope that CUFTA will result, as is the case with previous free trade agreements Canada has entered into, in a boost in bilateral business within two years of the agreement’s implementation.
Any increase would be welcome, since the current trade picture between Canada and Ukraine is “peanuts,” said Ambassador Shevchenko.
According to Ukraine’s State Statistics Service, the total value of trade between Canada and Ukraine in 2016 was $505.9 million Canadian (about $405 million U.S.). Most of that ($363.2 million Canadian, or about $291 million U.S.) benefited Canada through exports in such goods as seafood, pharmaceutical products and nuclear reactors. In fact, Canadian exports increased by 5 percent last year when Ukrainian exports to Canada for such products as soybeans, sports equipment and wood, were valued at $142.7 million Canadian (or about $114 million U.S.). |
