On July 14, 2015, Canada and Ukraine signed the Canada-Ukraine Free
Trade Agreement (the “CUFTA”). As at January 1, 2016, Canada has not
released the test of the CUFTA. Also, on January 1, 2016, the Ukraine-EU
Free Trade Agreement came into effect. This means that Canada is behind
the larger EU. This means that Canada needs to move quickly before
certain opportunities are filled by exporters in the EU.
The CUFTA is a trade in goods agreement. It does not cover
services or investment. The CUFTA includes chapters in the areas of
market access for goods; rules of origin and origin procedures; trade
facilitation; emergency action and trade remedies; sanitary and phytosanitary
measures; technical barriers to trade; government procurement; competition
policy, monopolies and state enterprises; intellectual property; electronic
commerce; labour; environment; trade-related cooperation; institutional
provisions; and dispute settlement.
Upon entry into force of the CUFTA, Ukraine will immediately eliminate
tariffs on 86% of Canada’s current exports, with the balance to be phased out
or subject to tariff reductions over periods of up to seven years. Ukrainian
tariffs will be eliminated on all Canadian exports of industrial products
(including aerospace, automobiles, medical-testing equipment, industrial
machinery, and chemicals and plastics), fish and seafood, and agricultural
products (including cranberries and cherries from British Columbia, processed
foods from Ontario and Quebec, Prince Edward Island potatoes, Prairie grains
and pulses, Annapolis Valley apples, beef, pork, pet food, soybeans, canola
oil, animal feed, and maple syrup).
Key Canadian industrial products
benefiting from the elimination of tariffs include certain articles of iron and
steel, articles of plastics, cosmetics, reservoir tanks and similar containers,
and air compressors. Manufactured goods sold to Ukraine include medications,
coking coal, pharmaceutical cultures, boring or sinking machinery, trailers and
semi-trailers, and certain tractors.
Upon entry into force of the Agreement, Canada will immediately
eliminate tariffs on 99.9% of current imports from Ukraine. This includes
elimination by Canada of tariffs on all industrial products, fish and seafood,
and 99.9 percent of agricultural imports from Ukraine. Key products from
Ukraine that will benefit from this duty-free access include sunflower oil,
sugar and chocolate confectionery, baked goods, vodka, apparel, ceramics, iron
and steel, and minerals.
It is important for Canada for move quickly because the EU sells some of
the same products as Canada. The next step in the ratification process in
Canada is for the text of the CUFTA to be released. The next step after
that would be for the CUFTA to be tabled in the House of Commons for
review. Canada also needs to table the Canada-Ukraine Free Trade
Agreement Implementation Act in the House of Commons and it
must pass the House and the Senate. The Canada-Ukraine Free Trade
Agreement Implementation Act will contain the changes necessary to ensure that
the agreement can take effect under Canadian law. For example, the tariff
elimination and reduction schedules must be implemented via changes to the
Customs Tariff.
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