A free trade agreement (FTA) with Ukraine could benefit many sectors of the Canadian economy, most notably agriculture including grains, pork, beef, pulses, animal feed and pet food, and processed food. In these sectors, Ukrainian tariffs range from 8-14%. An FTA would also better position Canadian services suppliers relative to competitors in the Ukrainian market, and provide enhanced transparency and predictability for Canadian investors.
Canada and Ukraine enjoy positive commercial relations. Two-way merchandise trade totaled $286.5 million in 2011. Canada's main agricultural exports to Ukraine include ethyl alcohol, pork, corn seed, animal feed and pet food and soybeans. Canada’s main non-agricultural exports to Ukraine include fish and seafood, machinery, pharmaceuticals, tractors and other vehicles, and electrical machinery. Main imports include iron and steel products, coal, mineral fuel and oil, and chemical fertilizers.
Geographically, Ukraine is the largest country in Europe, is home to a highly educated population of 46 million (2010), and has a diversified industrial base and substantial natural resources. Canada, the first Western country to recognize Ukraine’s independence in 1991, supports Ukraine’s democratic transformation, economic reforms and its efforts to integrate into Euro-Atlantic institutions. Canada is also the sixth largest bilateral donor of technical assistance to Ukraine.
Ukraine became a member of the World Trade Organization in May 2008. In addition, Canada and Ukraine have signed a Foreign Investment Promotion and Protection Agreement (1995), a Convention for the Avoidance of Double Taxation (1996), a Nuclear Cooperation Agreement (1999) and an Air Transport Agreement (1999).
An FTA with Ukraine has the potential to provide increased access for Canadian goods and services to the Ukrainian market, to help address non-tariff barriers, and to help advance other trade and investment issues to facilitate economic relations. An FTA that provides Ukraine with better access to the Canadian market would also be consistent with Canada’s foreign policy objectives for Ukraine, which support Ukraine’s democratic transformation and economic reforms.
On June 15, 2010, the Honourable Peter Van Loan, former Minister of International Trade, announced that Canada and Ukraine launched negotiations on a bilateral free trade agreement (FTA) in mid-May of that year (see News Release: Canada-Ukraine Free Trade Negotiations Underway).
Five rounds of negotiations have been held to date. The first and second rounds of negotiations took place in Kyiv, Ukraine, in May 2010 and May 2011 (see News Release: Canada Concludes Second Round of Free Trade Negotiations with Ukraine). A third round of negotiations was held in November 2011 in Ottawa and a fourth round in April 2012 in Kyiv. The fifth round was held during the week of September 24, 2012 in Kyiv.