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Nov 8, 2023
Adjourned
English Video1010
11:01:19
Info
Description Meeting No. 80 CIIT - Standing Committee on International Trade
Location Wellington Building - 415
Scheduled
Tuesday, Nov 7, 2023
11:01 - 13:00
1 Hour 59 Minutes
Actual https://parlvu.parl.gc.ca/Harmony/en/...
Tuesday, Nov 7, 2023
11:01 - 13:00
1 Hour 59 Minutes
Contact
Information
parlvusupport@parl.gc.ca
Information website
https://www.international.gc.ca/trade...
Modernized Canada-Ukraine Free Trade Agreement explained
Canada and Ukraine: United in Building a Prosperous and Secure Future
The Canada-Ukraine Free Trade Agreement (CUFTA), which entered into force on August 1, 2017, represents an important milestone in the Canada–Ukraine bilateral relationship. In addition to generating commercial benefits for Canadian businesses, the original CUFTA supported the economic reform and development efforts of the Government of Ukraine, and strengthened the Canada-Ukraine partnership for peace and prosperity. Further building on the achievements of the 2017 CUFTA, Canada and Ukraine announced the launch of negotiations for the modernization of CUFTA on January 27, 2022.
Canada and Ukraine have enjoyed close bilateral relations since Canada became the first Western nation to recognize Ukraine’s independence on December 2, 1991. Strong people-to-people ties between the two countries, with almost 1.3 million Canadians of Ukrainian heritage, further reinforce the bilateral relationship.
Although there was an upsurge in trade and investment in the early 1990s following Ukraine's independence, there remains potential for further growth in bilateral trade and investment between Canada and Ukraine. Thanks in part to opportunities facilitated by the 2017 CUFTA for Canadian and Ukrainian businesses, Canada-Ukraine bilateral trade reached its highest total ever in 2021. Canada’s merchandise exports to Ukraine totalled $219 million and the merchandise imports from Ukraine amounted to $228 million.
However, the Russian invasion in February 2022 and the resulting war in Ukraine has had a negative effect on our overall bilateral trade and investment, leading to a 31% fall in Canada’s exports to Ukraine. In 2022, Canada’s merchandise exports to Ukraine totalled $150 million and merchandise imports from Ukraine totalled $271 million. Canada’s top exports to Ukraine in 2022 were armoured vehicles and their parts, fish and seafood, pharmaceuticals, machinery, and private donations, while Canada’s top imports from Ukraine were animal and vegetable fats and oils, iron and steel, and electrical machinery and equipment. Canadian direct investment in Ukraine stood at $112 million in 2022.
Two-way merchandise trade between Canada and Ukraine (value in millions of Canadian dollars)
Two-way merchandise trade between Canada and Ukraine (value in millions of Canadian dollars)
Text version
As part of Canada’s continued support to Ukraine following the Russian invasion, negotiations for the modernized CUFTA went ahead as a basis to support prospects for long-term security, stability and economic recovery in Ukraine. Canadian and Ukrainian officials conducted negotiations from May 2022 to April 2023, including on new areas not part of the original agreement, such as investment, trade in services and inclusive trade, among others.
The modernized agreement will also maintain the terms of market access for goods from the 2017 Agreement that are of interest to various Canadian industries. Ukraine remains a promising emerging market for Canadian exporters, with opportunities in multiple sectors and CUFTA will continue to enable Canadian exporters to take greater advantage of these opportunities by ensuring improved market access conditions, including the elimination of tariffs by January 1, 2024, when all tariff schedules will have run their course.
Continuing Market Access Opportunities for Manufactured, Agricultural, and Fish and Seafood Products
Manufactured Goods
CUFTA improved market access for Canada’s manufactured goods by eliminating all tariffs on such exports to Ukraine. When the 2017 agreement entered into force, Ukraine eliminated tariffs on 75.2% of tariff lines for manufactured goods, with the remaining 24.8% becoming duty-free by January 1, 2024.
In 2022, exports of Canadian manufactured goods to Ukraine were composed, but not limited, of metal and non-metallic mineral products ($2.2 million); basic and industrial chemical, plastic and rubber products ($3.3 million); Industrial machinery, equipment and parts ($12.6 million); electronic and electrical equipment and parts ($8.9 million); motor vehicles and parts ($5.2 million); and, aircraft and other transportation equipment and parts ($57.5 million).
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