Canada recently announced the conclusion of the Canada-Ukraine Free Trade Agreement (CUFTA).The free trade agreement announcement represents an important milestone in the Canada–Ukraine bilateral relationship.
Here are some key highlights of the CUFTA:
- Upon entry into force of the Agreement, Ukraine will immediately eliminate tariffs on 86 percent of Canada’s current exports, with the balance to be phased out or subject to tariff reductions over periods of up to seven years. This includes elimination by Ukraine of tariffs on all Canadian exports of industrial products, fish and seafood, and the elimination of a vast majority of Ukraine’s agricultural tariffs. Key products benefiting from either immediate or eventual duty-free access include beef, canola oil, processed foods, animal feed, frozen fish, caviar, certain iron and steel products, articles of plastics, and cosmetics. Tariffs will also be eliminated on fresh and chilled pork, and frozen pork will benefit from a large duty-free tariff rate quota.
- Upon entry into force of the Agreement, Canada will immediately eliminate tariffs on 99.9 percent 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.
- Canada excluded all over-quota tariffs for supply-managed products (dairy, poultry and eggs) from tariff elimination, and no import quotas for these products were increased. Accordingly, the supply management system and its three key pillars (production control, import controls and price controls) will be unaffected by the Agreement.
- The Agreement contains a range of disciplines and commitments pertaining to non-tariff measures that will help ensure that market access gains are not constrained by unjustified trade barriers.
- The Agreement contains commitments related to trade facilitation designed to reduce red tape at the border.
- The CUFTA will provide companies with preferential access to procurement opportunities at the central government-level in both countries. Canadian suppliers will have the right to fair, non-discriminatory and predictable treatment when bidding on procurement opportunities tendered by Ukrainian central government entities, including government departments and agencies as well as several public enterprises such as airports, the postal system and public transportation (rail and subway systems).
- The Agreement includes commitments related to the protection and enforcement of intellectual property rights, which will allow Canadian IP right-holders to do business in the Ukrainian market with increased confidence.
- The CUFTA sets out commitments pertaining to high standards of environmental and labour protection, which also ensure that both governments retain the policy flexibility to protect the environment and enforce high labour standards.
- To facilitate trade in the digital economy, the CUFTA chapter on electronic commerce obliges both Canada and Ukraine to not levy customs duties or other charges on digital products that are transmitted electronically.
- Finally, the Agreement includes a trade-related cooperation chapter, in which Canada and Ukraine agree to promote cooperation that will help ensure that CUFTA-related benefits are realized.