On 14 March 2017, Ukrainian President Porosheno announced that the Ukrainian Parliament (the Verkhovna Rada) ratified the Canada-Ukraine Free Trade Agreement (Agreement), which had been signed on 11 July 2016. Canada’s Parliament had approved the agreement earlier. Entry into force of the Agreement will lead to the increase of foreign direct investment in Ukraine, creation of new jobs in construction, industry and trade, as well as duty-free access to 98% of Canadian market. This refers both to agricultural and industrial goods. However, according to the Canada-Ukraine Trade and Investment Support Project, there are exceptions:
- For agricultural products. The Agreement provides zero tariff rates for all agricultural products except 108 tariff positions allowed for duty-free export within Canada’s global tariff rate quotas. They include, inter alia, poultry (frozen poultry, poultry fat), dairy products (milk, cream, yogurt, butter), eggs and egg products, cheeses and sugar.
- For manufactured products. The only exception is cars – 7 years transitional period is set for them within which the duties will be reduced to 0%.
Canada’s situation is more complex. Immediately after the Agreement comes into force, the duties will be eliminated only for 72% of Canadian goods. The duties for the remaining 27% will be gradually reduced in compliance with transition periods – 3, 5, and 7 years. The Agreement also provides for partial liberalization on the agricultural products key for Ukraine as well as some tariff rate quotas and specific goods.
The Agreement also regulates non-tariff technical barriers to trade, rules of origin, trade facilitation, trade remedies and emergency action, sanitary and phytosanitary measure, fair competition, government procurement, IP, e-commerce and cooperation on trade issues.
The Ukrainian President emphasized that the ratification of the Agreement provides for the formation of a Ukraine-Canada-EU free-trade triangle, as the formation of the free trade area between Canada and the European Union is about to be completed.