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Ukraine's economy ministry publishes text of Ukraine-Canada Free Trade Agreement

Ukraine's economy ministry publishes text of Ukraine-Canada Free Trade AgreementUkraine's Economic Development and Trade Ministry has published the Ukraine-Canada Free Trade Agreement in Ukrainian language on its website.

The ministry said that the agreement will take effect after its ratification by the parliaments of the two countries and exchange of ratification instruments.

As reported, Ukraine and Canada signed an agreement on the completion of negotiations on the free trade area between the countries in July 2015. Then the document was translated into three official languages. The agreement was signed on July 11, 2016 in Kyiv.

The agreement on a free trade area between Ukraine and Canada since the moment of taking force after its ratification by parliaments of the two countries would reduce imports duties for 98% of Ukrainian imported goods and for 72% of Canadian exports to nil, the ministry said.

"Imports duties on agricultural goods will be lifted at once (apart from 108 tariff lines and the access to them will be opened with quota) and all industrial goods (apart from passengers cars with a seven year transition period for revoking of imports duties)," the ministry said.

The ministry noted that for 22 groups of agricultural goods (108 tariff lines, including wheat, barley, dairy products, poultry and turkey, eggs and egg products, beef, pork and margarine) Ukrainian exporters will be able to supply them at a zero imports duty only as part of Canada's global quotas.

"The exceptions… are severe. Three wide groups of goods were fully removed from free trade: poultry, eggs and dairy products. Canada does not give us any preferences for them. All possible goods made of milk (cheese, ice cream, for example) are excluded, while the EU opened this market for us," business envoy at the State Fiscal Service of Ukraine Taras Kachka said.

He said that these groups are sensitive for Canada, as trade with these goods is strictly regulated at the national level. These goods are also removed from the free trade area agreement between Canada and the EU, apart from the additional cheese quota.

The ministry said that the free trade area agreement between Ukraine and Canada foresees gradual elimination of imports duties on Canadian agricultural products: within three years for live poultry and sheep, beef, lamb, nuts, sauces, flour products; within five years – sub-products from pigs, oilseeds, fat, vegetable oil and within seven years – cooled pork and poultry, milk, cream, eggs honey, vegetable and sausages.

Read also: Ukraine, Canada free trade agreement to reduce duties for 98% of Ukrainian goods

The partial liberalization in the form of cutting imports duties will apply to Canadian fat, cheese, margarine and mixtures. For example, imports duties for some goods made of poultry would be decreased only by 20% within seven years.

The tariff quotas for frozen pork and salo, and sugar (eight positions) will be removed from the free trade regime.

As for industrial goods, Canada introduces a seven-year transition period for revoking duties only for some positions of passenger cars, while Ukraine: a three-year period for construction materials, industrial equipment and parts of aircraft, a five-year period for electric equipment, light pipes, motorcycles, trailers, vessels, photo cameras and a seven-year period for cars, tractors and spare parts for them.

"Among key Ukrainian products that would receive advantages from the duty-free access to the Canadian market in the short-term outlook are sunflower oil, sugar, confectionary and chocolate, alcohol and beer, juices, clothes, ceramics, metal products and chemicals. The agreement would promote cooperation in the aircraft building sector," the ministry said, predicting a 3.5% rise in exports, thanks to the removal of the duty.

The ministry also pointed out the beneficial access to the participation in public procurement at the governmental level of the two countries, liabilities linked to protection of intellectual property rights and receiving technical assistance from Ottawa for the effective implementation of the free trade area agreement.
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