Canada–Ukraine trade deal vastly expands opportunities for exporters

The Canada–Ukraine Free Trade Agreement (CUFTA) that came into effect on August 1, 2017, promised to improve market access for Canadian and Ukrainian businesses to help them grow, and create opportunities for Canadians and Ukrainians alike.

This agreement has gone even further, by eliminating tariffs and providing non‑tariff measures such as trade facilitation, access to public procurement opportunities, protection and enforcement of intellectual property rights, environmental standards, and digital trade.

Last year, Prime Minister Justin Trudeau and Ukraine President Volodymyr Zelensky agreed to seek to further expand CUFTA to increase its economic benefits for people in both countries.

Consultations

As a first step, Canada held public consultations to seek the views of Canadian businesses on possible CUFTA expansion in February and March this year. Read the report on what we heard, and if you also wish to provide your feedback on how to modernize CUFTA, we invite you to visit the CUFTA public consultation website.

Tariff elimination

Upon CUFTA’s entry into force, 86% of Ukraine’s imports from Canada became duty free, with the remaining tariff advantages to be implemented by January 1, 2024. Meanwhile, Canada immediately eliminated tariffs on 99.9% of imports from Ukraine, and the Canada Tariff Finder was developed to help Canadian businesses, importers, and exporters find tariff information more easily for products using Harmonised System (HS) codes.

Preliminary results

After three years of free trade between Canada and Ukraine, results for businesses in targeted sectors have been impressive.

Canada’s exports to Ukraine with the largest increases include fish and seafood, machinery and mechanical appliances, motor vehicles and parts, meat, and electronics. For example, in June 2020, Ukraine was the fourth‑largest destination by volume for Canadian fish and seafood exports. Furthermore, Canada’s non‑energy merchandise exports^Footnote1 to Ukraine grew by nearly 29%, from nearly $120 million in 2016 to over $150 million in 2019.

Canada’s imports from Ukraine that have expanded the most include iron and steel, electronics, and preparations of vegetables.

Opportunities for Canada

A recent study of Canada–Ukraine trade patterns and tendencies found strong potential in Ukraine for Canadian businesses who produce vehicles, engines, turbines, airplanes and turbo‑jets, petroleum gases, ethylene polymers, rubber, wood pulp, and meat.

Canada offers more competitive prices for specific commodity groups that Ukraine currently imports from other countries. These products include air conditioners, unwrought silver, cobalt, uncoated paper and paperboard, narrow woven fabrics, machinery and parts, fork‑lifts and other work trucks.

How to expand your business in Ukraine

There are plenty of opportunities in Ukraine, as well as through Ukraine to the rest of Europe. The Trade Commissioner Service (TCS) helps Canadian businesses of all sizes ready to venture into new markets, and offers financing and support for Canadian exporters in markets like Ukraine so that they can take advantage of these opportunities to grow and scale their businesses, which leads to good jobs for Canadians.

The CanExport SMEs Program provides up to $75,000 to help Canadian small and medium‑sized businesses export their products and services to new international markets. It covers as much as 75% of costs for a variety of marketing activities such as business travel, participation in trade events, market research, intellectual property protection, as well as expert advice on business, legal and tax matters.

The TCS in Ukraine is there to help.

Reach out to the TCS in Ukraine or contact your local TCS office in Canada today!