Canada Concludes FTA Negotiations with Ukraine Aug. 5, 2015
On July 14 Canada concluded free trade negotiations with Ukraine. On July 22, Ukraine announced the re-opening of its market for Canadian beef, from cattle under thirty months, and ready-to-eat meat. Currently, Canada's exports of agriculture, fish and forestry products to Ukraine total $32 million, with fish and seafood, pork, furskins and pet food among the top exported items.
The Canadian government recently announced (on July 14, 2015) the conclusion of the Canada-Ukraine Free Trade Agreement (CUFTA). The official press release indicates that in addition to generating significant commercial benefits for Canadian businesses, the CUFTA would also support the economic reform and development efforts of the Government of Ukraine, strengthen the Canada-Ukraine partnership for peace and prosperity, and help pave the way for long-term security, stability, and broad-based economic development in Ukraine.
Canadian merchandise imports from Ukraine totaled $90 million in 2014, and averaged $137 million for the 2011-2013 period. Exports of goods to Ukraine amounted to $131 million in 2014, while they averaged $168 million during 2011-2013. As highlighted by the designation of Ukraine as a priority country under Canada's Global Markets Action Plan, Ukraine is a promising emerging market for Canadian exporters, with opportunities in agriculture and processed food (including fish and seafood products), as well as industrial goods, such as cosmetics, industrial machinery, iron and steel, and plastics.
Impact on Agriculture
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 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 (three-year phase out), canola oil, processed foods, animal feed, frozen fish, and caviar. Tariffs will also be eliminated on fresh and chilled pork (seven-year phase out), and frozen pork will benefit from an increased duty-free tariff rate quota, reaching 20,000 metric tons at the end of the implementation period. Tariffs on wood products will also be phased out over a five-year period.
When the Agreement is implemented, Canada will immediately eliminate tariffs on 99.9 percent of current imports from Ukraine. This includes elimination by Canada of tariffs on all 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 and vodka. 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 will be unaffected by the CUFTA.
Canadian exports of agricultural, fish and forestry products to Ukraine totaled $32.2 million in 2014, with fish and seafood, pork, furskins and pet food among the top exported items. Imports into Canada of agricultural, fish and forestry products from Ukraine amounted to $9.6 million in 2014, with top items including soybeans, wood products, honey, and cocoa preparations.
Market Access for Canadian Beef
Agriculture Minister Ritz announced on July 22, 2015 that Ukraine has reopened its market for Canadian beef (from cattle under thirty months) and for ready-to-eat meat. This new market access follows the lifting of Ukraine's ban on Canadian beef products in 2014. Canadian beef and ready-to-eat meat establishments eligible for export to the European Union are immediately granted access to the Ukrainian market. The federal government indicated it is working closely with Ukraine to expand the number of establishments that are eligible to export, pending inspections from Ukrainian authorities.
On July 27, 2015, the Canadian Food Inspection Agency (CFIA) announced that the certification requirements for export of beef and ready-to-eat (RTE) meat products have been agreed to with the Ukrainian authorities.
According to the Canadian press release, Ukraine's global imports of beef products in 2014 were C$17.1 million. Ukraine sourced its imports of beef primarily from Australia and Brazil (70 percent combined market share for these two countries)