Canada updating trade deal with Ukraine

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by Emily Atkins

An updated Canada-Ukraine Free Trade Agreement has been introduced in the House of Commons.

The modernized Canada-Ukraine Free Trade Agreement (CUFTA) marks a new era in Canada and Ukraine’s economic relationship and will be fundamental to the participation of Canadian businesses in Ukraine’s economic reconstruction and recovery from Russia’s illegal invasion.

Bill C-57, which, if adopted by Parliament, will implement the modernized Agreement in Canadian law.

“Canada’s modernized free trade agreement with Ukraine will create new jobs for workers and new opportunities for businesses in both of our countries—while also supporting Ukraine’s economic recovery, national security, and stability. Canada will continue to do everything we can to support Ukraine through to victory and into the reconstruction of a free and prosperous Ukraine,” said Chrystia Freeland, deputy prime minister and minister of finance.

Canada was the first Western country to recognize Ukrainian independence, on December 2, 1991. The original CUFTA entered into force on August 1, 2017, immediately eliminating tariffs on 86 percent of Canada’s merchandise exports to Ukraine.

In January 2022, Minister Ng and Ukraine’s first deputy prime minister and minister of economy Yulia Svyrydenko launched modernization negotiations. Negotiations were paused when Russia invaded Ukraine in February 2022, but resumed in June 2022.

In April 2023, prime minister Justin Trudeau and Ukraine’s prime minister Denys Shmyhal announced the conclusion of negotiations. On September 22, 2023, Trudeau and Ukraine’s president Volodymyr Zelenskyy signed the modernized CUFTA in Ottawa.

The modernized CUFTA includes dedicated new chapters and provisions on trade in services (including financial), investment, temporary entry for business persons, telecommunications, digital trade, labour and the environment, among other areas. New chapters on inclusive trade have also been added to ensure that the benefits of CUFTA are more widely shared, including in the areas of:

  • small and medium-sized enterprises;
  • trade and gender, and
  • the first-ever trade and Indigenous Peoples chapter that Canada or Ukraine has ever included in a concluded free trade agreement.

When in force, the modernized CUFTA will not only continue to provide preferential market access for merchandise trade, it will also establish ambitious new market-access terms for services trade and investment.

Trade minister Mary Ng also announced that she will bring a business mission to Ukraine in 2024. This mission will build on the foundations of the modernized CUFTA to create connections between our businesses and set Canadian businesses up to support the rebuild of Ukraine.

In 2021, the value of total bilateral trade between Canada and Ukraine reached its highest point ever at $447 million ($220 million in exports and $227 million in imports). This dropped to $422 million in 2022 ($150 million in exports and $272 million in imports) largely due to the effects of Russia’s illegal invasion and aggression.

Since Russia’s full-scale invasion of Ukraine in February 2022, Canada has provided over $9.7 billion in multifaceted support.