Canada-Ukraine Free Trade Agreement Opportunities
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The document summarizes Canada's free trade agreement with Ukraine (CUFTA). Some key points: - CUFTA entered into force in August 2017 after negotiations from 2010-2015 and ratification processes in both countries. - It eliminated tariffs on nearly 100% of Canadian imports to Ukraine and over 85% of Ukrainian imports to Canada, with remaining tariffs to be phased out over 7 years. - The agreement aims to increase bilateral trade, which has grown steadily since 2014, and provides benefits for sectors important to Western Canada like pork and pulses. - In addition to tariff reductions, CUFTA includes provisions on technical barriers, intellectual property, procurement, and other areas to facilitate trade between
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Canada-Ukraine Free Trade Agreement Opportunities
- 1. Canada-Ukraine Free Trade Agreement Global Affairs Canada
- 2. Canada’s Free Trade Agreements Canada Current FTAs CETA (provisionally) applied) CUFTA
- 3. General Context • Strong support for Ukraine across all political parties • Very strong people-people connections, large Ukrainian diaspora, Canada-Ukraine Parliamentary Program, Canada a top destination for Ukrainian students. • Promising market ( FIPA (1995), Double Taxation (1996), Air Transport (1999)
- 4. A Brief History of CUFTA 2010 – Launch of Negotiations July 14, 2015 – Completion of Negotiations (Six Rounds) July 11, 2016 – CUFTA is Signed April 3, 2017 – Ukraine Completes Domestic Ratification Process June 1, 2017 – Bill C-31 Receives Royal Assent in Canada August 1, 2017 – CUFTA Enters into Force
- 5. What’s in CUFTA Upon Entry into Force, Canada eliminated tariffs on 99.9% of imports from Ukraine. Ukraine eliminated tariffs in approximately 86% of imports from Canada. • Remainder to be phased out over 7 years. • Includes duty-free access for manufactured goods, fish and seafood, and most agricultural products.
- 6. Tariff Finder www.Tariffinder.ca Selected HS Code:0401.10.10.00 -Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included -Milk and cream, not concentrated nor sweetened -Milk, not concentrated and unsweetened, not exceeding 1% fat - - In immediate packings of a net content not exceeding two litres
- 7. What else is in CUFTA? 19 Chapters, including: • Technical Barriers and Sanitary and Phytosanitary Measures • Intellectual Property • Government Procurement • Trade Facilitation and Trade Cooperation • Dispute settlement
- 8. Non-Tariff Benefits For Canadian Companies Government Procurement – Canadian companies will have access to Ukrainian government contracts on the same basis as Ukrainian suppliers Mutual recognition of standards – Provisions to facilitate eliminatation of barriers caused by different standards E-Commerce – CUFTA provides for no duties on products or services delivered electronically from Canada to Ukraine
- 9. Progressive Trade “Canada is committed to ensuring that the benefits of international trade and investment are broadly shared and create growth, opportunities and good middle-class jobs for people everywhere.” CUFTA also covers: • Environment • Labour • Transparency
- 10. CUFTA Does Not Cover • Investment o Canada and Ukraine have had a FIPA in place since 1995 • Services o WTO General Agreement on Trade in Services is in effect o Financial Services, Telecommunications, Temporary Entry are not covered
- 11. Canada – Ukraine Bilateral Trade 2014 Exports to Ukraine 144.766 Imports from Ukraine 99.163 Trade Balance 45.603 2015 Exports to Ukraine 210.491 Imports from Ukraine 67.547 Trade balance 142.944 2016 Exports to Ukraine 265.205 Imports from Ukraine 107.438 Trade Balance 157.768 Jan - Jun Comparisons Jan - Jun 2017 Exports to Ukraine 135.678 Imports from Ukraine 62.840 Trade Balance 72.838 Jan - Jun 2016 Exports to Ukraine 79.033 Imports from Ukraine 47.252 Trade Balance 31.781
- 12. Canadian Exports to Ukraine Canada’s top exports to Ukraine (2016): • Mineral fuels and oil ($146.8 million) • Fish and seafood ($38.3 million) • Aircraft ($22.7 million), • Machinery and parts ($13.5 million)
- 14. Key Benefits for Western Canada - Canadian pork exporters will benefit from duty-free access on fresh and chilled pork, and from a large annual duty-free tariff rate quota for frozen pork and certain pork offal and fat, which will increase from 10,000 tonnes to 20,000 tonnes over seven years following entry into force of the Agreement; - Reservoir tanks and similar containers (tariffs of up to 7% will be eliminated immediately upon entry into force of the Agreement); - Pet food (tariffs of up to 5% to be phased out over seven years following entry into force of the Agreement); - Meteorological, geophysical and other surveying instruments (tariffs of 5% to be phased out over five years following entry into force of the Agreement); - Caviar and caviar substitutes (tariffs of up to 15% to be eliminated immediately upon entry into force of the Agreement); - Wine and icewine (tariffs of 0.3 €/litre will be eliminated immediately upon entry into force of the Agreement); - Pulses (tariffs of up to 10% to be phased out over three years following entry into force of the Agreement).
- 15. The TCS: Who are we? • More than 2,000 Trade Commissioners located in offices across Canada and in more than 160 cities worldwide delivering international business development services. • Our regional network across Canada o Over 100 employees at Regional Offices o Over 900 employees at HQ • Our international network o Over 1,000 employees abroad 400 Canada-based 600 locally-engaged We are Canada’s network of international trade professionals with national and international presence; hands-on knowledge of international markets and a broad network of international business contacts
- 16. TCS EcosystemInvestment and Innovation Trade Sectors TCS Operations Trade Analysis Trade Portfolio Strategy and Coordination Regional Trade Operations and Intergovernmental Relations International Business Development, Investment and Innovation Branch (Ottawa) Calgary Toronto Vancouver Montreal Halifax Trade Portfolio Partners Canadian Commercial Corporation (CCC) Export Development Canada (EDC) Regional Network Offices Abroad
- 17. TCS Value Proposition Provide clients with practical advice on foreign markets and on-the-ground intelligence to help them make better, more timely and cost-effective decisions in order to achieve their goals abroad. The TCS meets client needs and delivers quality and consistent service.
- 18. What are the TCS Services? • Preparing for International Markets • Assessing Market Potential • Finding Qualified Contacts • Resolving Business Problems Export – establish company abroad – tackle a market access issue – pursue a joint-venture or strategic alliance – participate in global value chain – seek technology and R&D partnerships We assist Canadian companies in succeeding globally and lowering the cost of doing business through four key services:
- 19. TCS Business Lines: • Trade Promotion (International Business Development – IBD) • Foreign Direct Investment (FDI) Attraction • Science, Technology and Innovation (STI) The TCS honours its professional commitments. • Trade Policy
- 20. TCS Clients are Canadian organizations which have... Demonstrated capacity for and commitment to internationalization Meaningful economic ties to Canada Potential to contribute significantly to Canada's growth
- 21. Who are our Clients? Members of the Canadian business community who contribute to Canada’s economic growth: • Small, medium and large companies (predominantly SMEs) • Foreign subsidiaries of companies registered or incorporated in Canada • Representatives of qualified clients, such as consultants, distributors, agents and students (must provide evidence in writing)
- 22. • Program launched on January 5th 2016 • Provides $50 million over five years to help Canadian small and medium-sized enterprises (SMEs) take advantage of global export opportunities Eligibility • For-profit company registered in Canada with revenues declared and verified via Canada Revenue Agency, of at least $200K and no more than $50 million • 1-250 full-time equivalent (FTE) employees • Incorporated legal entity or a limited liability partnership (LLP)
- 23. Eligible Activities and Expenses Must promote export development and go beyond an applicant’s core activities, as well as represent new or expanded initiatives and be part of a strategic export business case for the target market. Ex: • Business travel to target markets to meet with clients or partners • Participation at trade fairs and trade missions • Adaptation of marketing tools for a new market • Business consultant for a custom market research • Legal fees for certification, IP protection, contract review
- 24. Receivable Insurance Political Risk Insurance Bonding Solutions Financing Guarantees Direct Financing Insurance Financing EDC Product: Business Type: Canadian Exporters Canadian Foreign Affiliates CDIA CDIA FDI into Canada¹ ¹ Once foreign entity has set up Canadian subsidiary, they are eligible for all EDC products. Foreign Buyers For more information, visit: http://www.edc.ca/EN/Our-Solutions/Pages/default.aspx EDC at a Glance European Operations EDC & CUFTA EDC’S PRODUCT OFFERING
- 25. 25 Aerospace Consumer goods and services Defence and Security Energy and Power Education & Health Infrastructure Transportation Engineering Services & Construction
- 26. 26 Minister of International Trade Buyer Negotiates and Signs G-to-G contracts to promote Canadian export trade • Contract risk mitigation • Structuring & managing contracts to enhance Canadian competitiveness International Projects •Bonding •Insurance •Financing Promotion of Canada’s Trade & Economic Interests • Preparing for international Markets • Market potential Assessment • Qualified Contacts • Problem Solving
- 27. Connect with the TCS tradecommissioner.gc.ca Global Affairs Canada Richard Tarasofsky Deputy Director Eastern Europe and Eurasia
Editor's Notes
- Today, the Trade Commissioner Service is Canada’s most comprehensive network of international trade professionals with over 2,000 Trade Commissioners in Canada and abroad; Over 1,000 in Canada, and Over 1,000 abroad Of interest to you, as you may wish to establish linkages here in Canada in growing your business, the Trade Commissioner Service’s domestic arm is the Regional Network. We have Trade Commissioners in five Regional Office Hubs: Atlantic, Ontario, Quebec, Prairies & Northwest Territories and Pacific. We also have an expanded network of Client Service Satellites (co-located Trade Commissioners), enabling us to serve clients in every provinces and territory of Canada. The core business of the regional offices is to “engage high-potential clients in proactive sectors and provide customized and sustained service.” They are often a first point of contact for Canadian business. As with other partners in the TCS network, they engage with clients on a daily basis to identify International Business Development (IBD) interests and support Canadian business in achieving their international goals.
- We’ll get into the details later on how we are structured, but here is a quick snapshot of some of our key components. At the core of the TCS is the International Business Development, Investment and Innovation Branch. Led by Assistant Deputy Minister and Chief Trade Commissioner, Ailish Campbell, this is where our HQ-based trade commissioners support the work of our colleagues across Canada and around the world. We have trade commissioners in our geographic desks and trade colleagues in the trade policy and legal branches, as well, but for the sake of simplicity this slide shows where the TCS is primarily supported. The TCS is Canada’s most comprehensive network of international trade professionals with over 2,000 Trade Commissioners; Over 1,000 in Canada, and Over 1,000 abroad The TCS’ domestic arm is the Regional Network. We have Trade Commissioners in five Regional Office Hubs: Pacific and Yukon, Prairies & Northwest Territories, Ontario, Quebec, and Atlantic. We also have an expanded network of Client Service Satellites (co-located Trade Commissioners), enabling us to serve clients in every provinces and territory of Canada. The regional network is often a first point of contact for Canadian business. The regional network is also involved in supporting high-impact and aligned domestic outreach by the minister, select heads of mission, and Global Affairs Canada senior-level executives. As with our trade commissioners abroad, our colleagues across Canada naturally engage with clients on a daily basis to identify International Business Development (IBD) interests and support Canadian business in achieving their international goals.
- The TCS’ value proposition is to provide its clients with practical advice on foreign markets and on-the-ground intelligence to help them make better, more timely and cost-effective decisions in order to achieve their goals abroad. TCS policies and guidelines are focused on TCS clients - Canadian companies that have studied and chosen their target markets. Trade commissioners also engage with other key contacts and in a number of additional value-added proactive functions. It is one of the TCS’s objectives to ensure that all trade commissioners find the time to be proactive in their markets to network locally and gather the market intelligence needed to provide high-quality key services.
- Preparing for International Markets (offered by our Regional Network) determine whether they are internationally competitive; decide on a target market; collect market and industry information; and enhance their international business strategies to export, invest and innovate. 2) Assessing Market Potential provide market intelligence, and advice on improving their market penetration strategy. 3) Finding Qualified Contacts Key and qualified contacts are individuals who are known to the Trade Commissioner in the ROs or at post. Affiliations and identification of key decision makers (executives, board of directors), along with their marketing strategy, policies, priorities and plans. Qualified contacts in a targeted market have the local knowledge to help the Canadian clients refine and implement their market entry strategy or investment strategy. 4) Resolving Business Problems The Problem Solving service provides Trade Commissioner Service (TCS) clients with advice and assistance in understanding and resolving business, investment or other market-access problems such as: confusing or unfair business practices; customs classification or clearance issues; contract bid preparation and procedures; shipping difficulties; storage and warehousing options; and issues related to the expropriation and sale of assets So what are some of the international issues and complexities that TCs navigate? Exporting – establishing companies abroad – tackling market access issues – joint-ventures or strategic alliances – participating in global value chains – seeking technology and R&D partnerships.
- The TCS promotes Canada's economic interests in global markets, by engaging in a range of activities, including: contributing to export market development; conducting advocacy and foreign market access activities; understanding and analyzing trade policy; attracting foreign investment to Canada; developing a network of international business contacts; identifying and communicating; fostering strategic alliances; linking Canadian businesses to global value chains; supporting licensing and venture capital linkages; promoting joint-venture partnering and foreign equity investment; Facilitating R&D collaboration and technology transfer; promoting corporate social responsibility; and facilitating Canadian direct investment abroad.
- We have clear guidelines in place regarding client definition. Clients are Canadian organizations which have: Demonstrated capacity for and commitment to internationalization; Meaningful economic ties to Canada; and The potential to contribute significantly to Canada’s growth. We also take client feedback seriously. In particular, we are able to gauge client satisfaction through a TCS Client Survey that all clients receive. The feedback has been overwhelmingly positive. For 2015-16, nearly 85% of TCS clients reported being satisfied or very satisfied with the service they received from the TCS. Clients ranked the highest: •Excellence and quality: •“The TCS were professional and a pleasure to work with.” •“TCS officers they dealt with were interested and willing to serve.” •Knowledgeable staff: • “Knowledge was the most helpful aspect of the service” •Value added information and contacts: •“The TCS was most instrumental in providing value added information, contacts and advice.” •“Eliminate dead ends that would have otherwise cost them time and money.” Overall, analysis has also shown that firms that work with the TCS export 20% more and to 20% more markets than those that don’t.
- Now let’s take a look at our clients – The Canadian business community who contribute to Canada’s economic growth Clients can be small, medium or large companies 75% of our clients are small and medium-sized companies Most Canadian companies are SMEs Clients can be foreign subsidiaries of companies registered or incorporated in Canada Ex. Ericsson Canada
- On January 5, 2016, Minister Freeland announced the launch of CanExport, a new Program to help increase the competitiveness of Canadian SMEs while creating jobs and growth at home. Trade accounts for approximately 65 percent of Canada’s gross domestic product, with one in five jobs linked directly to exports. Small and medium-sized businesses employ 10 million Canadians, nearly 90 percent of the total private sector workforce. Over 99 percent of all Canadian businesses are small or medium-sized.
- On January 5, 2016, Minister Freeland announced the launch of CanExport, a new Program to help increase the competitiveness of Canadian SMEs while creating jobs and growth at home. Trade accounts for approximately 65 percent of Canada’s gross domestic product, with one in five jobs linked directly to exports. Small and medium-sized businesses employ 10 million Canadians, nearly 90 percent of the total private sector workforce. Over 99 percent of all Canadian businesses are small or medium-sized.
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