On June 15, Canada’s Minister of International Trade Peter Van Loan met with Ukrainian ambassador Dr. Ihor Ostash to review progress towards free trade between Canada and Ukraine.
The first round of free trade talks took place in Kyiv this past May 17 to 21.
More recently, the Canada-Ukraine Business Forum ran from June 10 to 14.
With a population of 46 million, Ukraine is one of Europe’s largest countries. Canada has a population of about 33.8 million according to the latest estimates from the Central Intelligence Agency World Factbook.
Minister Van Loan and Ambassador Ostash discussed agricultural and energy products as key ingredients to a successful free trade relationship.
Canadian and Ukrainian Exports and Imports in 2009
Something needs to be done to stimulate international trade between the 2 countries.
In 2009, Canada shipped US$98.2 million worth of exports to Ukraine. That represents a 54.4% decline from the $215.4 million in shipments one year earlier.
Imports from Ukraine to Canada were valued at $82.6 million for 2009, down 55.4%.
While the overall transaction value of both exports and imports tanked, Canada was able to post a $15.6 million trade surplus in 2009.
Top 10 Exports from Canada to Ukraine
Drugs and medications were the top Canadian export to Ukraine in 2009, amounting to US$14.7 million (16.2% of total Canadian exports).
Frozen hake fish ($14.7 million), frozen boneless pork ($11.4 million), boring or sinking machinery parts ($7.5 million) and frozen shrimp and prawns ($6.5 million) comprise the leading 5 shipments from Canada to Ukraine.
Leading Canadian shipments also included sardines ($2.7 million), tree seedlings ($2.6 million), corn ($1.8 million), electric converters ($1.7 million) and diesel generating sets ($1.3 million).
Canadian corn was the fastest-growing exports to Ukraine last year.
Top 10 Imports from Ukraine to Canada
With sales of US$9.9 million, the chemical fertilizer urea was Canada’s leading import from Ukraine.
Other top 5 Ukrainian imports were crude oil ($7.5 million), rail vehicle parts ($5.9 million), anthracite hard coal ($5.3 million) and rubber tires ($3.3 million).
Drilling casings ($3.2 million), molasses ($2.8 million), titanium dioxide pigments ($2.7 million), flat hot-rolled steel ($2.6 million) and light petroleum ($2.5 million) round out the top 10 Ukrainian imports.
Among these, the fastest growing imports from Ukraine to Canada were casings and tubing used to drill for oil and gas. That product category realized a 7,000% gain over 2008 sales.
Tariff Duties on Top 10 Ukrainian Imports
From a financial standpoint, it is hard to see how free trade will motivate Canadian importers to buy more Ukrainian products.
That’s because all of the top 10 imports from the Ukraine are already duty free, even before a free trade agreement is signed. Those top 10 products represented 55.3% of all Ukrainian imports into Canada during 2009.
For the first 3 months of 2010, Canadian imports from Ukraine fell by a further 36.2%. In contrast, Canada’s exports to Ukraine spiked to $56.4 million – up by 172.2% over the first quarter of 2009.
Next Canada-Ukraine Free Trade Meeting
Canadian Minister of Financial Trade Peter Van Loan and Ukrainian Ambassador Ostash are on the right track when they focus on eliminating non-tariff trade barriers between the 2 countries.
The next round of negotiations for Canada free trade with Ukraine is expected to happen in the autumn.
It is clear that the scope of any such free trade agreement needs to extend far beyond the trade of pharmaceutical, seafood, energy and industrial products.
The focus now includes new trade products, mutual investment, job creation and economic co-operation through Canada-Ukraine free trade.
Sources: This analysis presents independent calculations and insights based on Statistics Canada data available from Industry Canada’s Trade Data Online (TDO) and Foreign Affairs and International Trade Canada’s press release “Canada-Ukraine Free Trade Negotiations Underway (June 15, 2010).
Daniel Workman - A senior business and finance writer who also does French translations, notably international trade and insurance materials.
Comments