Minister Van Loan Discusses Talks Toward a Canada Ukraine Free Trade Agreement

The New Pathway’s John Pidkowich recently interviewed Canadian International Trade Minister, the Hon. Peter Van Loan, PC, MP for York – Simcoe about the current level of official free trade discussions between Canada and Ukraine being conducted in Kyiv.

Background

On September 22, 2009, the Government of Canada announced the launch of talks between Canada and Ukraine on a free trade agreement and on October 31, 2009, launched public consultations on possible negotiations through the Canada Gazette Notice.  Canadian and Ukrainian officials met in mid-November 2009 for initial discussions on the feasibility of a free trade agreement. The Government continues to move forward on this initiative.

Canada already has strong cultural ties with Ukraine, and our commercial relationship has grown stronger over the last decade, including Canadian companies steadily building a business presence in Ukraine in areas like aerospace, communications technologies and in agriculture.

JP: Minister Van Loan, can you state who and from which government department is speaking on the behalf of Canada and on Ukraine’s behalf during free trade negotiations? 

PVL: I, as Canada's Minister of International Trade, and Ukraine’s Minister of Economy, Vasyl Tsushko, speak on this initiative on behalf of Canada and Ukraine, respectively. Free trade talks begin and are normally carried out by officials from the government … [and from Canada] I believe Carmen Sylvain is leading them.

JP: Within free trade talks, which industry sectors or spheres of economic activity are being talked about?

PVL: At the start of the process, it’s just about everything, both services and merchandise trade. We begin to figure out where we have the greatest prospects for success. Normally, what happens is that each side identifies sectors that they’re interested in and those that are defensive issues, sectors that they might wish to protect. Then, negotiations proceed [and] at this point it’s still wide open.

A free trade agreement with Ukraine could further open markets for Canadian exports including agricultural, fish and seafood, and pharmaceutical products, machinery, meat (frozen pork), electrical and electronic equipment, and iron and steel products.

In keeping with Canada’s approach to free trade agreements, Canada would also seek parallel agreements on the environment and labour cooperation.   

JP: Do you know what the value of trade is between Canada and Ukraine?

PVL: It’s usually somewhere in the range of $225 million annually. It’s fairly balanced. Last year, everybody experienced an economic downturn. In 2009, Canada’s bilateral merchandise trade with Ukraine totalled $206.4 million: Canadian merchandise exports to Ukraine were $112.1 million; and Canadian merchandise imports from Ukraine were $94.3 million.

By province, Quebec had the largest merchandise trade relationship with Ukraine. In 2009, Quebec’s trade with Ukraine accounted for 45.1% of Canada’s overall merchandise trade with that country.

JP: Can you state the value of Canadian direct foreign investment in Ukraine? 

PVL: The stock of Canadian direct investment in Ukraine was valued at $1 million at the end of 2009. There is no breakdown available by province for Canadian direct investment (CDIA).

JP: Are there any special business conditions [or incentives] that Canada has to offer for Ukraine?

PVL: I think that the greatest benefit for an agreement like this would be that we have such a significant expatriate Ukrainian population in Canada. As a result, we’re very well positioned for two-way trade benefits. Particularly, younger generations of Ukrainians are quite comfortable in going back and forth doing business and taking advantage of the people-to-people ties that they have. This is one of the greatest advantages for Canada actually with trade all around the world but, particularly with Ukraine. We have a very strong Ukrainian community, much of it very entrepreneurial for whom an agreement like this would present a real opportunity.

JP: Is the liberalization of Canadian visa requirements for Ukrainians an area of negotiation?

PVL: Generally speaking, visas and the requirements for visas are the purview of the Minister of Citizenship and Immigration. For example, as with the European Union, trade discussions also include labour mobility, particularly allowing temporary mobility, expedited on a (visa) basis in terms of being able to work. This is a little bit different than having to get a work visa for investors, for management trainees, for skilled people important for a particular business. So, a trade agreement could set up a work/labour mobility arrangement but obviously they are speculative at this stage [of negotiations]. However, this has been done in the past and is currently the subject of negotiations that we have with other free trade agreements.

JP: What role does a business forum, such as the Canada-Ukraine Agriculture, Energy & Finance Forum held earlier in June in Edmonton, play in deepening Canada Ukraine commercial relationships?

PVL: The key is, of course, who are the people involved, and what are their inclinations and interests. Such forums can be tremendously helpful, especially for smaller entrepreneurs or business people looking to make a move to invest or set up operations to trade overseas. For bigger businesses, the expense of start-up is easily managed within the broader context of overall budget. For a smaller business, often there is a bigger challenge [associated] with transaction costs. So, forums are very good for the sharing of knowledge, making contacts, and also for the trade commissioner service that Canada has to offer, that identifies people who could benefit from their services and give them that “leg up” to help out and begin to do business overseas.

JP: Has the new Government of Ukraine confirmed its interest in continuing free trade talks with Canada?

PVL: We were hoping to begin these free trade talks sooner and with the change in administration there was a bit of a delay but now basically on track and going ahead.

We are pleased with Ukraine’s progress to date, since independence was regained. We are hopeful that greater people-to-people and business ties with the West – Canada in particular – can consolidate the gains that have been made and further enhance economic and other freedoms in Ukraine.

PHOTO

Canadian International Trade Minister, the Hon. Peter Van Loan