Ukraine, Canada sign free trade agreement

The governments of Ukraine and Canada signed a free trade agreement on July 11, the press service of the Presidential Administration of Ukraine reported. The agreement takes effect immediately and plans to reduce 99% of the trade barriers between the two countries over a seven-year period, according to the report. The deal will “provide access for Ukrainian producers to the public procurement system of Canada and vice versa,” President Petro Poroshenko said at the signing ceremony. “Besides that, the agreement will become another anti-corruption instrument of Ukraine.”  In his turn, Canadian Prime Minister Justin Trudeau, who attended the signing ceremony, said the agreement creates a more predictable trade regime between the two countries. “

In other news, Ukrainian Railway (RAILUA) signed a memorandum on cooperation with Canadian Bombardier aimed at joint production of locomotives in Ukraine. To make this possible, Ukrainian Railway needs to develop a five-year plan of locomotive park renewal to secure demand for 40-60 locomotives p.a., said Ukraine’s infrastructure minister, as cited by Interfax-Ukraine.

Alexander Paraschiy: The signing of the FTA with Canada is a significant event for Ukraine, but mostly on the political side. Economic ties between Ukraine and Canada are rather weak, as they stand now. In fact, Ukraine’s trade turnover with Canada is the smallest among all G7 countries. In 2015, Canada accounted for 0.2% of Ukraine’s export of goods and services and for 0.6% of imports. Therefore, the short-term effect from the FTA with Canada won’t be significant for the Ukrainian economy. But what can benefit Ukraine is cooperation with Canada in the machinery and hi-tech sectors, including a prospective deal for locomotives.