Ukrainian Prime Minister Arseniy Yatsenyuk and Stephen Harper signed a free-trade agreement between the two countries Tuesday. Meeting in Chelsea, Quebec, the two politicians solidified the deal which is largely seen as a political gesture of goodwill from Canada while Ukraine faces a war with Russia and a nation-wide recession.
The finalization of the free trade agreement comes months before a federal election campaign is set to begin in Canada. Over 1.2 million Canadians of Ukrainian descent live in the country, making for the largest diaspora in the world outside of Ukraine itself.
The agreement will drop nearly all tariffs on Ukrainian imports and 86 per cent of tariffs on Canadian goods. Five years in the making, both Ukrainian and Canadian politicians are excited about the support.
“This is increasing economic opportunity for Canadians and Ukrainians and the ability to create jobs in both our countries,” said Harper during the announcement.
“This is a step toward helping Ukrainians realize the future that they want,”he said. “Ukrainians do not want a future based on oppression and a Soviet past. Ukrainians want a Western future, a future of prosperity and democracy. In completing this trade agreement we are taking one small step in competing that transition.”
I’ve never noticed Canadian products here before. I would buy them to show my support if I knew.
Politically, the deal is meant to be a gesture to Russia and the rest of the world of Canada’s faith that Ukraine can clean up corruption and get back on its feet. But Ukrainians are not as optimistic about the agreement, which is yet to be implemented. Speaking to New Canadian Media in the streets of Kiev, Ukraine’s capital, many were unsure about concrete benefits of the agreement.
Small, but symbolic
“You could say it’s a small step forward but it’s a symbolic one. I doubt it will make a difference,” said Oleg Sokolov. He said he understood the political significance on top of the other help Canada already provides to Ukraine but does not know what, if any, benefits it will bring.
“It’s an interesting situation but I don’t know which of our products will interest Canada,” said Sokolov.
Canada will get duty-free access to meats, grains, canola oil, processed foods and animal feeds, according to the press release issued by the Canadian government. In turn, Ukraine will benefit from forestry and industrial goods, and fish products which have grown in price since the annexation of Crimea.
The negotiations for the agreement began in 2010.
“This deal has been in the works for longer than our government has been ruling,” said Egor, who works for a financial institution in Kiev and asked his last name not be published. “It has a political significance and I’m glad Canada is still helping Ukraine but I don’t know if it will affect day-to-day life. I guess we will have to wait and see.”
The Canadian PMO says trade between two countries averaged $347 million in 2011–13. It is expected to increase by 19 per cent as a result of the deal and Ukraine could see an additional $23.7 million in exports. Ukraine’s current annual GDP is $181.71 billion.
The potential increase in the amount of trade did not impress Sokolov, who said he is in the know about Ukrainian business.
“It would be a good number for a company but when it comes to a country, that’s a very small number [of trade],” he said. “When put in the context of Ukraine’s GDP, that number does not make a difference.”
Ukrainians also wonder whether they have products that interest Canada on a larger scale and where the projected 19 per cent grown will come from during time of war.
The agreement will drop nearly all tariffs on Ukrainian imports and 86 per cent of tariffs on Canadian goods.
“Canada’s a big country and have their own products and trades, I’m not sure what Ukraine has to offer,” said Lyudmila Mihailik. “I’ve never noticed Canadian products here before. I would buy them to show my support if I knew.”
The trade agreement is the latest of Canadian measures helping Ukraine. Earlier this year Canada provided a $200 million low-interest loan to Ukraine for a total of $400 million in financial help over the last two years. Its aim is to help stabilize the country, which is about $50 billion in debt. Canada also provided non-lethal military supplies to Ukraine and participated in the training of its new police force.