After a long journey fraught with a global pandemic and all-out invasion, Canada and Ukraine successfully revamped a free trade agreement that comes into play on July 1, expanding the relationship between Canadian and Ukrainian businesses.
The Canada Ukraine Free Trade Agreement (CUFTA) was initially introduced in August 2017, abolishing tariffs on 86% of Canada’s exports to Ukraine. While Canadian Prime Minister Justin Trudeau and President Volodymyr Zelensky planned to update the agreement in 2019, the process was hindered by the Covid-19 pandemic and Russia’s full-scale invasion.
However, Ottawa and Kyiv jumped back onto the negotiation table in 2022 and agreed to new terms in record time. On Sept. 22, 2023, Trudeau and Zelensky signed the modernized CUFTA in Ottawa.
“Canada's investment is about $14 billion in a range of supports from humanitarian to military and financial. The trade agreement is a part of that arsenal of support,” Canadian Trade Minister Mary Ng told the Kyiv Independent on June 27 during a visit to the capital with a Canadian business delegation.
In a sit-down interview in central Kyiv, Ng explained how the deal will bolster Ukrainian and Canadian businesses, help Ukraine’s economic recovery, and stressed why it's important to support women in business in Ukraine.
This interview has been edited for clarity.
The Kyiv Independent: How can the modernized CUFTA help Ukraine's economy and its reconstruction?
Mary Ng: The modernized agreement updated the chapters in the agreement. Before we used to trade in goods, that was what the last agreement covered, and now it's expanded to cover areas like trade in the digital sphere, trade in services, trade that facilitates greater collaboration.
There are elements that are hallmarks of a high-quality agreement. That includes standards for labor, for the environment, but also inclusivity; making sure that women and small and medium-sized businesses really are a part of the economy.
In my meetings with my governmental counterparts in Ukraine, one of the things they're very focused on is the continued prosperity and future growth of small and medium-sized businesses.
We hope to collaborate there and my business delegation includes a really important organization, the Canada-Ukraine Chamber of Commerce. They are a network of many Canadian businesses who wish to partner or collaborate in Ukraine.
The free trade agreement creates the right conditions and the rules that help businesses do business. Businesses always say to me that predictability and certainty is what they're looking for.
The Kyiv Independent: Who have you met with on your trip to Kyiv?
Mary Ng: On the government side, I met with Deputy Prime Minister Yulia Svyrydenko, who is my counterpart. I also had the opportunity to meet with Prime Minister (Denys) Shmyhal. It's important to meet governmental counterparts, because there are some things that we as government need to understand in terms of priorities and how best to collaborate to do that.
I brought a business delegation and they convened a round table of businesses with the CEO Club and the Canada-Ukraine Chamber of Commerce. This was important because it is about businesses in Canada and Ukraine and government, as in me, exploring opportunities to invest and do business in Ukraine.
The Kyiv Independent: What sectors were they from?
Mary Ng: From Canada, we have BlackBerry, defense companies like General Dynamics, and mining and industrial services that are already in Ukraine. CAE is another important aerospace and defense company as well.
The range of sectors is really important to what Ukraine is looking for in terms of its needs.
The Kyiv Independent: Which sectors do you see as most important to support at this time?
Mary Ng: Energy security is really important, particularly recently with Russia destroying energy assets. The company Aecon and Ukrhydroenergo are working together on a project.
Defense is obviously really important. Training that companies like CAE could be doing is also really important for (Ukraine).
Liliane Bivings
The Kyiv Independent: Are Canadian businesses expressing interest in Ukraine now, even during the war?
Mary Ng: Yes. In fact, the Canada-Ukraine Chamber of Commerce has held Rebuild Ukraine conferences for the last couple of years.
It’s a really important forum that brings together all the right people to help have that dialogue about what we could be doing together in the rebuilding effort.
The Kyiv Independent: Canada is particularly interested in supporting women in business in Ukraine: Do you see this growing in importance during the war as women are now proportionally more representative in the private sector than before?
Mary Ng: Absolutely, but I would make the following case to you, because I make this case in Canada as well. In Canada, we can add up to $150 billion to our economy by doing one thing, greater women's economic participation in the economy. Globally, it’s $12 trillion.
I think that Ukraine has an extraordinary opportunity here. I've met incredibly dynamic women leaders and entrepreneurs, but also government leaders. I'm looking forward to working with Ukraine there.
The Kyiv Independent: Do Ukraine's efforts on enabling a business environment make sense without war risk insurance? And how can Canada protect Canadian investments in Ukraine during the war?
Mary Ng: A couple of weeks ago, our export credit agency, Export Development Canada, signed an MOU with other export-credit agencies across the G7 on a collaboration on this very issue.
We're making really good progress and that work will continue. I do hear it from Canadian businesses, so Canada is going to work on it. We're also working with other allies on an insurance program that allows companies to operate in Ukraine.
The Kyiv Independent: There's been growing pressure on private businesses in Ukraine recently from nefarious actors. How can Ukraine ensure a healthy business environment for foreigners?
Mary Ng: I'll go back to the free trade agreement. It is an excellent agreement, and what businesses always say to me is that they want to know the rules to help them plan and give certainty.
There is a chapter in the agreement on state protection for investors. Ukraine asked for that to be in this agreement. I think it's really important to have a free trade agreement that is a rules-based agreement that is a progressive and high standard. That's what businesses look for.
Having negotiated (the agreement) in record time and it coming into force on July 1, to be here with a business delegation and having the agreement is walking that talk.
The Kyiv Independent: In 2021, bilateral trade between Canada and Ukraine was at its highest point at $447 million. Do you expect trade to surpass these levels in the coming years?
Mary Ng: My own perspective is that we could be doing a lot more with Ukraine and I think that's what this agreement is all about.
It's about creating the conditions by modernizing it, by adding things like services and digital services and new elements to the trade agreement that will, if you expand the sectors and partnership, ultimately expand this relationship.
It is not just for the immediate. Negotiating an agreement of this nature means that we commit to each other to do more for decades to come.
The Kyiv Independent: Why is it so important to support Ukrainian small and medium-sized businesses?
Mary Ng: In Canada, our small and medium-sized businesses make up 99% of our economy.
Most of Ukraine’s businesses are also small and medium-sized businesses and they really are the engines of resilience and growth.
It's important for us to collaborate in many sectors. For Canada, it's important to stand with Ukraine because they're fighting for their territorial integrity, they're fighting for their independence, and they're fighting for democracy.
In doing so, it's important to Canada as a democratic country with shared values to support the fight for democracy.
Kateryna Hodunova
