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A Primer: Canada-Ukraine Trade

By Nick Krawetz

Unsurprisingly, Canadian trade with Ukraine is miniscule. So miniscule that it represents thirty-four thousandths of one percent (.034%) of total Canadian exports and imports. In 2013, Canadian exports to Ukraine totaled roughly $210.3 million while imports from Ukraine were approximately $112.2 million. Compared to Poland, a country that was economically comparable to Ukraine in the late 1980s/early 1990s, Canadian exports amounted to $458 million while imports totaled roughly $1.25 billion last year. These figures represent more than a five-fold difference when compared to Ukraine. Hence, when taking bilateral trade flows ($322.5 million) as a percentage of total Canadian exports and imports (roughly $947 billion) into account, one can develop a sense of the nature, scope, and potential of trade relations between Canada and Ukraine.

 
TOTAL CANADIAN EXPORTS TO UKRAINE (value in Thousands of Canadian Dollars)

 
TOTAL CANADIAN IMPORTS FROM UKRAINE (value in Thousands of Canadian Dollars)

 
In regard to Canadian exports to Ukraine, over the past ten years (2004-2013) five categories of exports have consistently been in the top five: seafood product preparation packaging ($39.6 million), pharmaceutical and medical manufacturing ($28.2 million), animal slaughtering and processing ($25.3 million), metal tank (heavy gauge) manufacturing ($11.9 million), and agricultural implement manufacturing ($7.9 million). Interestingly, in 2013 exports related to coal mining accounted for $45.4 million.

 
TOTAL CANADIAN EXPORTS (TOP 25 INDUSTRIES) TO UKRAINE (value in Canadian Dollars)

 
Over the same time period, top Ukrainian imports have been connected to coal mining ($23.3 million), iron and steel mills and ferro-alloy manufacturing ($15 million), fertilizer manufacturing ($9.5 million), plate work and fabricated structural product manufacturing ($9.2 million), and iron and steel pipes and tubes manufacturing ($7.5 million).

 
TOTAL IMPORTS (TOP 25 INDUSTRIES) FROM UKRAINE (value in Canadian Dollars)

 
Manitoba’s trade with Ukraine has been minimal. In 2013, total Manitoba exports to Ukraine totaled only $3.6 million while imports were roughly $5.4 million. The top export was agricultural implement manufacturing goods ($1.9 million) while the largest sources of imports were related to iron and steel manufacturing ($2.8 million). In comparison to the United States, Manitoba exported $8.4 billion while importing $15.4 billion last year from our neighbour to the south.

 
TOTAL MANITOBA EXPORTS TO UKRAINE (value in Thousands of Canadian Dollars)

 
TOTAL MANITOBA IMPORTS FROM UKRAINE (value in Thousands of Canadian Dollars)

 
On a provincial basis, British Columbia ($74.9 million), Quebec ($62 million), Ontario ($28 million), Alberta ($24.6 million), and Newfoundland and Labrador ($9.2 million) were the largest exporters to Ukraine in 2013. In the same year, Quebec ($56.4 million), Ontario ($26.9 million), Saskatchewan ($10.9 million), Alberta ($7.5 million), and British Columbia ($5 million) were the largest importers.

 
TOTAL CANADIAN EXPORTS (DISTRIBUTION BY PROVINCE) TO UKRAINE (value in Canadian Dollars)

 
TOTAL CANADIAN IMPORTS (DISTRIBUTION BY PROVINCE) FROM UKRAINE (value in Canadian Dollars)

 
Given the above figures, relatively speaking Canada does not have an “economic dog” in Ukraine’s fight as Canadian trade is primarily geared towards our traditional trading partner, the United States (2013: $358 billion in exports, $248 billion in imports), and other countries such as China, Japan, Mexico, and the United Kingdom. However, if one considers Canada’s interest in European security, efforts promoting international democratic development, and, of course, domestic political considerations then the picture becomes clearer as to why Canada has attempted to foster closer ties with Ukraine since its independence. Moreover, opening up new markets and cultivating economic ties with other countries is also important to Canada given its dependency on international trade.

To date, Canada and Ukraine have held five rounds of negotiations regarding a bilateral free trade agreement (FTA). Once completed and enacted, a Canada-Ukraine FTA certainly has the potential to increase access for Canadian goods and services to Ukraine’s market (and vice versa), help reduce tariff barriers, and facilitate other trade and investment relations. In the fall of 2013, however, Canada suspended free-trade talks with Ukraine as Ottawa expressed its dissatisfaction with Ukraine’s attempt to renegotiate tariff reductions at the World Trade Organization (WTO).

Given Ukraine’s dire economic situation, hopefully Canada and Ukraine will soon be able to return to the negotiating table. Presumably, this will depend on resolving WTO concerns and the outcome of the upcoming presidential election next month. A finalized Canada-Ukraine FTA would also help complement the current Canadian government’s emphasis on “economic diplomacy” and provide another notch on the belt of recently-signed bilateral trade agreements.

Overall, Canada-Ukraine trade figures are obviously negligible when compared to total Canadian export and import statistics. Although the main point is that Ukraine has great potential and the Ukrainian internal market offers vast opportunities in many economic sectors for Canadian entrepreneurs and investors. It is not a question of ‘if’ Ukraine will fully integrate into the European Union, it is a question of ‘when’. Thus, the Canadian government and Canadian companies and businesses should take a long-term view regarding Ukraine’s development.

Ukraine will eventually throw off the shackles of the past and implement necessary structural reforms that will contribute to its economic growth and societal transformation. Returning to the negotiating table and finalizing the Canada-Ukraine FTA represents an opportunity for economic rewards in the future. The only question is whether Canadians and Ukrainians will be able to demonstrate enough foresight to seize this window of opportunity to reap both short and long-term benefits.

Trade statistics available at: https://www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/Home

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