Special to The Ukrainian Weekly
OTTAWA – Faced with a July 24 deadline to pay $120 million to private-bond holders or risk default on its debt along with an economy expected to shrink by as much as 9 percent this year according to the International Monetary Fund, Ukraine received a small boost last week when Prime Minister Arseniy Yatsenyuk marked his first bilateral visit to Canada since taking office last year by signing a free trade deal on July 14 with his Canadian counterpart, Stephen Harper.
The Canada-Ukraine Free Trade Agreement (CUFTA), announced in Chelsea, Quebec, near Prime Minister Harper’s summer residence at Harrington Lake, will eliminate nearly all (99.9 percent) duties on imports from Ukraine to Canada, including tariffs on such key goods as sunflower oil, candies and chocolates, baked goods, vodka, apparel and ceramics. Ukraine will also remove duties on 86 percent of Canadian imports on such products as beef, canola oil, frozen fish, caviar and cosmetics.
Canada-Ukraine trade has been on the decline, dropping to $244 million (about $189 million U.S.) last year from $322 million (about $249 million U.S.) the previous year – and less than the $400 million (about $310 million U.S.) in low-interest bilateral loans Canada has given Ukraine since its political crisis began in 2013, the year in which World Trade Organization statistics show that Ukraine was not among Canada’s 40 trading partners.
As the National Post punctuated in an editorial, Canada’s exports to Ukraine represent one ten-thousandth of Canada’s gross domestic product.
However, the Canadian government projects a 19 percent increase in bilateral trade as a result of the CUFTA that required six rounds of negotiations since 2010 and which still needs ratification from both countries’ Parliaments.
Canadian exports to Ukraine – ranging from pork to motor vehicles – are expected to increase by $41.2 million (about $32 million U.S.), and Ukrainian exports to Canada, mainly in textile, apparel and metal products, are expected to rise by $23.7 million (about $18 million U.S.).
Prime Minister Yatsenyuk called the CUFTA “another step in the blossoming of our nations” and said it “should deepen Ukraine-Canada cooperation and increase two-way investment.”
Canada, along with Ukraine’s “international friends and partners,” is “the flagship in supporting Ukraine in our quest and fight against the Russian-led terrorists,” he told reporters.
Office of the Prime Minister of Canada
The Canada-Ukraine Free Trade agreement is signed by Ukraine’s trade representative Nataliya Mykolska, and Marvin Hildebrand, representative of Foreign Affairs, Trade and Development Canada, as the prime ministers of the two countries look on.
Prime Minister Harper said the deal – the 44th free trade agreement under his watch – would help Ukraine move toward “a Western future, a future of prosperity” away from Russian influence, and marks “another milestone in the important relationship between our two countries.”
Zenon Potichny, president and chairman of the Canada-Ukraine Chamber of Commerce, noted that the CUFTA is Canada’s only free trade agreement in Europe apart from the much larger one Canada reached with the European Union nearly two years ago. That trade deal pumps about $12 billion (about $9 billion U.S.) into the Canadian economy, according to the Canadian government.
“The Canada-Ukraine FTA will level the playing field for Canadian businesses by providing increased access for Canadian goods and services to the Ukrainian market through tariff elimination,” as well as assist Ukrainian companies in accessing the North American market “and help Ukraine secure its energy independence, by applying world-renowned Canadian technology and equipment in the oil and gas sectors,” said Mr. Potichny in a news release from the Ukrainian Canadian Congress.
In an interview with The Globe and Mail following his July 14 meeting with Prime Minister Harper, Prime Minister Yatsenyuk said he would like Canadian investors to buy billions of dollars of government enterprises, including power generation and chemical plants, and bring to Ukraine “good corporate governance” along with new investment and jobs. “I don’t want Ukrainian tycoons to buy these state-owned enterprises.”
Mr. Yatsenyuk told Globe parliamentary reporter Steven Chase that Kyiv is also tackling corruption – a major problem in Ukraine that earned it a ranking of 142nd out of 174 countries on Transparency International’s 2014 Corruption Perceptions Index – and said he believes that increasing public-sector wages would help prevent civil servants from accepting bribes, a major move in the fight against corruption.
In another interview, with the CBC News television network, the Ukrainian prime minister welcomed Canadian weapons and ammunition in Ukraine’s other and even more significant fight against Russia.
Two months ago, Canadian Defense Minister Jason Kenney told The Ukrainian Weekly that option was “on the table,” but that Canada would need at least one other ally to provide Ukraine with arms. A month later, he told the Globe that a military inventory conducted earlier this year revealed that Canada doesn’t have “useful, operable equipment” it could send to Ukraine. He added that Canada would have to buy weapons to fit the Soviet systems Ukraine uses if Canada decided to help arm Ukraine.
However, Canada is providing satellite imagery to Ukrainian forces fighting along the eastern border with Russia, along with non-lethal aid, including uniforms and night-vision goggles, and about 200 troops to train Ukrainian military personnel until March 2017.
This week, the Canadian government delivered a mobile field hospital to Ukraine’s armed forces in Kyiv.
Canada has also imposed a host of sanctions against Russians and Ukrainians associated with the regime of Russian President Vladimir Putin, who has been repeatedly criticized publicly by Prime Minister Harper regarding what Canada considers to be Russia’s illegal occupation of Crimea.
Earlier this month, The Canadian Press news agency also reported that the Canadian Embassy in Kyiv – situated adjacent to the Maidan – was used as a safe haven last year for anti-government protesters who camped in the main lobby for at least a week in February during the uprising that toppled former President Viktor Yanukovych’s regime. Some of the wounded protesters were treated there and later transferred to hospitals. But not all of the protesters came from the streets. Inna Tsarkova, the local spokeswoman for the Embassy and a member of the Auto-Maidan group, had her car torched but declined to discuss her experience with CP’s senior defense reporter Murray Brewster.
But former Canadian diplomat and one-time al-Qaeda hostage Bob Fowler did. He criticized Canada’s foreign policy toward Ukraine, calling it “all mouth and no brain,” and said that, “people within NATO [of which Canada is a member] …know about Canada’s military capabilities [and] know about what we could and could not do and they know our posturing is utterly vacuous.”
Yet in his CBC interview with “Power & Politics” host Rosemary Barton, Prime Minister Yatsenyuk praised both Prime Minister Harper for using “the tough right language” regarding Russia and the Canadian government for being “very strong, forward-leaning” in doing “everything they believe in,” that Russia is “an aggressor” and that Ukraine is a “victim.”
The Ukrainian prime minister said that Ukraine is “just the battlefield… against the Russian-led aggression,” and that Russia also poses a threat to Canada. “It’s not just about Ukraine,” he said. “It’s about Canadian security too.”
Some political observers believe that Canada’s strong support for Ukraine is also about the ruling federal Conservatives courting votes from the estimated 1.2 million ethnic Ukrainian Canadians.
Canadians will head to the polls in a national election on October 19, and the Tories may target key ridings as CP recently reported, based on leaked documents from the last campaign four years ago when they apparently did just that.
Among the ridings “where Canada’s approach to Ukraine could be a ballot box question” this year is the Toronto riding of Etobicoke Center, which has a population of more than 113,000 residents (according to the last national census in 2011) of whom only 7.4 percent self-identify as Ukrainians. Yet it’s a riding the Conservatives fought hard to win in the 2011 election – and their candidate, Polish Canadian Ted Opitz, emerged victorious despite attempts by the defeated Liberal incumbent, Ukrainian-Canadian Borys Wrzesnewskyj, to quash Mr. Opitz’s narrow 26-vote victory based on voting irregularities.
The battle went all the way to the Canadian Supreme Court, which in 2012 upheld Mr. Opitz’s electoral win based on voting results that a lower court had ruled were “null and void.”
Mr. Wrzesnewskyj is running again this year to regain Etobicoke Center for the Liberals – and is meeting the Conservatives on their own rhetorical turf.
“We have a special relationship with Ukraine,” he recently told New Pathway (Novy Shliakh), the weekly newspaper of the Ukrainian National Federation of Canada. “Let’s give it substance by showing leadership at this critical time.”