On March 7, 2017, BillC-31 "An Act to implement the Free Trade Agreement between Canada and Ukraine" passed second reading in Canada's Senate. Bill C-31 is now being reviewed by the Senate of Canada Standing Committee on Foreign Affairs and International Trade. After the Report is prepared by the Standing Committee on Foreign Affairs and International Trade, Bill C-31 returns to the Senate for third reading and debate. After third reading, the Canada-Ukraine Free Trade Agreement ("Canada-Ukraine FTA") can be ratified.
Canada has agreed to reduce most customs duty rates to "free" or 0% immediately upon implementation on goods that meet the rules of origin. Pursuant to Chapter 2 of the Canada-Ukraine FTA, each party shall reduce or eliminate customs duties on goods originating in either party in accordance with the tariff elimination schedules in Annex 2-B. In Article 1 of Annex 2-B, Canada agrees to eliminate customs duties on all goods in Chapters 1-97 of the Harmonized System that provides for Most-Favoured-Nation rate of duty, with the exception of any goods Canada has listed in Annex 2-B (which is a short list).
We have prepared a chart, which sets out the H.S. Chapters and Canada's commitments to reduce customs duties when the Canada-Ukraine FTA enters into force.
There are other restrictions such as quotas and rules of origin that must be considered.
The Canada-Ukraine FTA should be in effect soon after ratification by Canada. Canadian importers should start to consider what opportunities are available to import goods originating in Ukraine on a duty free basis.
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