Canadian delegation set for Ukraine free-trade talks

The Canadian government, which is resuming free trade talks with Ukraine to strengthen Kyiv’s ties with the West, has sent a delegation led by Trade Minister Ed Fast to pave the way for deeper commercial relations.

Mr. Fast will hold a first meeting with his counterpart in the new government of Petro Poroshenko, elected in May to replace ousted pro-Russian president Viktor Yanukovych.

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Fresh trade ties that turn Ukraine more westward are a source of irritation for Russia and in June, Moscow condemned a deal to lower commercial barriers between the 28-member European Union and the administration led by Mr. Poroshenko.

But Prime Minister Stephen Harper, who has cultivated a role as the most outspoken Group of Seven leader on Russia’s efforts to destabilize Kyiv, has made a trade deal with Ukraine a new priority. During a March visit to Ukraine, shortly after Moscow officially annexed Crimea, he vowed to resurrect bilateral trade negotiations that Ottawa had suspended in June, 2013.

Mr. Fast meets with Ukraine’s Economic and Trade Minister Pavlo Sheremeta on Thursday, and said in a statement that his mission will “build on Prime Minister Harper’s commitment to supporting Ukraine’s goals of securing a free, sovereign and democratic future.”

Ukraine’s ambassador to Canada, Vadym Prystaiko, said Ottawa and Kyiv were in the late stages of a trade deal last year when talks were put on ice. At the time, Canada blamed Ukraine’s attempt to renegotiate hundreds of tariff reductions at the World Trade Organization, but it may also have been a sign of Ottawa’s eroding relations with the Yanukovych government.

Two-way trade between Canada and Ukraine is worth only about $300-million, and one challenge is that both countries have big agricultural sectors.

“It’s not very easy to trade between Ukraine and Canada: We are mostly producing the same thing,” Mr. Prystaiko said.

He said he doesn’t regard a trade deal with Canada as a gift from Ottawa, but rather an agreement based in self-interest that provides a foundation for closer ties. “Special relations should be filled with something … not just singing, dancing and sending athletes. Real interests and real business.”

Some of the greatest gains might come from a deal that made it easier for Canadians to invest in the eastern European country, to sell Canadian services to Ukraine such as banking and communications, and allow freer movement of business people between the two nations.

Paul Grod, president of the Ukrainian Canadian Congress, said he believes Ottawa now wants to work toward a more far-reaching free-trade deal with Ukraine than originally envisioned.

Mr. Fast and business leaders will be in Kyiv from July 9 to 12 to find ways for Canadian businesses to partner with Ukrainians in energy, mining, aerospace and agriculture, the federal government said Wednesday.

Mr. Sheremeta recently announced an economic advisory council with big Canadian connections to help guide the Poroshenko government. It’s headed by Dr. Basil Kalymon of the Richard Ivey Business School at the University of Western Ontario and includes a number of Canadian experts such as Dr. Oleh Havrylyshyn, from the Munk Centre at the University of Toronto and project co-ordinator Peter Sochan, a banking expert from Toronto.

Follow Steven Chase on Twitter: @stevenchase

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