By Taras Prodaniuk
March 22, 2021
On Jan. 27, 2021, Ukraine and Canada celebrated the 29th anniversary of establishing diplomatic relations. After the proclamation of the Act of Independence of Ukraine, Canada was one of the first countries that recognized its independence in 1991. In less than six months, it established official relations with Ukraine.
Throughout the history of Ukrainian independence, it is not easy to cite an example of more friendly and reliable relations aimed at the development of Ukrainian statehood without infringing on its sovereignty. However, our relationship, like any existing process, needs constant development. The article reviews the three most important tracks of these relations and features recommendations to strengthen them.
As a member of the Group of Seven most developed countries globally, Canada is an important strategic partner of Ukraine. After the EuroMaidan Revolution ended Viktor Yanukovych’s presidency in 2014, there was a significant rapprochement between the two countries.
For example, a free trade agreement was signed between Ukraine and Canada in 2016, which opened free access to 98% of Canada’s markets. On Aug. 1, 2017, the agreement came into force. According to the Ministry of Foreign Affairs of Ukraine in 2019, the volume of trade of goods and services between Ukraine and Canada amounted to $394 million. However, the total volume of trade of goods and services between Ukraine and Algeria in 2019 amounted to $614.4 million, without even a free trade agreement. The comparisons indicate the problem of intensive foreign economic cooperation between Ukraine and Canada and the low effectiveness of the trade deal with Canada. Although the agreement was launched, it did not yet lead to the substantial development of our economic relations.
Two factors can explain this situation: first, the relatively high environmental standards for products exported to Canada from Ukraine, and second, the large geographic distance between the two nations. The two capitals are more than 7,000 kilometers apart.
The Canadian market is not quite advantageous for Ukraine. Logistics by sea will look like this: the port in Odesa, the Black Sea, Istanbul, the Mediterranean, Gibraltar, the Atlantic Ocean, and Canada. This route is expensive due to the long distance (fuel costs), tariffs for the passage of straits, and the time spent, which takes at least a month to get from Odesa to the nearest port in Montreal. Air transport, of course, is even more expensive than shipping.
All in all, the Ukrainian side and the Canadian one should pay attention to the services markets, particularly in the information technology sphere that are cross-border and do not require additional costs. Such cooperation will be beneficial to both sides in business.
The Ukrainian IT services market is competitive due to the development of our companies in this field, the availability of specialists, and a relatively inexpensive workforce. Ukrainian companies such as SoftServe, Ciklum, Genesis are already known abroad more than at home. So, Ukraine needs to export wisely and develop its business in Canada to learn how to attack American markets. On the other hand, it gives a chance to avoid any restrictions on environmental standards to export products to Canada.
One of the critical issues in the current relations between Ukraine and Canada is the visa-free regime. Although the problem has been raised more than once on the agenda of our bilateral relations, it has never found its practical implementation. The Canadian side wants Ukraine to guarantee the security of migration processes, strengthen democratic institutions, promote civil society, reform law enforcement agencies and the judiciary, and fight against corruption. On the other hand, at the same time, the Office of the President of Ukraine declares its readiness to obtain a visa-free regime with Canada. This issue is strategically crucial for Ukraine because more than a million Ukrainian diaspora members live in Canada, but their roots, relatives, and friends stay in Ukraine. Also, there is a constant economic interaction between the motherland and their current country.
To achieve a positive result, the Ukrainian side must minimize risks for the Canadian side, strengthen democratic institutions, promote de-oligarchization, eliminate corruption, and ultimately avoid stories such as the crisis of the Constitutional Court of Ukraine. These stories frighten our Western partners, but the ongoing dialogue with the Canadian authorities on visa-free travel gives hope that it will be obtained as soon as possible. It must be understood that this decision may also be politically useful for Canada. If Prime Minister Justin Trudeau can complete this process by the end of his term, he will receive significant support from the Ukrainian diaspora, particularly for the Liberal Party he heads. For the Ukrainian side, this is an opportunity to close a long-standing painful issue. By the way, it will also help the President of Ukraine gain political weight.
In September 2015, the government of Canada launched Operation UNIFIER, which includes military training by the Canadian Armed Forces and capacity and capability building to Armed Forces of Ukraine. Currently, the operation has about 200 CAF employees as part of Operation UNIFIER, extended until March 31, 2022. Since the beginning of the mission, more than 12,500 members of the Armed Forces of Ukraine have been trained by CAF.
Ukraine is also the largest recipient of funding for the Canadian Military Training and Cooperation Program (MTCP). As a NATO member country, Canada supports a joint working group of Ukraine to prepare for accession to the alliance. Canada’s role in assisting Ukraine’s Armed Forces training is not limited to the interstate level. It is worth noting that the Ukrainian diaspora in Canada makes a significant impact in the volunteer movement with its financial and humanitarian assistance. Thus, Canada’s experience in NATO, military programs supporting Ukraine, and material assistance have already made a significant contribution to Ukraine’s security system. One can only note the need to expand programs of cooperation and mutual assistance of our countries, particularly in the field of Black Sea security.
The Ukrainian state energy company Naftogaz has begun to take the first steps in restoring interest in gas and oil production in the Scythian and Dolphin areas on the Black Sea shelf. According to various estimates, the shelf’s future resources can provide Ukraine with an additional output of 10 billion cubic meters of natural gas per year. This program is ambitious, so to avoid future threats from Russia, Ukraine should ensure the complete security of sea borders and the shelf from external provocations.
Taras Prodaniuk is co-founder of the ADASTRA think tank in Kyiv.