June 24, 2016

Trudeau reaffirms close partnership between Canada and Ukraine


PM announces his first official visit to Ukraine

OTTAWA – Prime Minister Justin Trudeau will make his first official visit to Ukraine next month, and will likely bring the same message he delivered to the Canada-Ukraine Business Forum in Toronto on June 20 that Canada remains “a staunch ally” of Ukraine.

Mr. Trudeau told the audience that Canada would continue to defend Ukrainian sovereignty “in response to Russia’s illegal annexation of Crimea, as well as its support to insurgents in eastern Ukraine,” and that Canada stands “firmly” beside Ukraine in its efforts to “strengthen democracy, respect the rule of law, and encourage economic growth.”

“We will continue to contribute assistance and expertise whenever possible,” said the prime minister, “because we understand that a strong democracy is at the heart of economic prosperity.”

“Ultimately, we want to help create stability in Ukraine so that the middle class can grow and thrive,” he added.

Mr. Trudeau will visit Ukraine on July 11-12 and will meet with both President Petro Poroshenko and Prime Minister Volodymyr Groysman, after attending the NATO Summit of Heads of State and Government in Warsaw.

The Canadian PM met with Mr. Poroshenko at last year’s Paris Climate Conference, and his ministers of foreign affairs (Stéphane Dion) and defense (Harjit Sajjan) have met several times with their Ukrainian counterparts since Mr. Trudeau’s Liberals formed the government last November.

One of Prime Minister Trudeau’s top priorities while he’s in Ukraine will be to sign the Canada-Ukraine Free Trade Agreement (CUFTA), which International Trade Minister Chrystia Freeland, a Ukrainian Canadian, who also spoke at the forum, has been finalizing.

Mr. Trudeau’s prime ministerial predecessor, Stephen Harper, announced during then-Ukrainian Prime Minister Arseniy Yatsenyuk’s visit to Canada last July that a deal had been reached following five years of negotiations.

Once the CUFTA is implemented in both countries – perhaps next year – Ukraine will eliminate tariffs on 86 percent of Canadian exports, with the balance to be phased out or subject to tariff reductions over seven years. The affected products range from beef, fish and seafood, to cosmetics and some iron and steel products.

Canada, meanwhile, will remove almost all tariffs (99.9 percent) on imports from Ukraine, including sunflower oil, candies and chocolate, baked goods, vodka, apparel, ceramics, iron and steel, and minerals.

The agreement will also give Canadian suppliers “the right to fair, non-discriminatory and predictable treatment when bidding on procurement opportunities tendered by Ukrainian central government entities, including government departments and agencies, as well as several public enterprises such as airports, the postal system and public transportation (rail and subway systems),” according to a Global Affairs Canada backgrounder on the deal.

Global Affairs Canada, headed by Mr. Dion (a government department that also includes Minister Freeland), and Ukraine’s Ministry of Economic Development and Trade presented the Canada-Ukraine Business Forum in partnership with the Canada-Ukraine Chamber of Commerce and the Conference Board of Canada, which is implementing the Canadian government’s five-year Canada-Ukraine Trade and Investment Support project to increase bilateral trade and investment.

The one-day forum featured break-out sessions on four key sectors – information and communications technologies, agriculture and food, infrastructure and logistics, and energy efficiency and renewables – and brought together Canadian and Ukrainian political and business leaders, highlighted by Prime Minister Trudeau’s appearance.

Also there were Ukrainian First Deputy Prime Minister and Economic Development and Trade Minister Stepan Kubiv, an economist who briefly served as head of Ukraine’s National Bank, along with Ukraine’s Finance Minister Oleksandr Danylyuk, and the country’s recently appointed ministers of infrastructure (Volodymyr Omelian), agricultural policy and food (Taras Kutovy), and ecology and natural resources (Ostap Semerak).

Some of Ukraine’s top business and industry stars were at the Toronto forum too, including mergers-and-acquisitions expert Anatole Klepatsky, founder and CEO of investment banking firm Altius (with offices in Kyiv and Ottawa); Ukraine International Airlines President and CEO Yuriy Miroshnikov; and Andriy Kobolyev, chairman and CEO of Naftohaz Ukrainy, the state-owned national oil and gas company.

The idea behind the forum was to highlight the business opportunities available in Ukraine – and they “abound,” according to a brief about the event by Brent Dowdall, senior manager of research and business development at the Conference Board of Canada.

“One of the most cherished Canadian products – hockey sticks – are manufactured in Ukraine,” he wrote. “That alone should be enough to get the attention of Canadians who are looking for business and investment opportunities in Ukraine.”

Mr. Dowdall explained that many Canadian-Ukrainian business partnerships are already in place. Semex Alliance Ukraine, LCC, is the exclusive importer of Canadian genetics for artificial insemination in dairy cattle throughout Ukraine. Kyiv-based Pharmascience Ukraine is a major distributor of Canadian pharmaceutical products.

Toronto-Kyiv, a Ukrainian-Canadian private joint stock company, owns and operates the largest and one of the first mixed-use real estate properties in Ukraine in a complex situated in the capital. It consists of green-friendly office premises, retail space, restaurants, underground parking and a major hotel with business center located across from the landmark St. Nicholas Roman Catholic Cathedral.

Yuri Kryvosheya, president and managing partner of the Toronto-Kyiv venture, was a panelist at the business forum, as was Lenna Koszarny, the Ukrainian-Canadian CEO of Kyiv-based, private-equity firm, Horizon Capital, which has over $600 million (U.S.) under management.

Veteran Canadian journalist and long-time Ukraine observer Diane Francis, who chaired a session on doing business in Ukraine, recently wrote in the Financial Post about significant technology deals in Ukraine during 2015, including Google’s $45 million (U.S.) acquisition of the Ukrainian facial-recognition company Viewdle and Snapchat’s $150 million (U.S.) purchase of the Odesa-based start-up Looksery.

The goal of Ukraine’s tech industry, she said, “is to double – to 200,000 – the number of IT professionals with proficiency in English through collaboration with governments, companies and universities.”

It’s about transforming Ukraine from being “the world’s breadbasket” to its “brain basket,” according to a quote in Ms. Francis’s article from Yevgen Sysoyev, managing partner of the early-stage venture firm AVentures Capital in Kyiv.

But Canada’s connection to Ukraine isn’t solely focused on trade and investment. There’s also a military component, with about 200 Canadian Armed Forces personnel in Ukraine to “deliver training and capacity-building programs” until next March, according to a release from the Canadian prime minister’s office.

Mr. Trudeau will likely face pressure to expand Canada’s presence in Eastern Europe when he attends the NATO meeting in Warsaw.

Jens Stoltenberg, secretary general of the military alliance, recently told CBC News Network that while the Canadian government has already provided CF-18 fighter jets for Baltic air policing, a frigate as part of NATO’s force patrolling the Mediterranean and Black seas, and Canadian soldiers for training exercises in Poland, the alliance “would welcome even more” from Canada.

Specifically, that would mean Canada providing troops, likely in the Baltic, and leading one of four battalions as part of a NATO brigade to stave off the security threat Russia poses in Eastern Europe.

However, the Canadian government is reportedly reticent to become more involved over concerns it could detract from a potential United Nations mission in French West Africa as Canada re-embraces its traditional peacekeepiung role, which the Liberals committed to do in last year’s federal election campaign.

Meanwhile, Canada’s Official Opposition Conservative Party accuses the Trudeau Liberal government of cozying up to Russia and its President.

“[Vladimir] Putin has indicated that he and Prime Minister Trudeau have discussed re-establishing full relations, which is deeply worrying [and] yet another sign that the Liberal government has no desire to stand firm against the Russian invasion of Ukraine and annexation of Crimea,” Members of Parliament Tony Clement and James Bezan (a Ukrainian Canadian), who serve as opposition foreign affairs and defense critics, respectively, said in a statement.

However, at a June 22 Ottawa news conference marking the end of the parliamentary session, Prime Minister Trudeau said his government has “real concerns about Russia and about its actions, and we will be thoughtful and firm, as I have always been on how we re-engage with Russia.”