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6:15 AM Saturday, November 18, 2017
Tech
Canada and Ukraine Jump the Gun on Free Trade Pact
Ag, IT and Coal deals done prior to Aug. 1 start of free trade; Bombardier wants to sell commuter jets and rail cars
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

KYIV – On Sunday, Kyiv’s central avenue, Kreschatyk, goes Canadian -- street hockey games and maple sugar and lobster sales. Canada and Kyiv celebrate the 150th anniversary of Canada’s emergence as a nation.

As the anniversary approaches, Roman Waschuk is taking stock of two countries, separated by geography but joined by migration and shared Western values.

By the end of this summer, a free trade pact between Canada and Ukraine isr to be in place, says Waschuk, a member of Canada’s 1.3 million strong Ukrainian diaspora.

At the Canadian Embassy on Kostolna Street, Amb. Waschuk stands with poster marking Canada's 150 anniversary (photo: James Brooke

Free trade in sight, deals already are being done.

Through several purchases over the last year, Fairfax Financial now owns 28 percent of the voting rights of Astarta, Ukraine’s largest sugar producer. The Toronto-based group now has the right to nominate the chairman of the board of Astarta, one of Ukraine’s largest agro-holdings.

“Several Canadian grain storage manufacturers are seeing deals in the pipeline,” the Ambassador says, referring to Ukraine’s agricultural sector, which increasingly is recognized as world class.

In food processing, representatives of 14 agro food companies traveled last month to Toronto to pitch their products to Canadian divisions of such global retailers as Walmart, Sobeys, Metro, Farm Boy, and Loblaws. Packaged under the retailers private labels, the Ukrainians are interested in supplying Canadian chains with honey, sunflower oil, walnuts, canned vegetables, garlic, tomato paste, macaroni products, and canned peas.

“The requirements of big grocer chains are significant – they don’t need 5,000 jars of jam – they need 500,000 jars of jam,” the Ambassador says. “Already in Canada, one out of the 10 glasses of apple juice is served with Ukrainian concentrate.”

Street hockey is played on sneakers or rollerblades

IT Matchups

On the IT side, startup fairs and dozens of meetings are producing cross fertilization between Canadian capital and Ukrainian brain.

Kodisoft, a Kyiv company that makes interactive electronic table tops for restaurants, has become a Canadian-Ukrainian venture due to an injection of Canadian funds.

Two weeks ago, TIU Canada Ltd. broke ground on a 10-megawatt solar energy plant in Nikopol, Dnipropetrovsk Oblast. TIU is owned by Refraction Asset Management, an investment manager based in Calgary.

This spring, after a blockade stopped coal imports from the separatist areas of Donbas, Canada stepped in, increasing its exports of coking coal to Ukraine eight times.

Air Travel to Improve

Canada is a continental nation with a population similar to that of Ukraine – 37 million people in Canada, and 40 million Ukraine. Given Canada’s transport experience, Canadians believe that civil aviation will grow here, offering sales opportunities to Bombardier. The Montreal-based company makes three kinds of short haul jets, with passenger capacities ranging from 70 to 160.

“You can fly to Kherson again and Chernivsti again – they are spokes in the Kyiv hub,” the Ambassador said, referring to oblast capitals which now have 75-minute flights to Boryspil, the hub for Ukraine International Airlines. “You are seeing reactivation of regional airports. Point to point within Ukraine would be the next step.”

For Canadians who currently fly to Ukraine via Warsaw, the dream is restoration of direct Toronto-Kyiv flights. This route was flown by Aerosvit, an airline that went bankrupt in 2013.

This year, its successor airline, Ukraine International Airlines, is to receive two long haul Boeing 737-800 jets. With a range of 10,000 km, they can easily make the 7,500 km flight from Kyiv to Toronto.

Canada and Ukraine get close: After signing of Ukraine-Canada free trade agreement in Kyiv last July, Stepan Kubiv, Economic Development and Trade Minister, moves in on Chrystia Freeland, then Canada's Minister of International Trade. Watching in the background are: Prime Minister Justin Trudeau, President Petro Poroshenko and Prime Minister Voldymyr Groysman. Freeland is now Canada's Foreign Minister. (UNIAN/Vladimir Gontar)

Bombardier Looks at Ukraine Rail Renewal

On the ground, Bombardier Transportation Ukraine, the local subsidiary of the manufacturer of railway rolling stock, is keeping a close eye on capital expansion plans of Ukrzaliznytsia, the state railways. This week, Ukrzaliznytsia signed an agreement with the EBRD for a $260 million program to buy new rail cars. Of the total, EBRD will provide 58 percent, or $150 million.

Over the next five years, Urkzaliznytsia plans spend about $650 million to buy 20,000 new rail cars, a renewal of 30 percent of its rolling stock. The state rail monopoly also has plans to buy hundreds of locomotives.

No Visa Free

Although Ukrainians have free trade and now visa free access to the European Union, the Ambassador does not see Ukraine winning visa free access to Canada anytime soon. He notes that only this year Canada is lifting visa restrictions on Romania and Bulgaria, two countries that joined the EU one decade ago.

Last year, about 3,000 Ukrainians emigrated to Canada, he says.

Regarding the movement of Canadian military trainers inside Ukraine, he confirmed that the Canadians will no longer be restricted to a training base in the far west, Lviv Oblast. Now, they can perform training missions anywhere in Ukraine “outside of the ATO,” he says, using the government abbreviation for the Anti-Terrorist Operation, or war zone.

Needed: Anti-Corruption Court

Regarding the future of foreign investment here, the Ambassador joins a foreign and Ukrainian chorus that argues that an effective court system is necessary for Ukraine to really grow.

“We are interested in a mechanism that would allow corruption cases to be tried effectively in special chamber, a special court,” he said, opting for a Ukrainian judicial channel inside Ukraine.

Oksana Syroyid, deputy speaker of the Rada, spent three days in Ottawa last month, lobbying for Canadian help in setting up an independent anti-corruption court. Reflecting decades of people to people ties between Ukraine and Canada, Syroyid received a master's degree in law from the University of Ottawa in 2003.

A poster display outside Canada's Embassy features Canada's ethnic and geographic diversity (photo: James Brooke)


For comments and story tips, please contact UBJ Editor in Chief James Brooke at james.brooke@theubj.com

Slider Photo: Canada's Prime Minister Justin Trudeau greets a refugee child in a posterdisplay on Kyiv's Sofiyska Square. Ukraine's 1.5 million internally displaced people are not considered refugees because they have not crossed an international border. (Photo: James Brooke)

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