Title
Canada - Ukraine Free Trade Agreement
Preamble
Canada and Ukraine, hereinafter referred to as "the Parties",
Recalling the Free Trade Agreement Between Canada and Ukraine, done at Kyiv on 11 July 2016, and which entered into force on 1 August 2017 (the "2017 Agreement");
Desiring to further strengthen bilateral relations through trade, and to build upon the 2017 Agreement through the establishment of an enhanced and modernized new free trade agreement;
resolved to:
Strengthen the special bonds of friendship and cooperation between their peoples;
Contribute to the harmonious development and expansion of world and regional trade and to provide a catalyst to broader international cooperation;
Build on their respective rights and obligations under the WTO Agreement and other multilateral and bilateral instruments of cooperation;
Create an expanded and secure market for the goods and services produced in their territories, as well as promote new employment opportunities and improved working conditions and living standards in their respective territories;
Reduce distortions to trade;
Establish clear, transparent and mutually advantageous rules to govern their trade;
Ensure a predictable commercial framework for business planning and investment;
Enhance and promote the competitiveness of exports and firms in global markets, and conditions of fair competition;
Undertake each of the preceding in a manner that is consistent with environmental protection and conservation;
Protect, enhance and enforce basic workers' rights, and strengthen cooperation on labour matters and build on their respective international commitments on labour matters;
Promote high levels of environmental protection, including through effective enforcement by each Party of its environmental laws, as well as through enhanced environmental cooperation, and further the aims of sustainable development, including through mutually supportive trade and environmental policies and practices;
Encourage enterprises operating within their territory or subject to their jurisdiction to respect internationally recognized corporate social responsibility and responsible business conduct standards and principles and pursue best practices;
Promote broad-based economic development in order to reduce poverty;
Preserve their flexibility to safeguard the public welfare;
and
Recognizing that the promotion and the protection of investments of investors of a party in the territory of the other party will be conducive to the stimulation of mutually beneficial business activity;
Recognizing that States must maintain the ability to preserve, develop and implement their cultural policies for the purpose of strengthening cultural diversity, given the essential role that cultural goods and services play in the identity and diversity of societies and the lives of natural persons;
Affirming their commitment to respect the values and principles of democracy and to promote and protect human rights and fundamental freedoms as identified in the Universal Declaration of Human Rights;
Recognizing that Indigenous Peoples in Canada and Ukraine, including the Indigenous Peoples of the Crimean Peninsula, have the right to economic development and participation in trade and to engage freely in all their traditional and other economic activities, the Parties resolve to improve the economic and social conditions of Indigenous Peoples when implementing this Agreement;
Supporting the growth and development of micro, small, and medium-sized enterprises (SMEs) by enhancing their ability to participate in and benefit from the opportunities created by this Agreement; and
Seeking to facilitate equal access to, and ability to benefit from, the opportunities created by this Agreement for women and men, and to support the conditions for women's full participation in domestic, regional, and international trade and investment.
Have agreed as follows:
Body
Chapter 1. General Provisions and Definitions
Section A. General Provisions
Article 1.1. Establishment of the Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the GATT 1994, hereby continue the free trade area established by the Free Trade Agreement Between Canada and Ukraine, done at Kyiv on 11 July 2016.
Article 1.2. Relation to other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which the Parties are party.
2. In the event of any inconsistency between this Agreement and the agreements referred to in paragraph 1, this Agreement prevails, except as otherwise provided in this Agreement.
3. The WTO Agreement exclusively governs the rights and obligations of the Parties regarding subsidies and the application of anti-dumping and countervailing measures, including the settlement of any disputes about those matters.
Article 1.3. Extent of Obligations
Each Party is fully responsible for the observance of all provisions of this Agreement and shall take reasonable measures that may be available to it to ensure observance of the provisions of this Agreement, except as otherwise provided in this Agreement, by the sub-national governments and authorities within its territory and, in the case of Ukraine, local self-government bodies of oblasts.
Article 1.4. Reference to other Agreements
When this Agreement refers to or incorporates by reference other agreements or legal instruments in whole or in part, those references include related footnotes, interpretative notes and explanatory notes. Unless the reference affirms existing rights, those references also include any successor agreements to which the Parties are party or amendments binding on the Parties.
Section B. General Definitions
Article 1.5. Definitions of General Application
1. For the purposes of this Agreement, unless otherwise specified:
2017 Agreement means the Free Trade Agreement Between Canada and Ukraine, done at Kyiv on 11 July 2016, and which entered into force on 1 August 2017;
Citizen means a natural person who is a citizen of a Party under its legislation;
Joint Commission means the Joint Commission referred to in Article 27.1 (Joint Commission);
Coordinators means the Agreement Coordinators referred to in Article 27.2 (Agreement Coordinators);
customs duty includes a customs or import duty and a charge of any kind imposed on or in connection with the importation of a good, including any form of surtax or surcharge in connection with that importation, but does not include:
(a) a charge equivalent to an internal tax imposed consistently with Article III:2 of the GATT 1994, in respect of like, directly competitive or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) an anti-dumping or countervailing duty that is applied pursuant to a Party's law;
(c) a fee or other charge imposed consistently with Article VIII of the GATT 1994; or
(d) a premium offered or collected on an imported good arising out of a tendering system in respect of the administration of quantitative import restrictions, tariff rate quotas or tariff preference levels;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
Days means calendar days;
DSU means the Understanding on Rules and Procedures Governing the Settlement of Disputes, contained in Annex 2 to the WTO Agreement;
Enterprise means an entity constituted or organized under applicable law, whether or not for profit, and of any form of ownership, whether privately owned or governmentally owned, including a corporation, trust, partnership, sole proprietorship, joint venture or other association;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, contained in Annex 1B to the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
goods of a Party means domestic products as these are understood in the GATT 1994 or such goods as the Parties may decide, and includes originating goods of that Party;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes and subheading notes;
heading means a four-digit number, or the first four digits of a number, used in the nomenclature of the Harmonized System;
measure includes a law, regulation, procedure, requirement or practice;
national means a natural person who is a citizen or is a permanent resident of a Party;
originating means qualifying as originating under the rules of origin set out in Chapter 3 (Rules of origin and origin procedures);
permanent resident means a natural person who is a permanent resident of a Party under its applicable legislation;
person means a natural person or an enterprise;
person of a Party means a national, or an enterprise of a Party;
sanitary or phytosanitary measure means any measure referred to in Annex A, paragraph 1 of the SPS Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement;
state enterprise means an enterprise that is owned or controlled through ownership interests, by a Party;
subheading means a six-digit number, or the first six digits of a number, used in the nomenclature of the Harmonized System;
tariff classification means the classification of a good or material under a chapter, heading or subheading of the Harmonized System;
tariff elimination schedule means Annex 2-B (National Treatment and Market Access‑Tariff Elimination);
territory means:
(a) the land territory, air space, internal waters and territorial sea of the Party;
(b) the exclusive economic zone of the Party; and
(c) the continental shelf of the Party,
as determined by its domestic law and consistent with international law;
UNCLOS means the United Nations Convention on the Law of the Sea done at Montego Bay on 10 December 1982;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
2. For the purposes of this Agreement, a word in the singular includes that word in the plural, except where otherwise indicated.
Article 1.6. Country-specific Definitions
For the purposes of this Agreement, unless otherwise specified:
national government means:
(a) with respect to Canada, the Government of Canada; and
(b) with respect to Ukraine, the Government of Ukraine; and
sub-national government means:
(a) with respect of Canada, provincial, territorial, or local governments; and
(b) with respect to Ukraine, local executive power bodies of oblasts, the autonomous Republic of Crimea and cities with special status.
Chapter 2. National Treatment and Market Access
Article 2.1. Definitions
For the purposes of this Chapter:
Agreement on Agriculture means the Agreement on Agriculture, contained in Annex‑1A of the WTO Agreement;
agricultural good means a product listed in Annex 1 of the Agreement on Agriculture; and
export subsidy means an export subsidy as defined in Article 1(e) of the Agreement on Agriculture.
Article 2.2. Scope and Coverage
This Chapter applies to trade in goods of a Party except as otherwise provided in this Agreement.
Section A. National Treatment
Article 2.3. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, and to this end Article III of the GATT 1994 is incorporated into and made part of this Agreement.
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a sub-national government, treatment no less favourable than the most favourable treatment accorded by that sub-national government to a like, directly competitive or substitutable good, as the case may be, of the Party of which it forms a part.
3. This Article does not apply to a measure set out in Annex 2-A (Exceptions to Articles 2.3 and 2.5).
Section B. Tariffs
Article 2.4. Tariff Elimination on Imports
1. Except as otherwise provided in this Agreement, a Party may not increase an existing customs duty, or adopt a customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall apply its customs duties on originating goods in accordance with its Schedule to Annex 2-B (Tariff Elimination).
3. During the tariff elimination process, each Party shall apply to originating goods traded between the Parties the lesser of the customs duties resulting from a comparison between the rate established in accordance with the Schedule to Annex 2-B (Tariff Elimination) and the applied most-favoured-nation (MFN) rate.
4. At the request of a Party, the Parties shall discuss accelerating the elimination of customs duties set out in their Schedules to Annex 2-B (Tariff Elimination) or incorporating into a Party's Schedule a good that is not subject to tariff elimination. An agreement between the Parties to accelerate the elimination of a customs duty on a good or to include a good in a Party's Schedule to Annex 2-B (Tariff Elimination) shall supersede a duty rate or staging category determined pursuant to a Schedule for that good when approved by each Party in accordance with its applicable internal procedures.
5. For greater certainty, a Party may:
(a) modify a tariff outside this Agreement on a good for which no tariff preference is claimed under this Agreement;
(b) increase a customs duty to the level established in its Schedule to Annex 2-B (Tariff Elimination) following a unilateral reduction;
(c) maintain or increase a customs duty as authorized by this Agreement, the Dispute Settlement Body of the WTO or any agreement under the WTO Agreement; or
(d) create a new tariff line more specific than the subheading level, provided that the Party does not impose customs duties on a good classified under that new tariff line greater than the rate of customs duty applicable to the good under the Party's Schedule to Annex 2-B (Tariff Elimination) before the new tariff line was created.
Section C. Non-Tariff Measures
Article 2.5. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, a Party may not adopt or maintain a prohibition or restriction on the importation of a good of the other Party or on the exportation or sale for export of a good destined for the territory of the other Party, except in accordance with Article XI of the GATT 1994, and to this end Article XI of the GATT 1994 is incorporated into and made a part of this Agreement.
2. The rights and obligations of the GATT 1994 incorporated by paragraph 1 prohibit:
(a) an export price requirement in a circumstance in which another form of restriction is prohibited; and
(b) an import price requirement, except as permitted in enforcement of countervailing and antidumping orders and undertakings.
3. If a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, this Agreement does not prevent the Party from:
(a) limiting or prohibiting the importation from the territory of the other Party a good of that non-Party; or
(b) requiring as a condition of export of a good of the Party to the territory of the other Party that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
4. If a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, at the request of the other Party, the Parties shall discuss with a view to avoiding undue interference with or distortion of pricing, marketing or distribution arrangements in the other Party.
5. This Article does not apply to a measure set out in Annex 2-A (Exceptions to Articles 2.3 and 2.5).
Article 2.6. Customs User Fees and Similar Charges
1. A Party shall not adopt or maintain a fee or charge imposed on or in connection with importation of a good of the other Party, except in accordance with Article VIII of the GATT 1994, and to this end Article VIII of the GATT 1994 is incorporated into and made part of this Agreement.
2. Paragraph 1 does not prevent a Party from imposing a customs duty or a charge set out in paragraphs (a), (b), or (d) of the definition of "customs duty" in Article 1.5 (Definitions of General Application).
Article 2.7. Balance-of Payments Exception
1. The Parties shall endeavour to avoid the imposition of restrictive measures for balance-of-payments purposes.
2. A Party in serious balance-of-payments difficulties, or under imminent threat thereof, may, in accordance with the conditions established under the GATT 1994, the Understanding on the Balance-of-Payments Provisions of the GATT 1994 and the Declaration on Trade Measures Taken for Balance of Payments Purposes, adopt a trade restrictive measure, which shall be of limited duration and non-discriminatory and shall not go beyond what is necessary to remedy the balance-of-payments situation.
3. Before adopting a measure pursuant to paragraph 2, the Party shall notify the other Party.
4. The Party adopting the measure shall immediately consult the other Party and shall make every effort to hold such consultations before adopting the measure.
5. A measure under this Article shall not impair the relative benefits accorded to the other Party under this Agreement.
6. For greater certainty, the balance-of-payments exception contained in this Article applies only to balance-of-payments measures imposed on trade in goods.
Article 2.8. Customs Valuation
The Customs Valuation Agreement governs the customs valuation rules applied by the Parties to their reciprocal trade. A Party shall not make use, in its reciprocal trade, of the options and reservations permitted under Article 20 and paragraphs 2, 3 and 4 of Annex III of the Customs Valuation Agreement.
Article 2.9. Customs Duties on Exports
For greater certainty, each Party may apply export duties, in accordance with their rights and obligations under the WTO.
Article 2.10. Agriculture Export Subsides
A Party shall not adopt or maintain an export subsidy on an agricultural good that is exported, or incorporated in a product that is exported, to the territory of the other Party after the other Party has, immediately or after the transitional period, fully eliminated the tariff, on that agricultural good in accordance with Annex 2-B (Tariff Elimination).
Article 2.11. Special Safeguard on Agricultural Goods
A Party may not apply duties under Article V of the Agreement on Agriculture on goods of the other Party that are subject to tariff elimination under Annex 2-B (Tariff Elimination), including its tariff schedule.
Article 2.12. Distilled Spirits
A Party may not adopt or maintain a measure requiring that distilled spirits imported from the territory of the other Party for bottling be blended with distilled spirits of the Party.