Text of the 2017 Canada–Ukraine Free Trade Agreement – Chapter 2: National treatment and market access
The 2017 CUFTA will remain in force until entry into force of the 2023 modernized agreement.
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;
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 progressively eliminate 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 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 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 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 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 1.6 (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.
Article 2.11: Special Safeguard on Agricultural Goods
A Party may not apply duties under Article V of the WTO Agreement on Agriculture on goods of the other Party that are subject to tariff elimination under Annex 2-B, 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.
Section D – Institutional Provisions
Article 2.13: Committee on Trade in Goods and Rules of Origin
1. The Parties hereby establish a Committee on Trade in Goods and Rules of Origin, composed of government representatives of each Party.
2. The Committee shall meet at the request of a Party or the Joint Commission to consider any matter arising under this Chapter, Chapter 3 (Rules of Origin and Origin Procedures), Chapter 4 (Trade Facilitation) or Chapter 5 (Emergency Action) but not less than once every two years from the date of entry into force of this Agreement, unless otherwise decided by the Parties.
3. The Committee’s functions shall include:
- (a) promoting trade in goods between the Parties, including through discussions on accelerating tariff elimination under this Agreement and other issues as appropriate;
- (b) promptly addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, referring those matters to the Joint Commission for its consideration;
- (c) recommending to the Joint Commission a modification of or addition to this Chapter, Chapter 3 (Rules of Origin and Origin Procedures), Chapter 4 (Trade Facilitation), Chapter 5 (Emergency Action), or any other provision of this Agreement related to the Harmonized System; and
- (d) considering any other matter referred to it by a Party relating to the implementation and administration by the Parties of this Chapter, Chapter 3 (Rules of Origin and Origin Procedures), Chapter 4 (Trade Facilitation) or Chapter 5 (Emergency Action).
4. The Parties hereby establish a Sub-Committee on Agriculture that shall:
- (a) except as otherwise provided in this Chapter, meet within 60 days of a request by a Party;
- (b) provide a forum for the Parties to discuss issues resulting from the implementation of this Agreement for agricultural goods;
- (c) refer to the Committee any matter under sub-paragraph (b) on which it has been unable to reach an understanding; and
- (d) report to the Committee for its consideration an understanding under this paragraph.
5. At the request of a Party, the Parties shall convene a meeting of their officials responsible for customs, immigration, inspection of food and agricultural products, border inspection facilities, or regulation of transportation, as appropriate, for the purpose of addressing issues related to movement of goods through the Parties’ ports of entry.
Annex 2-A: Exceptions to Articles 2.3 and 2.5
Canadian Measures
Articles 2.3 and 2.5 do not apply to:
- (a) a measure, including that measure’s continuation, prompt renewal or amendment, in respect of the following:
- (i)the export of logs of all species;
- (ii)the export of unprocessed fish pursuant to applicable provincial legislation;
- (iii)the importation of a goods of the prohibited provisions of tariff items 9897.00.00, 9898.00.00 and 9899.00.00 referred to in the Schedule of the Customs Tariff;
- (iv)Canadian excise duties on absolute alcohol used in manufacturing under the provisions of the Excise Act, 2001, S.C. 2002, c. 22, as amended;
- (v)the use of ships in the coasting trade of Canada;
- (vi)the internal sale and distribution of wine and distilled spirits; or
- (b) an action by Canada authorized by the Dispute Settlement Body of the WTO in a dispute between the Parties under the WTO Agreement.
Annex 2-B: Tariff Elimination
1. As provided in each Party’s Schedule attached to this Annex, the following staging categories apply to the elimination or reduction of customs duties by each Party pursuant to Article 2.4(2):
- (a) duties on originating goods shall be eliminated entirely and these goods shall be duty-free on the date this Agreement enters into force and each subsequent year, as follows:
- (i) for Ukraine, for goods provided for in the items in staging category 0 in the Schedule of Ukraine, and
- (ii) for Canada, for goods of Chapters 1 through 97 of the Harmonised System that provide for an MFN rate of customs duty and that are not listed in the Schedule of Canada;
- (b) duties on originating goods provided for in the items in staging category 1 in a Party’s Schedule shall be eliminated in two equal stages beginning on the date this Agreement enters into force, and these goods shall be duty-free, effective January 1 of year two. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: one-half of the base rate
- (ii) year two and each subsequent year: duty-free
- (c) duties on originating goods provided for in the items in staging category 3 in a Party’s Schedule shall be eliminated in four equal stages beginning on the date this Agreement enters into force, and these goods shall be duty-free, effective January 1 of year four. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: three-quarters of the base rate
- (ii) year two: one-half of the base rate
- (iii) year three: one-quarter of the base rate
- (iv) year four and each subsequent year: duty-free
- (d) duties on originating goods provided for in the items in staging category 5 in a Party’s Schedule shall be eliminated in six equal stages beginning on the date this Agreement enters into force, and these goods shall be duty-free, effective January 1 of year six. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: five-sixths of the base rate
- (ii) year two: two-thirds of the base rate
- (iii) year three: one-half of the base rate
- (iv) year four: one-third of the base rate
- (v) year five: one-sixth of the base rate
- (vi) year six and each subsequent year: duty-free
- (e) duties on originating goods provided for in the items in staging category 7 in a Party’s Schedule shall be eliminated in eight equal stages beginning on the date this Agreement enters into force, and these goods shall be duty-free, effective January 1 of year eight. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: seven-eighths of the base rate
- (ii) year two: three-quarters of the base rate
- (iii) year three: five-eighths of the base rate
- (iv) year four: one-half of the base rate
- (v) year five: three-eighths of the base rate
- (vi) year six: one-quarter of the base rate
- (vii) year seven: one-eighth of the base rate
- (viii) year eight and each subsequent year: duty-free
- (f) duties on originating goods provided for in the items in staging category 5A in a Party’s Schedule shall be reduced by one-fifth (twenty per cent) of the base-rate in six equal stages beginning on the date this Agreement enters into force, and the rate of customs duty applicable to these goods shall be four-fifths of the base rate, effective January 1 of year six. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: twenty-nine-thirtieths of the base rate
- (ii) year two: fourteen-fifteenths of the base rate
- (iii) year three: nine-tenths of the base rate
- (iv) year four: thirteen-fifteenths of the base rate
- (v) year five: five-sixths of the base rate
- (vi) year six and each subsequent year: four-fifths of the base rate
- (g) duties on originating goods provided for in the items in staging category 5B in a Party’s Schedule shall be reduced by three-tenths (thirty per cent) of the base-rate in six equal stages beginning on the date this Agreement enters into force, and the rate of customs duty applicable to these goods shall be seven-tenths of the base rate, effective January 1 of year six. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: nineteen-twentieths of the base rate
- (ii) year two: nine-tenths of the base rate
- (iii) year three: seventeen-twentieths of the base rate
- (iv) year four: four-fifths of the base rate
- (v) year five: three-quarters of the base rate
- (vi) year six and each subsequent year: seven-tenths of the base rate
- (h) duties on originating goods provided for in the items in staging category 5C in a Party’s Schedule shall be reduced by one-half (fifty per cent) of the base-rate in six equal stages beginning on the date this Agreement enters into force, and the rate of customs duty applicable to these goods shall be one-half of the base rate, effective January 1 of year six. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: eleven-twelfths of the base rate
- (ii) year two: five-sixths of the base rate
- (iii) year three: three-quarters of the base rate
- (iv) year four: two-thirds of the base rate
- (v) year five: seven-twelfths of the base rate
- (vi) year six and each subsequent year: one-half of the base rate
- (i) duties on originating goods provided for in the items in staging category 7A in a Party’s Schedule shall be reduced by one-fifth (twenty per cent) of the base-rate in eight equal stages beginning on the date this Agreement enters into force, and the rate of customs duty applicable to these goods shall be four-fifths of the base rate, effective January 1 of year eight. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: thirty nine-fortieths of the base rate
- (ii) year two: nineteen-twentieths of the base rate
- (iii) year three: thirty seven-fortieths of the base rate
- (iv) year four: nine-tenths of the base rate
- (v) year five: seven-eighths of the base rate
- (vi) year six: seventeen-twentieths of the base rate
- (vii) year seven: thirty three-fortieths of the base rate
- (viii) year eight and each subsequent year: four-fifths of the base rate
- (j) duties on originating goods provided for in the items in staging category 7B in a Party’s Schedule shall be reduced by one-half (fifty per cent) of the base-rate in eight equal stages beginning on the date this Agreement enters into force, and the rate of customs duty applicable to these goods shall be one-half of the base rate, effective January 1 of year eight. For greater certainty, the rate of customs duty as a fraction of the base rate indicated in each Party’s Schedule shall be as follows:
- (i) year one: fifteen-sixteenths of the base rate
- (ii) year two: seven-eighths of the base rate
- (iii) year three: thirteen-sixteenths of the base rate
- (iv) year four: three-quarters of the base rate
- (v) year five: eleven-sixteenths of the base rate
- (vi) year six: five-eighths of the base rate
- (vii) year seven: nine-sixteenths of the base rate
- (viii) year eight and each subsequent year: one-half of the base rate
- (k) goods provided for in the items in staging category E in a Party’s Schedule are excluded from obligations regarding customs duties.
2. Tariff rate quota for pork:
- (a) Originating goods in the following aggregate quantities and provided for in items listed with the notation “TRQ Pork” in the Schedule of Ukraine shall be duty-free in the years specified below:
Year | Annual Aggregate Quantity (Metric Tonnes, net weight) |
---|---|
1 | 10,000 MT |
2 | 11,429 MT |
3 | 12,857 MT |
4 | 14,286 MT |
5 | 15,714 MT |
6 | 17,143 MT |
7 | 18,571 MT |
8 and each subsequent year | 20,000 MT |
- (b) Duties on originating goods entered in aggregate quantities in excess of the aggregate quantities in subparagraph (a) shall be subject to a rate of customs duty no higher than the base rate of duty specified for that item in the Schedule of Ukraine.
- (c) Ukraine shall administer this tariff rate quota pursuant to paragraph 3.
- (d) Following entry into force of this Agreement, should Ukraine accord to another country more favourable treatment on the tariff items listed in subparagraph (e), at the request of a Party, the Parties shall hold consultations to discuss providing to Canada the treatment accorded to those goods of the other country.
- (e) Subparagraphs (a), (b), (c) and (d) shall apply to the following items:
0203.21.10.00, 0203.21.90.00, 0203.22.11.00, 0203.22.19.00, 0203.22.90.00, 0203.29.11.00, 0203.29.13.00, 0203.29.15.00, 0203.29.55.00, 0203.29.59.00, 0203.29.90.00, 0206.41.00.00, 0206.49.00.00 0209.10.11.00.
3. Administration and implementation of the tariff rate quota:
- (a) Ukraine shall implement and administer its TRQ established under this Annex in accordance with this Agreement, Articles I and XIII of the GATT 1994, and the WTO Agreement on Import Licensing Procedures.
- (b) Ukraine shall ensure that:
- (i) its procedures for administering its TRQ are transparent, made available to the public, administered in a timely manner, non-discriminatory, responsive to market conditions, and no more administratively burdensome than necessary;
- (ii) any person of a Party that fulfills Ukraine’s legal and administrative requirements shall be eligible to utilize Ukraine’s TRQ;
- (iii) the TRQ is administered exclusively by its national government, and that this administration is not delegated to another person; and,
- (iv) every effort is made to administer its TRQ in a manner that facilitates trade and allows importers to fully utilize it;
- (c) In year one, the applicable annual quantities shall be made available starting on the date this Agreement enters into force until December 31 of the year this Agreement enters into force. From year two and in each subsequent year, the applicable annual quantities shall be made available from January 1 until December 31 of each calendar year.
- (d) All TRQ quantities shall enter Ukraine on a first-come, first-served basis.
- (e) During the course of each year, the administering authority of Ukraine shall publish, in a timely and ongoing fashion on its designated publicly available internet site, administration procedures, utilisation rates, and remaining available quantities for the TRQ established under this Agreement.
- (f) When the actual annual quantities imported under the TRQ reach the annual aggregate quantities of a tariff rate quota in a given year, Ukraine shall publish a notice to this effect on its designated publicly available website within 10 days.
- (g) Canada shall notify Ukraine if any Canadian-issued documentation requirements are established for products exported from Canada under a tariff rate quota pursuant to this Agreement.
- (h) If Ukraine receives notification as pursuant to subparagraph (g), Ukraine shall allow only those products accompanied by that documentation to enter under the applicable TRQ.
- (i) Upon entry into force of this Agreement, each Party shall designate a contact point to facilitate communication on TRQ-related matters and provide the contact point information to the other Party.
- (j) Ukraine shall not condition application for or use of an in-quota quantity under a TRQ on the re-export of an agricultural good or any specified end use.
- (k)Ukraine shall not count non-commercial shipments toward the in-quota aggregate quantity under a TRQ.
- (l) Upon the written request of a Party, the Parties shall, within 30 days, convene a meeting of the Sub-Committee on Agriculture to discuss the administration of a TRQ established under this Agreement in order to arrive at a mutually satisfactory resolution.
4. For the purposes of this Annex and each Party’s Schedule:
- (a) the tariff reduction for year one shall take effect on the date of entry into force of this Agreement as provided for in Article 19.5 (Entry into Force). Beginning in year two, each annual stage of tariff reduction shall take effect on January 1 of each year;
- (b) year one means the period of time beginning on the date of entry into force of this Agreement and ending on December 31 of the same calendar year as the date of entry into force;
- (c) year two means the 12-month period beginning January 1 of the calendar year immediately following the date this Agreement enters into force and ending on December 31 of that same calendar year;
- (d) year three means the 12-month period beginning on the second January 1 following the date of entry into force of this Agreement and ending on December 31 of that same calendar year;
- (e) year four means the 12-month period beginning on the third January 1 following the date of entry into force of this Agreement and ending on December 31 of that same calendar year;
- (f) year five means the 12-month period beginning on the fourth January 1 following the date of entry into force of this Agreement and ending on December 31 of that same calendar year;
- (g) year six means the 12-month period beginning on the fifth January 1 following the date of entry into force of this Agreement and ending on December 31 of that same calendar year;
- (h) year seven means the 12-month period beginning on the sixth January 1 following the date of entry into force of this Agreement and ending on December 31 of that same calendar year; and
- (i) year eight means the 12-month period beginning on the seventh January 1 following the date of entry into force of this Agreement and ending on December 31 of that same calendar year.
5. For Canada, the base rate for determining the interim staged rate of customs duty for an item shall be the MFN rate of customs duty applied on January 1, 2010. For Ukraine, the base rate for determining the interim staged rate of customs duty shall be the MFN rate of customs duty applied on January 1, 2011.
6. For the purpose of the elimination of customs duties in accordance with Article 2.4, interim staged rates of customs duty shall be rounded down at least to the nearest tenth of a percentage point or, if the customs rate of duty is expressed in monetary units, at least to the nearest 0.001 of the official monetary unit of the Party.
7. For the purpose of this Agreement:
- (a) Canada’s Schedule is authentic in the English and French languages; and
- (b) (PDF, 6.08 MB).
- Date modified: