Canada extends Ukraine tariff-free order, tightens access to sheltered farm sectors

By Rod Nickel and Steve Scherer

WINNIPEG, Manitoba (Reuters) -Canada on Friday extended Ukraine’s tariff-free access for most goods, but tightened access for eggs, poultry and dairy, sectors that are protected under a supply-management system.

Finance Minister Chrystia Freeland said tariff relief for Ukrainian goods such as steel – a temporary measure started a year ago – would continue for another year to help support Kyiv as it defends itself against Russia. That measure applied to goods not already covered by the countries’ free trade agreement.

The additional trade access was due to expire on Friday and the government’s decision on whether to extend it further was a test of Canada’s staunch backing of Ukraine.

Canadian poultry and egg farmers and processors had complained that Ukraine’s access made it harder to control imports and also raised concerns about the safety of Ukrainian food due to infrastructure damage.

Before the full-scale war, Ukraine was the sixth-largest chicken meat exporter, according to the U.S. Department of Agriculture.

There’s little evidence though that Ukraine has shipped much of such farm products. During the first five months of the expanded trade access last year, finance officials recorded only one C$6,000 ice cream shipment from Ukraine, they told a committee of legislators.

Canadian farmers produce eggs, poultry and dairy under a system that limits production and exposes them to only minimal import competition under quotas. Freeland said that Canada would allow Ukraine to continue shipping those products tariff-free within World Trade Organization quotas, but would reimpose duties on shipments above those quotas.

Ihor Michalchyshyn, CEO of the diaspora group Ukrainian Canadian Congress, had urged the government to continue Ukraine’s full duty-free access to support its farm industry, particularly after a recent dam collapse.

“While we welcome the extension of the tariff waiver on some Ukrainian goods, we are disappointed that Canada excluded some key agricultural industries,” he said in an email.

(Reporting by Rod Nickel in Winnipeg, Manitoba and Steve Scherer in Ottawa; Editing by Chizu Nomiyama and Marguerita Choy)