Text of the Canada–Ukraine Free trade agreement – 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;

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:

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:

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:

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:

4. The Parties hereby establish a Sub-Committee on Agriculture that shall:

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:

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):

2. Tariff rate quota for pork:

YearAnnual Aggregate Quantity (Metric Tonnes, net weight)
110,000 MT
211,429 MT
312,857 MT
414,286 MT
515,714 MT
617,143 MT
718,571 MT
8 and each subsequent year20,000 MT

3. Administration and implementation of the tariff rate quota:

4. For the purposes of this Annex and each Party’s Schedule:

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:

Date Modified: