02/07/20 UCPBA Ottawa. June 10, 2017. 1 02/07/20 UCPBA Ottawa. June 10, 2017. 2 Canada-Ukraine Free Trade Agreement Forum. Hosted by Ukrainian Canadian
Professional and Business Association of Ottawa 02/07/20 UCPBA Ottawa. June 10, 2017. 3 Introduction 02/07/20
This is a one day forum to discuss various aspects of the Canada Ukraine Trade Agreement. Todays presenters: UCPBA Ottawa. June 10, 2017. 4 Michael Kostiuk Bio Graduate of Ukrainian Language and Cultural Course. International School of Ukrainian Studies. Kyiv, Ukraine. JulyAugust, 1991 Bachelor of Arts Slavic Studies. University of Ottawa. 1994. Bachelor of Arts, Honours Geography. University of Ottawa. 1996. Master of Arts Geography. Carleton University. 2001.
Diploma in International Trade. FITT 2002. Bachelor of Education. University of Ottawa, 2006 02/07/20 UCPBA Ottawa. June 10, 2017. 5 Michael Kostiuk Bio CITP. Certified International Trade Consultant. Internet Project in Ukraine in co-operation with the Canadian Society for International Health and the United Nations Internet Project for Ukraine. Designed and managed a project to purchase computer equipment and modems for 7 Health and Medical organizations in Kyiv, Lviv and Odessa. Also wrote a training manual that was translated into Ukrainian. The Health Staff was also trained to use the Internet for research and communication
purposes. January to March 1995. Presentation and Workshop on Recent Developments on the Use of the Internet in Post Soviet Ukraine. (1996). Washington Group Leadership Conference. Key Bridge Marriott, Arlington, Virginia. Election Observation mission sin Ukraine in 2004, 2010, 2012, 2014. Dnipropetrovsk, Mykolayiv, & Berehova, Transcarpattya region of Ukraine . 02/07/20 UCPBA Ottawa. June 10, 2017. 6 Ron Sorobey Bio. Born in 1951 in Winnipeg. Studied at the University of Manitoba in the Faculty of
Political Science and received a BA Honours and MA. Came to Ottawa in 1975. Worked for the Department of Customs and Excise (later named the Canada Border Services Agency) from May 1975 to September 2010. Ron specified in tariff classification, international customs cooperation, special import measures, and customs related litigation. 02/07/20 UCPBA Ottawa. June 10, 2017. 7 Ron Sorobey Bio.
In December 2014 and February 2010 was an election observer to the Ukrainian Presidential Elections. He is an active member of the UkrainianCanadian Community in Ottawa. He has been to the UCPBA of Ottawa Executive since 1986 and has held the positions of President, Vice-President, Secretary and Board Member. Ron is currently the Treasurer. Ron is currently the Community Producer of the Ukrainian Profile Television Program. 02/07/20 UCPBA Ottawa. June 10, 2017. 8
Dr. Michael Mackay Bio Former lecturer in politics at the National University of Kyiv-Mohyla Academy, and the director of an Internet access project for the university. The UCPBA Ottawa gave a grant to support my project in 1994. Returned to Ukraine as an election observer: a short-term one in 2004 and 2010, and a long-term one in 2014. Attended Carleton University, the University of Toronto, and the London School of Economics and Political Science, and holds a Doctorate in political philosophy. 02/07/20 UCPBA Ottawa. June 10, 2017.
9 Dr. Michael Mackay Bio 02/07/20 Currently works as a consultant and instructor for an Ottawa-based IT company that was recently purchased by Avnet, a US-based Fortune 500 company. For work, he travels extensively in Canada and the US. UCPBA Ottawa. June 10, 2017.
10 Topics of Discussion Morning: Session 1. Overview of Canada Ukraine Free Trade Agreement. Chair: Michael Kostiuk Session 2. Financing International Trade. Chair Ron 02/07/20 UCPBA Ottawa. June 10, 2017. 11
Afternoon Afternoon session 1. Industry Cooperation and Partnering in International Trade . This Roundtable will highlight key areas where Canadian and Ukrainian Business can cooperate to increase trade and engage in joint Ventures. Chair: Michael Kostiuk Afternoon Session 2. Tourism, The forgotten element of Trade. This last session will involve a round table discussion on the importance of tourism in regard to International Trade. Chair: Michael Kostiuk 02/07/20 UCPBA Ottawa. June 10, 2017. 12
Afternoon 02/07/20 Afternoon Session 3. Is Ukraine ready for Trade with Canada? Dr Michael Mackay, formerly a professor at the Kyiv Mohyla Academy, will lead and round table discussion on the different political and Business climate in Ukraine today as compared with the 1990s. UCPBA Ottawa. June 10, 2017. 13
Morning Session 1. Canada-Ukraine Free Trade Agreement 02/07/20 The Canada-Ukraine Free Trade Agreement (CUFTA) signed on July 11, 2016, represents an important milestone in the CanadaUkraine bilateral relationship. UCPBA Ottawa. June 10, 2017.
14 In addition to generating commercial benefits for Canadian businesses, CUFTA will support the economic reform and development efforts of the Government of Ukraine, strengthen the CanadaUkraine partnership for peace and prosperity, and help pave the way for long-term security, stability, and broad-based economic development in Ukraine. 02/07/20 UCPBA Ottawa. June 10, 2017. 15
Although there was an upsurge in trade and investment in the early 1990s following Ukraines independence, there remains potential for further growth in bilateral trade and investment between Canada and Ukraine. From 2011 to 2015, bilateral merchandise trade between Canada and Ukraine averaged $288.9 million annually, with Canadas merchandise exports to Ukraine comprising $172.9 million, and Canadas merchandise imports from Ukraine representing $116 million. 02/07/20 UCPBA Ottawa. June 10, 2017. 16
CUFTA will create new opportunities for Canadian and Ukrainian companies, thereby strengthening the bilateral commercial relationship.e. 02/07/20 UCPBA Ottawa. June 10, 2017. 17 Since the election of Ukraines new government under the presidency of Petro Poroshenko on May 25, 2014, the Government of Ukraine has begun the necessary reforms to
stimulate economic growth, including taking steps to address corruption and introducing measures to create a more positive business environment. 02/07/20 UCPBA Ottawa. June 10, 2017. 18 While this campaign is gaining momentum, it is only the beginning of a long and challenging process. In the
meantime, Canada continues to reaffirm its strong support for Ukraines new government as it implements the reforms needed to restore stability and prosperity. 02/07/20 UCPBA Ottawa. June 10, 2017. 19 Canada and Ukraine launched free trade agreement (FTA) negotiations in 2010. Six rounds of negotiations
were held between 2010 and 2015. Negotiations concluded in Kyiv in July, 2015. 02/07/20 UCPBA Ottawa. June 10, 2017. 20 02/07/20 Ukraine is a promising emerging market for Canadian exporters, with opportunities in agriculture
and processed food (including fish and seafood products), and industrial goods, such as articles of iron and steel, industrial machinery, plastics and UCPBA Ottawa. June 10, 2017. 21 CUFTA will enable Canadian companies to take greater advantage of these opportunities by ensuring new market access and more
predictable conditions. 02/07/20 UCPBA Ottawa. June 10, 2017. 22 Two-way merchandise trade between Canada and Ukraine (value in millions of Canadian dollars) 02/07/20 UCPBA Ottawa. June 10, 2017.
23 CUFTA includes chapters in the areas of market access for goods; rules of origin and origin procedures; trade facilitation; emergency action and trade remedies; sanitary and phytosanitary measures; technical barriers to trade; government procurement; competition policy, monopolies and state enterprises; intellectual property; 02/07/20
UCPBA Ottawa. June 10, 2017. 24 Anticipated Effects of the CUFTA in the area of Trade in Goods The CUFTA is expected to establish commercially significant improvements in market access for goods, principally through tariff elimination. The largest trade gains are expected in sectors where Canadian merchandise exports currently face significant tariff barriers. The CUFTA is expected to bolster Canadas current exports to Ukraine, particularly with respect to agricultural products, fish and seafood, and industrial products such as machinery and vehicles. Nevertheless, Canadas current exports to Ukraine are modest relative to its
global exports, and this would continue to be the case even if considerable export growth resulted from the CUFTA. 02/07/20 UCPBA Ottawa. June 10, 2017. 25 Beyond tariff elimination, the CUFTA includes provisions to facilitate increased cooperation with Ukraine to make trade more efficient, including through trade facilitating measures and customs procedures designed to provide certainty, transparency and effective origin verification procedures. It also includes rules of origin that are transparent,
predictable and consistent in application, which will ensure that the benefits negotiated under the Agreement accrue to the Parties. Taken together, these measures contribute to further increasing bilateral trade between Canada and Ukraine. 02/07/20 UCPBA Ottawa. June 10, 2017. 26 Economic analysis undertaken by the Department projects that once fully implemented, the CUFTA will result in an increase of 19 percent ($64.9 million) in bilateral merchandise trade between the two countries,
with Canadian exports to Ukraine increasing by $41.2 million. Expressed in in GDP terms, the CUFTA is projected to result in a very modest GDP gain of 0.0015 percent ($29.2 million) for Canada, and 0.0127 percent ($18.6 million) for Ukraine 02/07/20 UCPBA Ottawa. June 10, 2017. 27 Canadian Merchandise Exports to Ukraine Canadas annual merchandise exports to Ukraine averaged $214.1 million from 2011 to 2013, before
declining by over 3.8 percent in 2014 to $205.1 million, making Ukraine Canadas 22nd-largest export destination that year. As such, Canadian exports to Ukraine represented less than one percent of total Canadian global exports in 2014. Even if Canadian exports to Ukraine were to undergo considerable growth in the years following the implementation of the CUFTA, this would have only a very modest effect on Canadas overall trade and production levels. 02/07/20 UCPBA Ottawa. June 10, 2017. 28
Canadas non-agricultural exports to Ukraine totalled $186.6 million in 2014, and included mineral fuels and oils (mainly coal), fish and seafood, pharmaceuticals and machinery. Canadian agricultural and agri-food exports to Ukraine totalled $19.2 million in 2014, and included meat, other animal products, animal fodder and oilseeds. 02/07/20 UCPBA Ottawa. June 10, 2017. 29
in 2014, Ukraine had an average overall applied most favoured nation (MFN) tariff rate of 4.5 percent, an average applied MFN nonagricultural tariff of 3.8 percent, and an average applied MFN agricultural tariff of 9.2 percent. Upon entry into force of the Agreement, Ukraine will immediately eliminate tariffs on 86 percent of Canadas current exports, with the balance to be phased out or subject to tariff reductions over periods of up to seven years. 02/07/20 UCPBA Ottawa. June 10, 2017. 30
This includes elimination by Ukraine of tariffs on all Canadian exports of industrial products, fish and seafood, and the elimination of the vast majority of its agricultural tariffs. Key Canadian exports benefiting from either immediate or eventual duty-free access include beef, canola oil, processed foods, animal feed, frozen fish, caviar, certain iron and steel products, articles of plastics, and cosmetics. Tariffs will also be eliminated by Ukraine on fresh and chilled pork, and frozen pork will benefit from a duty-free tariff rate quota. 02/07/20
UCPBA Ottawa. June 10, 2017. 31 Canadian Merchandise Imports from Ukraine 02/07/20 Ukraine is a relatively small supplier of Canadian imports from the world, representing the 99th-largest source of merchandise imports for Canada in
2014, and accounting for less than one percent of Canadas global imports. Canadas current imports from Ukraine totalled $99 million in 2014, down from an annual average of $133.2 million from 2011 to 2013. UCPBA Ottawa. June 10, 2017. 32 Upon entry into force of the Agreement, Canada will immediately eliminate tariffs on 99.9 percent of current imports from Ukraine. This includes elimination by Canada of tariffs on all industrial products, fish and seafood, and 99.9 percent of agricultural imports from Ukraine.
Key products from Ukraine that will benefit from this duty-free access include sunflower oil, sugar and chocolate confectionery, baked goods, vodka, apparel, ceramics, iron and steel, and minerals. 02/07/20 UCPBA Ottawa. June 10, 2017. 33 Given that goods entering into the Canadian market from Ukraine already benefit from relatively low Canadian tariffs, the resulting increase in imports is expected to be
relatively modest result. For the full text of the agreement go to http://www.international.gc.ca/trade-commer ce/trade-agreements-accords-commerciaux/a gr-acc/ukraine/text-texte/toc-tdm.aspx?lang= eng 02/07/20 UCPBA Ottawa. June 10, 2017. 34 Discussion 02/07/20
UCPBA Ottawa. June 10, 2017. 35 Morning Session 2. Export Development Canada 02/07/20
It is Canadas export credit agency and was founded in 1944. It supports and develops Canadas export trade by helping Canadian companies respond to international business opportunities. It is a self-financing, Crown corporation that operates at arm's length from the Government. UCPBA Ottawa. June 10, 2017. 36 Since its creation the EDC has facilitated more than $1.3 trillion in exports and foreign investment by Canadian companies. In 2014 it helped more than 7,400 Canadian
companies do business in 187 countries. The majority of these companies were small business, and more than 30 per cent of this business was conducted in fastgrowing emerging markets. The EDC provides insurance and financial services, bonding products and small business solutions to Canadian exporters and investors and their international buyers. 02/07/20 UCPBA Ottawa. June 10, 2017. 37 It also supports Canadian direct investment abroad and investment into
Canada. Much of EDC business is done in partnership with other financial institutions and through collaboration with the Government of Canada The EDC is financially self-sufficient and operates like a commercial institution. 02/07/20 UCPBA Ottawa. June 10, 2017. 38
Collects interest on our loans and premiums on our insurance products. Its treasury department that sells bonds and raises money in global capital markets 02/07/20 UCPBA Ottawa. June 10, 2017. 39 Solutions and Products Get a client started in exporting by building an export strategy: Provides practical advice and support Finds international customers
Gets financing Make sure the client gets paid Post bonds and guarantees Avoid losses from political risks 02/07/20 UCPBA Ottawa. June 10, 2017. 40 Information on multinational and bilateral trade agreements Trading and commercial laws and practices in specific countries (tariffs, duties, taxes, import requirements).
02/07/20 UCPBA Ottawa. June 10, 2017. 41 It finds solutions for: Credit Insurance Accounts Receivable Insurance Trade Protect Working Capital Financing Buyer Financing Account Performance Security Guarantee Surety Bond Insurance Political Risk Insurance
Companies with EDC Financing 02/07/20 UCPBA Ottawa. June 10, 2017. 42 Its knowledge centre provides access to vast practical information for exporting including country profiles. Ukraine: Through EDC representation in London, United Kingdom, it provides regional support to Canadian companies planning on or currently doing business in Ukraine. EDC market experts have developed strategic relationships with major buyers in several sectors as well as a network of local contacts in the market.
Targeted Key Industries: Agriculture, Power and Construction & Infrastructure 02/07/20 UCPBA Ottawa. June 10, 2017. 43 Contact Information: http://www.edc.ca/ Head Office: Export Development Canada 150 Slater Street Ottawa, ON K1A 1K3
1-800-229-0575 02/07/20 UCPBA Ottawa. June 10, 2017. 44 Harmonized System of Tariff Classification
02/07/20 The Harmonized System of Tariff Classification or simply the HS is a system of classifying goods for the process of assessing tariffs and duties, and determining international trade patterns. Vertically all countries utilize the HS. It was created by the World Customs Organization in Brussels and came into operation in the late 1980s. It consists of 21 Sections (97 Chapters) as follows UCPBA Ottawa. June 10, 2017. 45
Live Animals; Animal Products Vegetable Products Animal or Vegetable Fats and Oils and their Cleavage Products; Prepared Edible Fats; Animal or Vegetable Waxes Prepared Foodstuffs; Beverages, Spirits and Vinegar; Tobacco and Manufactured Tobacco Substitutes Mineral Products 02/07/20 UCPBA Ottawa. June 10, 2017. 46 Products of the Chemical or Allied Industries
Plastics and Articles Thereof; Rubber and Articles Thereof Raw Hides and Skins, Leather, Furskins and Articles Thereof; Saddlery and Harness; Travel Goods, Handbags and Similar Containers; Articles of Animal Gut (Other than Silk-worm Gut) Wood and Articles of Wood; Wood Charcoal; Cork and Articles of Cork; Manufactures of Straw, of Esparto or of Other Plaiting Materials; Basketware and Wickerwork 02/07/20 UCPBA Ottawa. June 10, 2017. 47
Pulp of Wood or of Other Fibrous Cellulosic Material; Recovered (Waste and Scrap) Paper or Paperboard; Paper and Paperboard and Articles Thereof Textiles and Textile Articles Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking-sticks, Seat-sticks, Whips, Riding-crops and Parts Thereof; Prepared Feathers and Articles Made Therewith; Artificial Flowers; Articles of Human Hair 02/07/20 UCPBA Ottawa. June 10, 2017.
48 Articles of Stone, Plaster, Cement, Asbestos, Mica or Similar Materials; Ceramic Products; Glass and Glassware Natural or Cultured Pearls, Precious or Semiprecious Stones, Precious Metals, Metals Clad with Precious Metal and Articles Thereof; Imitation Jewellery; Coin Base Metals and Articles of Base Metal 02/07/20 UCPBA Ottawa. June 10, 2017. 49
Machinery and Mechanical Appliances; Electrical Equipment; Parts Thereof; Sound Recorders and Reproducers, Television Image and Sound Recorders and Reproducers, and Parts and Accessories of Such Articles Vehicles, Aircraft, Vessels and Associated Transport Equipment Optical, Photographic, Cinematographic, Measuring, Checking, Precision, Medical or Surgical Instruments and Apparatus; Clocks and Watches; Musical Instruments; Parts and Accessories Thereof 02/07/20 UCPBA Ottawa. June 10, 2017.
50 Arms and Ammunition; Parts and Accessories Thereof Miscellaneous Manufactured Articles Works of Art, Collectors' Pieces and Antiques 02/07/20 UCPBA Ottawa. June 10, 2017. 51 At the international level each item is broken by six digits:
The first and second digits denote the Chapter The third and fourth digits denote the heading The fifth and sixth digits denote the subheading Example: classification of a microphone. 02/07/20 UCPBA Ottawa. June 10, 2017. 52 Since it is an electrical product it would be classified in Chapter 85 Microphones are named in heading 85.15
More specifically they are further named in subheading 8515.10 At the six-digit level both and Canada and Ukraine would classify microphones in ns subheading 8515.10 Countries are permitted to classy the goods further. For tariff classification proposes Canada classifies goods to the eight-digit level 02/07/20 UCPBA Ottawa. June 10, 2017. 53 For the Canadian Customs Tariff refer to:
http://www.cbsa-asfc.gc.ca/trade-commerce/ tariff-tarif/2017/html/tblmod-2-eng.html#s1 02/07/20 UCPBA Ottawa. June 10, 2017. 54 Discussion 02/07/20 UCPBA Ottawa. June 10, 2017. 55
Lunch Break 02/07/20 UCPBA Ottawa. June 10, 2017. 56 Afternoon Session 1: Partnering 02/07/20
6 Reasons for forming strategic global business alliances By: Daniella D'Alimonte Original article: http://www.tradeready.ca/2014/fittskillsrefresher/8-reasons-forming-strategicglobal-business-alliances/ UCPBA Ottawa. June 10, 2017. 57
Global business alliances Companies decide to form strategic global business alliances for many reasons. One of the most important reasons is to gain access to another companys knowledge or resources. Companies can also decide to join forces to develop new products or to enter a market that neither could enter alone. 02/07/20 UCPBA Ottawa. June 10, 2017. 58
Other reasons for developing strategic alliances include the following: Forming economies of scale Enhancing competitiveness Dividing risks Setting new standards for technology Entering new markets Overcoming the competition in a market Acquiring new skills and resources Often, when companies co-operate on a project, they exchange skills that are not for sale. 02/07/20
UCPBA Ottawa. June 10, 2017. 59 Typically, one partner possesses technological expertise and the ability to keep abreast of rapidly evolving technological developments. What that partner needs from the other partner or partners is capital, large distribution systems, marketing expertise, service networks and credibility in the marketplace. Each partner therefore provides the other with vital resources and uses the partnership to extend its skill set into new areas 02/07/20
UCPBA Ottawa. June 10, 2017. 60 1. Forming economies of sale Partnerships can generate economies of scale that will enable the participating companies to marshal a broad set of resources and achieve the critical mass needed for international success. Companies with complementary skills can rely on each others proven expertise instead of spending time and resources to independently develop what has already been achieved. 02/07/20
UCPBA Ottawa. June 10, 2017. 61 2. Enhancing competitiveness Many international trade projects require expertise from different fields. Traditionally, companies have tried to develop or maintain all the required skills in-house. However, as technological and administrative complexity increases, companies are learning that they cannot do everything by themselves. As a result, the most competitive corporations are adopting a strategy of maintaining their core competencies only. Gaps in the skill bases are then filled by partnering with a company that has the missing skills. This strategy avoids the need to expend resources and run
the risks associated with developing the skills in-house. 02/07/20 UCPBA Ottawa. June 10, 2017. 62 3. Dividing global business risks Risk sharing through partnering is most often seen in research and development areas. Research and development costs are always increasing and the speed of innovation means that products rapidly become outdated and the risks of investing in developing new products are high. Sharing research and development costs and facilities provides good value for money, while sharing expertise can speed
up the process. Partnering can be used to share risk in other areas as well. For example, companies can share transportation and distribution systems, which saves money and enables faster delivery of the product. Joint marketing is another way of spreading risk and increasing returns. 02/07/20 UCPBA Ottawa. June 10, 2017. 63 4. Setting new standards The development of new technologies creates entirely new market opportunities. The first company to create a new technology might set the standards for its industry
simply because it is the first. However, several competitors might develop similar technologies at about the same time. It is very difficult to predict whose technology will set the standard for the industry, so trying to be the first into the market with a new technology can be very risky. Forming alliances is one approach to establishing standards in an industry. 02/07/20 UCPBA Ottawa. June 10, 2017. 64 5. Entering new foreign markets Strategic global business
alliances are effective ways of entering new foreign markets. Partners can provide established marketing and distribution systems, as well as knowledge of the markets they serve, ensuring that products get to market faster and are more likely to be purchased. Foreign partners can advise a company on how to modify a product to meet local regulations and market preferences. They can help with such issues as translation of documentation, conversion from metric to imperial measures, conversion of power requirements and compliance with packaging regulations. 02/07/20 UCPBA Ottawa. June 10, 2017.
65 6. Overcoming competition Companies often co-operate in marketing or distribution to overcome competition. A well-conceived alliance can mean a head start in a market, possibly even preventing other competitors from entering. Forming an alliance with an established, major company can reduce the influence of other companies. However, companies should be careful that alliances do not form a cartel or otherwise breach anti-competition laws in the target market. 02/07/20
UCPBA Ottawa. June 10, 2017. 66 . This content is an excerpt from the FITTskills International Market Entry Strategies textbook. Enhance your knowledge and credibility with the leading international trade training and certification experts. FITT stands for Forum for International Trade Training. I, Michael Kostiuk am a graduate of this program and I have a Diploma in International Trade from FITT. I am a certified International Trade Practitioner (CITP). This is a internationally recognized designation.
You can get one too! I have handouts from FITT about their program, which is available across Canada and on-line. 02/07/20 UCPBA Ottawa. June 10, 2017. 67 Tourism as Part of International Trade A country gains wealth by three main methods: Export Products or Services from your country. Attract Foreign Investment to your country
Attract Tourists who spend foreign money in your country. 02/07/20 UCPBA Ottawa. June 10, 2017. 68 Economic Importance of Tourism Source: https://www.wttc.org/-/media/files/reports/benchmarkreports/ the_comparative_economic_impact_of_travel__touris m.pdf 02/07/20
UCPBA Ottawa. June 10, 2017. 69 The World Travel & Tourism Council (WTTC) has spearheaded global analysis of the economic importance of the sector for over 20 years. This research has established the contribution of Travel & Tourism on an ongoing basis to over 180 countries in absolute size, share of the economy, and growth. Around the world, WTTC research is referenced as the authoritative source of the role of Tourism in generating GDP, income, and employment. The following are findings from WTTC: 02/07/20
UCPBA Ottawa. June 10, 2017. 70 To gain perspective on the comparative advantages of Travel & Tourism, it is important to first understand its size and growth relative to other sectors. 02/07/20 UCPBA Ottawa. June 10, 2017. 71 The following industries were analysed and compared
to Travel & Tourism. They were selected as having a similar breadth and global presence as Travel & Tourism. Mining: includes the extraction of oil, natural gas, coal, and metals Education: includes all levels of educational services Chemicals manufacturing: includes drugs & medicines, plastics, rubber, paint, polishes, ink, perfumes, cosmetics, soap, cleaning materials, fertilizer, pesticides, other chemicals Automotive manufacturing: includes motor vehicles, parts & accessories 02/07/20 UCPBA Ottawa. June 10, 2017.
72 Communications: includes postal services (national and private) and telecommunications Financial services: includes banking, investment services, insurance 02/07/20 UCPBA Ottawa. June 10, 2017. 73 The analysis examines the economic value of industries on three levels: Direct: this includes only those employees and the
related value added for the relevant sector. In the case of Travel & Tourism, we only count the value added of the accommodation, recreation, transportation, and other related sectors. Indirect: this measures the supply chain impact (also called inter-industry linkages) for each sector. Induced: this measures the impacts of incomes earned directly and indirectly as they are spent in the local economy. The sum of direct, indirect, and induced impacts equals the total economic impact of a sector. 02/07/20 UCPBA Ottawa. June 10, 2017. 74
Absolute size and growth In 2011, Travel & Tourism generated $2 trillion in direct GDP. This contribution to global GDP is more than double that of the automotive industry and onethird larger than the global chemicals industry. The Travel & Tourism sector is three-quarters the size of the global education, communications, and mining sectors. 02/07/20 UCPBA Ottawa. June 10, 2017. 75
With the addition of indirect and induced economic impacts, the total GDP impact of Travel & Tourism was $6.3 trillion in 2011. This impact is larger than that of some of the most important manufacturing sectors namely automotive and chemicals manufacturing. 02/07/20 UCPBA Ottawa. June 10, 2017. 76 At 9.1% of global GDP, Travel & Tourism generates
more economic output than automotive manufacturing (7.9%), mining (8.0%) and chemicals manufacturing (9.0%). Travel & Tourism contributes roughly the same share of global GDP as the global education The Economic Advantages of Travel & Tourism and communications industries. In every region of the world, the Travel & Tourism industry directly contributes more to GDP than automotive manufacturing. 02/07/20 UCPBA Ottawa. June 10, 2017. 77
In the Americas, Travel & Tourism GDP is three times larger than auto manufacturing. In Europe, Travel & Tourism GDP is twice the size of auto manufacturing. Travel & Tourism GDP is larger than the chemicals industry in every world region except Asia, where it is only 9% lower. 02/07/20 UCPBA Ottawa. June 10, 2017. 78 In terms of employment, the importance of Travel &
Tourism is even more pronounced. With 98 million people directly employed in 2011, Travel & Tourism directly employs: 6 times more than automotive manufacturing 5 times more than the global chemicals industry 4 times more than the global mining industry 2 times more than the global communications industry A third more than the global financial services industry 02/07/20 UCPBA Ottawa. June 10, 2017. 79
With a total impact of 8.7% of world employment, Travel & Tourism is one of the leading job creators in the world. The industry sustained 255 million jobs in 2011. This exceeds the jobs impact of auto manufacturing, chemicals manufacturing, and mining, and is nearly on par with education. The Oxford Economics global industry model projects Travel & Tourism direct industry GDP to grow at an average of 4.2% per year over the next decade, greater than the 3.6% average annual growth expected for the total global economy. 02/07/20 UCPBA Ottawa. June 10, 2017.
80 Share of exports Travel & Tourism is an export industry when it provides services to international visitors and draws in spending from abroad. The industry represents a substantial share of total exports for many countries around the world, forming an essential component of global trade. 02/07/20 UCPBA Ottawa. June 10, 2017. 81
Travel & Tourism is a particularly attractive option to stimulate development in rural and low income countries and regions that previously relied heavily on agriculture and natural resource extraction. Tourism development often provides the dual advantages of generating employment and income while promoting cultural heritage and traditions. 02/07/20 UCPBA Ottawa. June 10, 2017. 82 Promoting Travel & Tourism can support
economic development, in part, because the industry cuts across and is linked to many other industries in the economy, generating additional demand in a wide range of services and professions. 02/07/20 UCPBA Ottawa. June 10, 2017. 83 Travel & Tourism drives foreign trade Given the cultural, language, and time differences that exist between countries, face-to-face meetings
are integral to developing international business relationships and a key driver of world trade. While videoconferencing and other remote communication technologies have become much more popular in recent years, they tend to complement business travel rather than replace it . 02/07/20 UCPBA Ottawa. June 10, 2017. 84 Travel & Tourism encourages investment
02/07/20 Trade and investment follow each other. The benefits that business travel brings to international trade also foster investment by domestic firms and by foreign direct investors. Foreign direct investments (FDI) that result from business travel introduces capital, technology, skills, people, know how, demand for local supplies to the domestic economy, and brings improvements in trade balances. UCPBA Ottawa. June 10, 2017.
85 Travel & Tourism develops infrastructure and services Demand for Travel & Tourism both international and domestic stimulates investment. In 2011, US$650 billion in capital investment, or 4.5 percent of total, was driven by Travel & Tourism. While a portion of this is related to individual investments in facilities that directly benefit tourists, such as the construction of hotels and resorts,Travel & Tourism also drives infrastructure improvements that collectively benefit tourists, local residents, and the wider economy.
02/07/20 UCPBA Ottawa. June 10, 2017. 86 Travel & Tourism is a force for economic development through diverse and powerful channels: (1) A well -developed Travel & Tourism industry can improve access tointernational markets, enhance business relationships, and increase trade opportunities.
02/07/20 UCPBA Ottawa. June 10, 2017. 87 (2) Increased connectivity that comes with Travel & Tourism can drive domestic and foreign direct investment, and enhance a regions attractiveness as a place to locate a headquarters, distribution or manufacturing centre. (3) Investments in public and private infrastructure, such as construction of accommodations, retail and food services facilities, and hard infrastructure such as roads,
bridges and air transportation capacity, provide benefits to all economic sectors as well as households. 02/07/20 UCPBA Ottawa. June 10, 2017. 88 (4) Travel & Tourism supports economic development via intense inter-industry linkages, remittances , and cultural heritage preservation. 02/07/20
UCPBA Ottawa. June 10, 2017. 89 Without the connectivity provided by the Travel & Tourism sector regions would find it hard to attract foreign direct investment. Access to airport hubs is critical for increase foreign direct investment. 02/07/20 UCPBA Ottawa. June 10, 2017.
90 Can increased Tourism help both Canada and Ukraine? Yes! Are there opportunities for partnering in between these two countries? You decide! 02/07/20 UCPBA Ottawa. June 10, 2017.
91 Discussion 02/07/20 UCPBA Ottawa. June 10, 2017. 92 Break Time! 02/07/20 UCPBA Ottawa. June 10, 2017.
93 Afternoon Session 3. Is Ukraine ready for Trade with Canada 02/07/20 Dr Michael Mackay, formerly a professor at the Kyiv Mohyla Academy, will lead a round table discussion on the different political and Business climate in Ukraine today as compared with the 1990s.
UCPBA Ottawa. June 10, 2017. 94 Partners in Progress and Canada-Ukraine Partners Project 02/07/20 UCPBA Ottawa. June 10, 2017. 95 Late 1992 to 1996
Placement of Canadian volunteers with Ukrainian partners for projects in support of civil society 02/07/20 UCPBA Ottawa. June 10, 2017. 96 Success:
02/07/20 direct person-to-person interactions meant that Canadians extended their connections to Ukraine beyond the family; cultural ties were strengthened Ukrainians saw real civil society activism, and home-grown initiatives took off; volunteerism broke free of its Soviet slave labour past UCPBA Ottawa. June 10, 2017. 97 Failure:
02/07/20 did not change Canadas institutional, bureaucratic approach to foreign aid and emphasis on development; Canada did not come to treat Ukraine as a peer did not stop what was really happening in Ukraine, which was a shift from statist authoritarianism to a hyper-inflationary kleptocracy; the power that civil society
exerts on government and business remained something that existed in Canada, but not in Ukraine. UCPBA Ottawa. June 10, 2017. 98 02/07/20 Civil society is the foundation of rule of law and the enforcement of contracts. It is essential to doing business in a fair market. The rise of the oligarchs in the 1990s in Ukraine and the re-theft of property that ensued, meant that honest business was impossible. Free trade was
a dead issue in the 1990s and 2000s. It took the Maidans of 2004 and of 2013-14 for civil society in Ukraine to exert some power, and to make a free trade agreement between Canada and Ukraine possible. The decommunization law which should have been passed in 1992 was passed in 2014, and is a great leap forward. UCPBA Ottawa. June 10, 2017. 99 Challenges:
02/07/20 the Canada-Ukraine Free Trade Agreement is traditional, eliminating tariffs on most goods and services; it needs to be deep and comprehensive like the EUUkraine DCFTA plus EU-Ukraine Association Agreement to really make a difference to Canadians and Ukrainians. UCPBA Ottawa. June 10, 2017. 100 Canada does not have visa-free reciprocity with Ukraine but the EU does;
until Canadians meet Ukrainians in Canada as true peers there will be no trade boom coming from CanadaUkraine FTA lustration in Ukraine has not reached the judiciary; until corrupt judges are rooted out there can be no confidence in the enforcement of contracts; starting from Partners in Progress/CanadaUkraine Partners Program 02/07/20 UCPBA Ottawa. June 10, 2017. 101 Canada has had mentorship
programs with Ukrainian judges these need to become less advisory and more tied to lustration and anticorruption 02/07/20 UCPBA Ottawa. June 10, 2017. 102 02/07/20 the IMF has pushed for land ownership and land sale reform; an honest land system rests on clear, unambiguous title to land; theft of land in the Soviet period
(collectivization) and theft of land in the oligarch period (1992 to EuroMaidan) means land ownership is mostly illegitimate; Ukraine needs to extend decommunization to land ownership, and implement restoration and restitution to original owners and heirs, as the Baltic countries have done; post EuroMaidan, Ukraine is understanding itself as a country having recovered independence (from the 1918-1921 Republic). UCPBA Ottawa. June 10, 2017. 103 Canada has been fortunate to inherit political
structures from Great Britain with a minimum of political violence. Ukraine has suffered appalling political violence from Russia. Ukrainians have to reach back further for examples of successful civil society, independence, and honest trade: Kyivan Rus, the viche, the Ukrainian Peoples Republic, the OUN/UPA, etc.. Canada has had time to mature into an advanced democracy, not having suffered invasion since 1814; Ukraine has been invaded by Russia since 2014, and has to defeat the foreign invaders at the same time it has to establish free trade with peer democracies like Canada. 02/07/20 UCPBA Ottawa. June 10, 2017.
104 There is formal free trade between Canada and Ukraine: removing tariffs and regulatory barriers. But peerage as nations and as peoples demands much much more. We need to start by understanding that in this relationship Canada is the Old Country and Ukraine is the Young Turk. 02/07/20 UCPBA Ottawa. June 10, 2017. 105
For us Canadians, we have to keep supporting civil society and rule of law in Ukraine, and we have to help liberate the occupied territories in Crimea and Donbas, and defeat invader Russia. Only then will be have real free trade. 02/07/20 UCPBA Ottawa. June 10, 2017. 106 Discussion
02/07/20 UCPBA Ottawa. June 10, 2017. 107 The end! Or the Beginning? 02/07/20 Todays Power Point presentation will be placed on the UCPBA site
under reports. www.ucpbaottawa.ca The Videos of the sessions will be placed on Youtube with links on the UCBA Ottawa site. UCPBA Ottawa. June 10, 2017. 108 Safe Travels Good bye. Ukrainian Canadian Professional and Business Association of Ottawa.
02/07/20 UCPBA Ottawa. June 10, 2017. 109