To assess the impact of CUFTA on bilateral trade, we have established a gravity model that takes into account international trade flows between all countries. The gravitational model estimates that the signing of the CUFTA increased overall Ukrainian exports to Canada by 6.5% between 2016 and 2018. At the same time, it was estimated that CUFTA did not have a significant impact on the dynamism of overall Canadian exports to Ukraine during this period. However, the effect of CUFTA appeared to be stronger for certain product categories at the HS2 level (from 2 to 6%): fish (HS03), pharmaceuticals (HS30), electrical machinery (HS85), etc. According to our estimates, CUFTA has not yet had much influence on trade dynamics due to the short period during which it entered into force, less than a year and a half of time analyzed. We expect it to increase in the future, as free trade agreements require more time to influence trade. Following the entry into force of cuFTA, 86% of Ukrainian imports from Canada were duty-free, with the remaining tariff benefits to be implemented by January 1, 2024. In the meantime, Canada immediately abolished tariffs on 99.9% of imports from Ukraine, and the Canada Tariff Finder was designed to make it easier for Canadian businesses, importers and exporters to find customs information for products using HS (Harmonized System) codes. Rules of origin are, of course, a central element of the Canada-Ukraine Free Trade Agreement. It`s important to note that just because an item is shipped from Ukraine or Canada doesn`t mean it complies with the rules of origin – so it`s not qualified for CUFTA benefits. As part of the agreement, Canada and Ukraine have agreed not to impose customs duties or other fees. On the other hand, these Canadian products can be freely imported into Ukraine: (b) promote the harmonious development of economic relations between Canada and Ukraine by developing trade, in order to create opportunities for economic development; We have also identified promising products for Canada`s import into Ukraine, i.e.
product groups in which Canada can expand its exports to Ukraine, both in terms of strengthening existing positions and opening up new markets. From a methodological point of view, promising products were identified according to several criteria: 1) positive comparative advantages (RSA) for this product in Canada and negative – in Ukraine; 2) considerable potential to increase Canadian exports to the Ukrainian market based on the assessment of the gap between current and potential export volumes or “under-trade” (estimated by the gravitational model). . . .