Canada Russia Free Trade Agreement: What You Need to Know
In 2012, Canada and Russia signed a free trade agreement (FTA) that aimed to deepen their economic ties by removing tariffs and trade barriers. The agreement, which was the first FTA between a G7 country and a member of the BRICs (Brazil, Russia, India, China), was seen as a milestone in their relationship as well as a potential source of growth for both nations.
However, the Canada-Russia FTA has faced several challenges since its inception, including geopolitical tensions, sanctions, and changes in government on both sides. In this article, we`ll explore some of the key aspects of the agreement and its current status.
What`s in the Agreement?
The Canada-Russia FTA covers a wide range of sectors, including agriculture, energy, manufacturing, and services. Some of the key provisions are:
– Tariff elimination: Over 90% of Canada`s exports to Russia and 100% of Russia`s exports to Canada became duty-free immediately upon entry into force of the FTA.
– Investment protection: The agreement includes provisions on the protection of investments, including the establishment of a Joint Commission on Trade and Investment, which aims to facilitate investment flows between the two countries.
– Technical barriers to trade: The FTA includes provisions on regulatory cooperation, conformity assessment, and information exchange to reduce technical barriers to trade.
– Intellectual property: The agreement includes provisions on the protection and enforcement of intellectual property rights, including patents, trademarks, copyrights, and trade secrets.
Opportunities and Challenges
The Canada-Russia FTA was expected to create new opportunities for Canadian businesses in Russia, a market with a population of over 144 million and abundant natural resources. Some of the sectors that were seen as having the most potential for growth were agriculture, transportation, and energy.
However, the agreement faced several challenges almost immediately after it was signed. In 2014, Russia annexed Crimea and was hit with economic sanctions by Canada and other Western countries. The sanctions, which were aimed at punishing Russia for its actions in Ukraine, included restrictions on trade, investment, and financial transactions.
As a result, the bilateral trade between Canada and Russia has decreased significantly, from over $3 billion in 2012 to less than $1 billion in 2019. The sanctions have also affected Canadian businesses operating in Russia, some of which have had their assets seized or their operations disrupted.
In addition to geopolitical tensions, the Canada-Russia FTA has faced other challenges, including the decline in oil prices, the COVID-19 pandemic, and changes in government on both sides. In 2015, Canada elected a new government led by Prime Minister Justin Trudeau, who has taken a more cautious approach to engagement with Russia than his predecessor, Stephen Harper.
The Future of the Canada-Russia FTA
Despite the challenges, the Canada-Russia FTA remains in force, and both countries have expressed their commitment to its implementation. During a virtual meeting in March 2021, Canadian and Russian officials discussed the potential for increased trade and investment, as well as areas of cooperation such as Arctic development and environmental protection.
However, the future of the Canada-Russia FTA remains uncertain, given the ongoing geopolitical tensions and the impact of the pandemic on global trade. Canadian businesses that are interested in expanding into Russia or exploring new opportunities should keep an eye on developments and seek guidance from experts in the field.
In conclusion, the Canada-Russia FTA is an important agreement that has the potential to benefit both countries` economies. However, it has faced several challenges since its inception, including geopolitical tensions, sanctions, and changes in government. Canadian businesses that are interested in the Russian market should stay informed and seek expert advice before entering into any new ventures.