Madam Chair, members of Parliament, thank you for this invitation.
Today, I want to talk to you about the modernization of the Canada‑Ukraine Free Trade Agreement—CUFTA—and the broader issue of control in which it operates. We can't separate trade issues from the geopolitical and social situation.
My analysis rests on the premise that free trade is meant to be mutually beneficial to the parties involved and that the hoped‑for gains aren't thwarted by unfavourable policies for either party. One aspect of the current situation is the relationship between Canada and Russia, and between Ukraine and Russia.
The Government of Canada's website on the modernization of CUFTA states as follows:
It will also help reinforce the rules‑based international system by advancing fair, inclusive and transparent trade with Ukraine and will support prospects for long‑term security, stability and broad‑based economic development in Ukraine.
It's widely known that international trade contributes to stability, and that stability is one condition for open international trade. If the goal is to support Ukraine's long‑term prospects for security and stability, it's necessary to go further than just removing tariff barriers.
To date, CUFTA hasn't led to any success. In 2016, prior to the free trade agreement with Ukraine, trade between the two countries was at a higher level than since it came into effect, except in 2017. In 2017, the agreement came into effect on August 1. A major reason is the political and geopolitical challenges in Ukraine.
This country in particular is used as a mere pawn in the chess game of the great powers. Ukraine feels threatened by Russia, and Russia also feels targeted by NATO's past and future expansion. Since security can only be mutual, real negotiations should be undertaken to review the security architecture in Europe. An all‑inclusive agreement would end Moscow's exploitation of the pro‑Russian separatists in Donbass, reassure the Russian authorities and greatly enhance the sense of security in Ukraine. All this would have a positive impact on investment and trade.
However, for the time being, the Canadian position on the current conflict involving Ukraine is counterproductive. The refusal to acknowledge at least part of Russia's grievances is blocking any real progress in the negotiations. The possible introduction of additional sanctions against Russia will have a negative impact on all countries involved, starting with Ukraine, which trades about 50 times more with its powerful neighbour than it does with Canada.
It should be noted that another factor is even more dangerous for global security in the long term. Russia's growing isolation is drawing it increasingly closer to the orbit of China, a country that remains dissatisfied with the current world order and that aspires to hegemony. It's widely known that periods of transition between two hegemonies provide the greatest opportunity for tension and undermine the collaboration needed to maintain the public goods established by the most influential countries in the international system. History showed this with the decline of Great Britain in the late 19th century and during the multipolar period following the First World War.
Is it wise, in the current situation, to let Russia pull away? Could Ukraine really benefit from this type of situation?
In conclusion, I believe that the consideration of the modernization of CUFTA must take into account the broader parameters that I outlined.
Thank you.