Posts Tagged ‘Canada’s General Preferential Tariff’


 

What is CETA?

CETA Agreement

CETA is the Comprehensive Economic Trade Agreement between Canada and the European Union (EU).  It is the 14th trade agreement that Canada has entered into. CETA received Royal Assent on May 16, 2017, and has been provisionally applied on September 21, 2017.

 

The European Union is (currently) comprised of 28 countries:

  •  Austria
  • Belgium
  • Bulgaria
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Ireland
  • Italy
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Poland
  • Portugal
  • Romania
  • Slovak Republic
  • Slovenia
  • Spain
  • Sweden
  • United Kingdom

This agreement will allow Canadian importers and exporters improved access to these markets through reduced or eliminated duties.

 

This agreement intends to break down trade barriers between the signatory nations and create both jobs and economic growth through new opportunities for importers and exporters.  Since the Comprehensive Economic Trade Agreement between Canada and the European Union is now in force, it will provide sweeping tariff reductions for almost all sectors of industry immediately.  Approximately 99% of products will be eligible for reduced duty rates immediately, and after 7 years all customs duties on industrial goods will be eliminated.   

 

With that in mind, CETA does have provisions for Canada and the EU to protect certain commodities from duty reduction or elimination, such as chicken and turkey imports into Canada and beef into the EU.   

 

For items to take advantage of the Comprehensive Economic Trade Agreement between Canada and the European Union preferential treatment, the commercial invoice or another commercial document must identify the originating product(s) in the shipment and  include the statement for originating goods such as the below:

 

(Period: from___________ to __________)

The exporter of the products covered by this document (customs authorization No …) declares that, except where otherwise clearly indicated, these products are of Canada/EU preferential origin.

 

……………………………………………………………………………………………………

(Place and date)

…………………………………………………………………………………………………

(Signature and printed name of the exporter)

 

The “Period from ___ to ___”  field can be left blank, or if it is completed, it cannot be for a period of greater than one year.  It is important to note that although a blanket period may be indicated, the origin statement must still accompany each shipment. The “customs authorization No” is only to be completed by approved EU exporters, otherwise, it can be omitted or left blank.

If the product being exported from the EU contains non-originating materials the supplier should also provide the following statement:

 

I, the undersigned, supplier of the goods covered by the annexed document, declare that:

The following materials which do not originate in the European Union/in Canada (1) have been used in the European Union/in Canada to produce the following supplied non-originating products.

Any other materials used in the European Union/in Canada to produce these products originate there.

 

I undertake to make available any further supporting documents required.

…………………………………………………………………………………………………………………………

(Place and Date)

…………………………………………………………………………………………………………………………

(Name and position, name and address of company)

…………………………………………………………………………………………………………………………

(Signature)

 

Unlike NAFTA, there is no CETA certificate of Origin, and therefore a certificate is not required for imports into Canada to utilized the CETA tariff treatment.

 

The products must also meet the origin and transshipment requirements applicable to them.  For the most part, this means the items, must be shipped directly from any EU Country or remain in customs control when in transit through a third country.

 

Already Canadian cheese importers can apply for tariff rate quota from Global Affairs Canada to enjoy reduced duty rates upon enforcement (without quota, cheese from the EU, as with other countries, will be subject to prohibitively high duty).  

 

The text of the agreement can be found on Canada Border Services Agency’s website here.

 

Are you an importer who is interested in Importing EU goods or already do so and want to know if your items will qualify for reduced duty under CETA?  Ask us a question below, and I will be happy to answer.

 

 

 

3 Ways To Improve Your Value Chain In The New Year

magnifying-glass Sometimes maintaining the status quo can cost businesses a significant amount in market share to competitors that are adapting to changing conditions. With businesses just starting to pick up momentum after the holiday season, January is a fantastic time to take stock of processes and review operations.

When it comes to Canadian Customs related matters, here are some suggested areas you could review to improve your value chain:

1. Suppliers:

a. Trade Agreements:

Exploring current and upcoming trade agreements can greatly benefit your company.  The United States has always been our strongest trading partner. Similar culture and ease of doing business have made our southern neighbors a substantial market to sell into. However, over the last few years, the Canadian Government has been busy negotiating new trade deals like the Comprehensive Economic and Trade Agreement (CETA) and the Trans-Pacific Partnership (TPP) to benefit Canada.

The Comprehensive Economic and Trade Agreement (CETA) will provide better access for purchasers to source products without having to worry about the impact of duty upon import.  The exact date for the roll out of CETA is not known yet, but Canadian importers should consider the European Union an option for future purchasing alternatives.

The Trans-Pacific Partnership (TPP) will create a free-trade zone among 12 nations around the Pacific, making it the world’s largest. The countries within its scope account for 40 per cent of the world’s economic output. Although the text of the agreement was released on November 5, 2015, each country will need to ratify the final text before it takes effect. In Canada, that will take the form of a vote in Parliament, following the election (source). A vote is expected early this year in the U.S. Congress, and it could prove difficult.

b. Canada’s General Preferential Tariff (GPT):

The General Preferential Tariff (GPT) was implemented in 1974 as Canada’s preferential tariff treatment for developing countries. The original policy intent of the GPT was to encourage imports from developing countries as a means to promote their economic growth and export earnings.  Under the current GPT, Canada offers duty-free or preferential duty rates to imports of most products from 175 designated beneficiaries.

c. Supply Chain Logistics:

Reviewing freight lanes and carriers hired to move your freight can also garner some economic returns to your organization. By making the effort to arrange your own transportation you increase you buying power. Consolidating purchasing can help your transportation budget go further.

 

2. Customers:

Canadian products are well known for their purity, quality, and innovation. The European Union has a desirable demographic market for Canadian products. It is both large and increasingly more accessible than ever before in the world of electronic commerce. Under CETA, it has the potential for breathing new life into the car manufacturing and resource industries with the elimination of tariffs to follow.

Increased service on some ocean lanes by several of the steamship lines makes for easier transportation of Canadian goods to international markets as well.

 

3. Compliance:

a. Trade Compliance Program

One of the most overlooked aspects of importing and exporting is trade compliance. Importing and exporting are privileges that allow Canadian companies to generate revenue. Having a program in place to systematically review the work being done for your organization in terms of Customs declarations on international transactions is very important.

b. Self Auditing Program

Establishing best practices for reviewing the work that your trade professionals do for you is key to keeping records that will withstand a Customs audit. Sometimes the savings on an entry fee is offset by the cost of retaining a senior customs broker’s expertise to get your organization in front of an audit or penalty under the Administrative Monetary Penalty System (AMPS).

c. Customs Brokers

Buyer behaviour is complex. Some companies use multiple customs brokers for various reasons. These reasons can include pricing, relationship between the parties, and carrier moving the freight. By using multiple customs brokers, the risk for inconsistencies on Customs declarations increases drastically, as there is room for interpretation in the Customs tariff.

Having a solid relationship with your customs broker who knows your business model and is familiar with provisions in the Customs Act and Customs Tariff can help your organization. An experienced customs broker can guide you in  taking advantage of potential savings through trade agreements or end-use applications.

d. Customs Regulations

If declarations are being made “in house”, it is extremely important to make sure internal staff understand the consequences of the declarations they are completing. Staff turnover can put your organization at risk of a Customs audit in a big way, and inexperienced staff can put your organization in jeopardy if they do not understand Customs. Current trade compliance training and education can fill the gaps to create a complete custom compliance program.

 

2016 looks bright and Pacific Customs Brokers wishes you a prosperous New Year!

 

Speak with one of our Trade Advisors today to learn how Pacific Customs Brokers’ trade advisory services can help your business.

Has your business taken stock of processes and reviewed operations for this year? Have you found it beneficial? Share your thoughts in our comments section.

References:

Start the New Year Right – Strategies to Improve Your Value Chain

Business ReviewWith businesses just starting to pick up momentum after the holiday season, January is a fantastic time to take stock of processes and review operations. Sometimes maintaining the status quo can cost businesses a significant amount in market share to competitors that are adapting to changing conditions.

When it comes to Canadian Customs related matters, here are some suggested areas you could review to improve your value chain:

1. Suppliers:

a. Trade Agreements:

Exploring current and upcoming trade agreements can greatly benefit your company.  The United States has always been our strongest trading partner. Similar culture and ease of doing business have made our southern neighbors a substantial market to sell into. However, during 2013, the Canadian Government was busy negotiating new trade deals to benefit Canada. The latest trade agreement that has been struck between Canada and the European Union (CETA) will provide better access for purchasers to source products without having to worry about the impact of duty upon import.  European goods have a reputation for their prestige and high quality. European craftsmanship has been refined and goes back for decades. They are on the cutting edge of fashion and technology with a healthy respect for the trademarks, patents, and copyrights that go along with intellectual property. Many countries that are part of the European Union are the home to manufacturers that make products that are economically viable to purchase for Canadian companies. High rates of unemployment for certain countries in the European Union can mean significant opportunities for Canadian purchasers. The exact date for the roll out of CETA is not known yet, but importers should consider the European Union an option for future purchasing alternatives.

b. Canada’s General Preferential Tariff (GPT):

The General Preferential Tariff Agreement Canada had with China is slated to expire January 1, 2015, so unless China chooses to participate in the Trans-Pacific Partnership, the cost of many Chinese goods will increase in terms of Customs duties payable upon import into Canada.

The Customs D Memoranda 11 covers General Tariff information. Newer trade agreements may not be posted yet, but will be as they get approved by Parliament.

c. Supply Chain Logistics:

Reviewing freight lanes and carriers hired to move your freight can also garner some economic returns to your organization. By making the effort to arrange your own transportation; buying power increases. Consolidating purchasing can help your transportation budget go further.

2. Customers:

Canadian products are well known for their purity, quality, and innovation. The European Union has a desirable demographic market for Canadian products. It is both large and increasingly more accessible than ever before in the world of electronic commerce. Under CETA, it has the potential for breathing new life into the car manufacturing and resource industries with the elimination of tariffs to follow.

Increased service on some ocean lanes by several of the steamship lines makes for easier transportation of Canadian goods to international markets as well.

3. Compliance:

a. Trade Compliance Program

One of the most overlooked aspects of importing and exporting is trade compliance. Importing and exporting are privileges that allow Canadian companies to generate revenue. Having a program in place to systematically review the work being done for your organization in terms of Customs declarations on international transactions is very important.

b. Self Auditing Program

Establishing best practices for reviewing the work that your trade professionals do for you is key to keeping records that will withstand a Customs audit. Sometimes the savings on an entry fee is offset by the cost of retaining a senior customs broker’s expertise to get your organization in front of an audit or penalty under the Administrative Monetary Penalty System (AMPS).

c. Customs Brokers

Buyer behaviour is complex. Some companies use multiple customs brokers for various reasons. These reasons can include pricing, relationship between the parties, and carrier moving the freight. By using multiple customs brokers, the risk for inconsistencies on Customs declarations increases drastically, as there is room for interpretation in the Customs tariff.

Having a solid relationship with your customs broker who knows your business model and is familiar with provisions in the Customs Act and Customs Tariff can help your organization. An experienced customs broker can guide you in  taking advantage of potential savings through trade agreements or end-use applications.

d. Customs Regulations

If declarations are being made “in house”, it is extremely important to make sure internal staff understand the consequences of the declarations they are completing. Staff turnover can put your organization at risk of an Customs audit in a big way, and inexperienced staff can put your organization in jeopardy if they do not understand Customs. Current trade compliance training and education can fill the gaps to create a complete custom compliance program.

 

2014 looks bright and Pacific Customs Brokers wishes you a prosperous New Year!

To learn how Pacific Customs Brokers’ Customs trade compliance and Customs audit consulting can help your business; speak with one of our Trade Compliance Advisors today.

Has your business taken stock of processes and reviewed operations for this year? Have you found it beneficial? Share your thoughts in our comments section.

References: