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Prepared in conjunction with
www.lexsage.com
Developed by
Member Exclusive Guidebook
SEPTEMBER, 2017
Canada-European Union Comprehensive Economic and Trade AgreementWhat Should Retailers Know? Key Questions and Answers
TABLE OF CONTENTS1. Introduction: Message from Retail Council of Canada ..............................1
2. What Should Retailers Know? Key Questions and Answers .........................................................................................................................21. What is Canada-EU CETA? ..........................................................................................................................................22. What is the process for implementation? ...................................................................................................23. From which countries may I claim CETA benefits .............................................................................34. What about other European Countries?......................................................................................................45. How does Brexit affect goods from the UK? .........................................................................................46. When should retailers time purchase –
When can I start to claim CETA duty rates? ...........................................................................................47. What are the top questions for retailers to ask? .................................................................................58. What government departments have responsibilities
for imported goods?............................................................................................................................................................69. Are the rules of origin in the Canada-EU CETA
different than NAFTA? ......................................................................................................................................................910. What is the Tariff Rate Code for goods entering
Canada from the European Union? ................................................................................................................1011. What is a geographic indication? .....................................................................................................................1012. What goods become duty-free immediately upon
provisional implementation of the Canada-EU CETA? ..............................................................1213. How does the Canada-EU CETA treat textiles and
apparel goods coming into Canada? .............................................................................................................1314. How does the Canada-EU CETA treat footwear
goods coming into Canada? ...................................................................................................................................1315. How does the Canada-EU CETA treat alcoholic
beverages good coming into Canada? ........................................................................................................1316. How does the Canada-EU CETA treat foodstuffs
coming into Canada? ......................................................................................................................................................1417. How does the Canada-EU CETA treat furniture
coming into Canada? ......................................................................................................................................................16
Member Exclusive Guidebook
18. How does the Canada-EU CETA treat aromatherapy and cosmetics products coming into Canada?.................................................................................16
19. How does the Canada-EU CETA treat e-Commerce goods? ............................................1720. Are goods subject to quotas or volume limits? .................................................................................1721. Are retailers required to reduce prices if no longer
paying customers duties on imported items? .....................................................................................1722. What documentation do I need to obtain preferential tariff rates? ............................1823. What documentation do I need to have import goods from the EU? .....................1824. Can I receive CETA preferential rates of duty if I import the
goods from a warehouse located outside the European Union? ...............................2025. If the EU goods met EU product standards, do I need to
get approvals from the Canadian government also? ..................................................................2126. Should I use a customs broker? .........................................................................................................................2227. When do I need a customs ruling? ................................................................................................................2328. What should Canadian retailers who sell online to Europe do
to prepare for the Canada-EU CETA provisional implementation? ..........................2329. Can Canadian retailers benefit from preferential CETA treatment
if EU-origin goods are purchased from a third country? ..........................................23
Schedule AH.S. Chapters and Canada’s Commitments to Reduce Customs Duties ..................................25Schedule BGeographic Indications in the Canada-EU CETA ................................................................................................33Schedule CEuropean Union .......................................................................................................................................................................................40Schedule DRules of Origin For Textiles and Apparel ....................................................................................................................48
Schedule ECETA “Decision Tree” ............................................................................................................................................................................51
© Retail Council of Canada 2017. All rights reserved.
Canada-European Union Comprehensive Economic and Trade Agreement
This Guidebook is intended to inform retailers and help them consider the implications of CETA on their business. The Guidebook’s materials are general in nature only and do not constitute legal advice. Please contact legal counsel about the application of CETA or other relevant legislation to your particular situation.
1
MESSAGE FROM RETAIL COUNCIL OF CANADA
Retail Council of Canada (RCC) is committed to serve as a knowledge source for our members on important issues facing the retail industry in Canada.
The Canada-European Union Comprehensive Economic and Trade Agreement (“Canada-EU CETA”) is one of these issues.
Market access means “Opportunities”. Canadian retailers have always been entitled to import European goods and many European goods are sold in Canadian retail stores today. However, with the provisional implementation of the Canada-EU CETA, there will be new and improved opportunities to import EU-origin goods with less paid in duties and less red tape at the border. The overall goal of the Canada-EU CETA is to make importing and exporting of goods simpler. The geographic indications provisions, however, will present some challenges for Canadian retailers.
Canadian online retailers also have opportunities to sell Canadian manufactured goods into the European Union. Trade is a two-way street.
Retail Council of Canada, in collaboration with LexSage, developed this RCC Member Exclusive Guidebook to help RCC members more easily navigate this matter. We encourage you to share this with your employees who need to be aware of this important information on the Canada-Eu CETA.
We also invite you to reach out to RCC should you require any additional assistance. Please contact Karl Littler at [email protected] or (416) 467-3783 or call toll free at 1 888 373-8245.
Kind regards,
Diane J. Brisebois President and CEO Retail Council of Canada
1. INTRODUCTION
The overall goal of the Canada-EU CETA is to make importing and exporting goods simpler.
DIANE J. BRISEBOIS
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2. WHAT SHOULD RETAILERS KNOW: KEY QUESTIONS AND ANSWERS
1. What is the Canada-EU CETA?
The Canada-European Union Comprehensive Economic and Trade Agreement (“Canada-EU CETA”) is a free trade agreement between Canada and the 28 countries of the European Union. The Canada-EU CETA is Canada’s largest free trade agreement since NAFTA.
The Canada-EU CETA is a progressive trade agreement that covers almost all sectors of the economy. The key elements of the Canada-EU CETA of interest to retailers are (1) market access for goods, (2) rules of origin, (3) removal of technical barriers to trade that reduce administrative delays relating to conformity assessment procedures for product standards, (4) geographic indications and intellectual property and (5) ecommerce. The Canada-EU CETA expands market access to services and government procurement beyond what Canada and Europe have agreed to in their commitments at the World Trade Organization.
Canada and the European Union started to negotiate the Canada-EU CETA on May 6, 2009. After many years of negotiation that included both federal negotiators from the Government of Canada, provincial negotiators from the provinces and territories, negotiators from the European Union and negotiators from the member States, the final text of the Canada-EU CETA was signed on October 30, 2016. When we talk of the Canada-EU CETA, we are talking about the commitments made in the October 30, 2016 signed documents and Canada’s changes to domestic law needed to implement those commitments.
2. What is the process for implementation?
Provisional application of the Canada-EU CETA will take place on the first day of the month following Canada’s ratification of the Canada-EU CETA and Canada’s notification of the European Union that the Canada-EU CETA has been ratified (which will likely take place on the same day as Canada passes Bill C-30 into law). It is anticipated provisional implementation will take place in the coming months.
On February 15, 2017, the Canada-EU CETA was ratified by the European Parliament. This means that Canada completing the Canadian legislative
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process and formally ratifying the Canada-EU CETA is all that stands between Canadian retailers and their new and improved opportunities.
On March 7, 2017, Bill C-30 “An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures” passed second reading in Canada’s Senate. On May 11, 2017, Bill C-30 passed third reading in Canada’s Senate. On May 16, 2017, Bill C-30 received Royal Assent in Canada’s House of Commons.
According to Article 30.7 of the Canada-EU CETA, the Canada-EU CETA can enter into force on the first day after the month of ratification by the parties.
“Provisional implementation” means that the all or almost all of the market access provisions for goods and services will be implemented as soon as the European Parliament and the Government of Canada have ratified the Canada-EU CETA. The effect of provisional implementation is that the non-controversial provisions (96% of the Canada-EU CETA provisions) go into effect even though there are outstanding issues relating to the investment chapter to resolve. There are EU Members who have concerns about the investor-state dispute mechanism and the competency of the EU Parliament to enter into a free trade agreement (rather than requiring EU Members Parliamentary approval).
3. From which countries may I claim CETA benefits?
Canadian retailers may benefit from the Canada-EU CETA duty relief commitments made in respect of imports originating in the 28 European Union countries, which are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. Turkey is not an EU member and, therefore, imports from Turkey are not covered by the Canada-EU CETA. The CETA territories also includes Andorra, the Aland Islands, French Guiana, Guadeloupe, Martinique, Mayotte, Reunion, Saint Bartelemy and Saint Martin,
The effect of provisional implementation is that the non-controversial provisions (96% of the Canada-EU CETA provisions) go into effect even though there are outstanding issues relating to the investment chapter to resolve.
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Heligoland, Busingen, Azores, Madeira, Ceuta, Melilia, the Canary Islands, the Channel Islands, the Isle of Man, Gibraltar, Akrotiri and Dhekelia.
4. What about the other European countries?
Iceland, Liechtenstein, Norway, and Switzerland signed the Canada-European Free Trade Association Free Trade Agreement (the “Canada-EFTA FTA”) and it has been in effect since July 1, 2009. Most EFTA-origin goods already enter Canada duty-free under the Canada-EFTA FTA.
5. How does Brexit affect goods from the UK?
The United Kingdom (Great Britain, Scotland and Northern Ireland) will become non-EU countries/jurisdictions after Brexit. On March 29, 2017, the Government of the United Kingdom notified the European Union that the United Kingdom will leave the European Union. The notification starts the Article 50 process for the exit of the United Kingdom from the European Union. All steps of formal separation must be finalized within 2 years. The Brexit date could be as early as March 30, 2019.
The United Kingdom is currently a member of the European Union and the Canada-EU CETA will, until Brexit is complete, cover goods (i) originating in the United Kingdom (ii) originating in Canada and being exported from Canada to the United Kingdom. The fact that Brexit will happen in the future does not affect the provisional implementation of the Canada-EU CETA. It may be that in the future Canada will negotiate a free trade agreement with the United Kingdom – Canada will make plans to cross that bridge when we get closer to it.
6. When should retailers time their EU purchases - When can I start to claim CETA duty rates?
The date for provisional implementation will be over the coming months. Canadian retailers who act as the importer of record should start to
The United Kingdom (Great Britain, Scotland and Northern Ireland) will become non-EU countries/jurisdictions after Brexit.
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prepare now. The following questions should be asked as we near the provisional implementation date in order to have correct documentation for European-origin goods and to take advantage of the benefits in the Canada-EU CETA:
• What European origin goods do I currently import?
• What goods do I currently import from a European vendor and do those goods meet the rules of origin in the Canada-EU CETA?
• What are the SKUs and product codes of the goods that I import from the European Union that are entitled to Canada-EU CETA preferential tariff treatment?
• Who within my organization must update computerized records and databases so that customs documentation will be correct?
• What changes need to be made within our computerized record keeping programs and databases?
• Has there been a meeting with the customs broker and freight forwarded to make sure that they have updated computerized records and databases?
• Do I have new opportunities to purchase new EU-origin goods?
• Do I have the necessary Certifications of Origin from suppliers of EU-origin goods?
• Do I require other governmental certification approvals for the goods I import/plan to import from the EU?
• What record keeping requirements do I have to implement under Canadian law to maintain Canada-EU benefits that I claim?
7. What are the top questions for retailers to ask?
There are many questions to ask and which questions depend on the goods to be imported. That being said, assuming that the retailer is the importer of record of the goods, there are certain standard areas of inquiry:
• What is the Harmonized System of Coding (H.S.) classification of the good to be imported from the EU?
• What is the rule of origin in the Canada-EU CETA applicable to that good based on that H.S. classification number?
There are many questions to ask and which questions depend on the goods to be imported.
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• Do the goods originate in an EU country according to the Canada-EU CETA rules of origin?
• What is the applicable duty rate of the goods?
• Are the goods subject to antidumping or countervailing duties?
• Do I require quota to import the goods? (i.e., are there any restrictions on the volume of goods that I may import under the preferential Canada-EU CETA duty rates?)
• What is the value for duty for customs purposes of the goods to be imported?
• What documentation do I need before I can import this good?
• Will the supplier provide a certification of origin?
• Are there any Canadian labelling or marking requirements for the goods?
• Do the goods need approvals from a Canadian governmental department before importation and who gives that approval?
• Do the goods need approvals from a Canadian governmental department before importation and who gives that approval?
• Do I need to change the names, labels, ingredient lists, etc. on the goods I sell in Canada purchased from a non-EU country or in Canada?
8. What governmental departments have responsibilities for imported goods?
While not a result of the Canada-EU CETA, there are government approvals required prior to the importation of many goods regardless of origin.
The most important Canadian government body that enforces Canada’s border laws is the Canada Border Services Agency (“CBSA”). The CBSA enforces Canada’s border laws and is responsible for the determination of the tariff classification, origin and value (for customs duty purposes) of imported goods. The CBSA also determines whether goods being imported meet Canada’s marking and labelling requirements. The CBSA can delay or stop the entry of goods into Canada.
The CBSA works with many other government departments, which have other governmental responsibilities with respect to imported goods. You may have to obtain approvals or communicate with some of the following other governmental departments before importing goods into Canada, while importing goods into Canada, or after importing goods into Canada. New forms of approvals are generally not required by the Canada-EU CETA
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WHAT SHOULD RETAILERS KNOW: KEY QUESTIONS AND ANSWERS2.
for goods currently being imported. However, approvals for new goods to be imported may require approvals under Canadian laws.
Other Governmental Department (OGDs)1 General Statement of Responsibility of OGD
Canada Post Certain items cannot be exported by mail, e.g. perfumes, liquids, perishables, alcohol and tobacco, etc.
Canadian Heritage If you are exporting goods listed on the Canadian Cultural Property Export Control List2, you will need prior approval from Canadian Heritage.
Global Affairs Canada
If you need an import permit or export permit, Global Affairs Canada receives the applications, reviews the statutory, regulatory and other requirements, and issues most of the import and export permits.
Royal Canadian Mounted Police (“RCMP”)
If you break a federal law in respect of the importation of goods or prevent the CBSA from enforcing Canada’s border laws, the RCMP may arrest you and lay federal criminal charges.
Canada Food Inspection Agency (“CFIA”)
If you are importing foods, plants, animals or related products or wood packaging, you will need to review and follow CFIA rules.
The CFIA also has many rules relating to food labelling.
Fisheries and Oceans Canada
If you are importing fish or seafood, you will need to know Fisheries and Ocean Canada rules and obtain the necessary permits.
Health Canada If you are importing natural health products, controlled or restricted drugs, precursor chemicals, legal narcotics, controlled substances, medical devices and other items, you will need to know the Health Canada rules and possibly apply for and receive a Health Canada Product License.
Health Canada is responsible for regulations that govern the packaging and labelling of certain products (such as children’s toys, children’s sleepwear, chemicals, beds, jewelry, cosmetics, medicines, natural supplements, protein bars, etc.). You will need to review and follow the Health Canada rules.
1 This is not an all-inclusive list. We have merely provided some of the more common OGDs. Depending on what are the goods that you are importing, there may be other OGDs which have rules relating to the importation of the goods and sale in Canada of the goods.2 C.R.C., c. 448 See http://laws-lois.justice.gc.ca/PDF/C.R.C.,_c._448.pdf
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Other Governmental Department (OGDs)1 General Statement of Responsibility of OGD
Natural Resources Canada (“NRCan”)
If you are importing rough diamonds, know the NRCan rules and obtain the proper approvals and have the necessary paperwork (such as Kimberly Process Certificates).
NRCan also administers the importation of certain energy-using products (e.g., clothes dryers, clothes washers, dishwashers, electric ranges, freezers, refrigerators, room air conditioners, gas fireplaces, lamps, light bulbs etc.). You will need to review and follow the NRCan rules.
Public Health Agency of Canada
If you import or export human body parts or pathogens, you will need to know the rules and have the necessary documentation and/or approvals.
Transport Canada Transport Canada oversees matters relating to the roads in Canada, such as the importation of hazardous materials or waste that will be transported over Canada’s road and the importation of tires and vehicles to be used on Canada’s roads. You will need to review and follow the Transport Canada rules.
Canada Nuclear Safety Commission (“CNSC”)
If you are importing or exporting nuclear material, equipment and technology, nuclear-related, dual-use material, equipment and technology or radiation emitting devices, you must review and follow CNSC rules and apply for the necessary permits.
You may also be required to work with and communicate with provincial governmental bodies.
Before you start to import goods into Canada, you must understand who are the government entities with whom you will have to work and communicate on a regular basis. Most importantly you have to identify which government entities may prevent your goods from entering the country if you did not follow their laws, regulations, rules, policies, guidelines, notices, etc.
Many importers wrongly assume if a good is sold in the EU that it will be automatically accepted into Canada. This is not correct.
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Many importers wrongly assume if a good is sold in the EU that it will be automatically accepted into Canada. This is not correct. When an importer orders first and asks questions later, they may make a costly mistake.
9. Are the rules of origin in the Canada-EU CETA different than NAFTA?
Do not assume that the rule of origin in the Canada-EU CETA applicable for a good is the same as the rule of origin in NAFTA or another Canadian FTA for that good. It is imperative to review the rules of origin before importing goods from the European Union and claiming the Canada-EU CETA preferential tariff rate.
Before provisional implementation of the Canada-EU CETA, the Most-Favoured-Nation (“MFN”) rules of origin apply. Generally speaking, if the last substantial manufacturing activities with respect to a good occurred
in the European Union, the good may be entered into Canada as originating in a European country and entitled to the MFN duty rate.
After provisional implementation of the Canada-EU CETA, the rules of origin in the Canada-EU CETA must be applied in order
to receive preferential tariff treatment. The rules of origin in the Canada-EU CETA are more restrictive than the MFN rules of origin and are set out on an H.S. tariff classification number-by-number basis.
Preferential rules of origin usually are divided into one of 4 categories:
• Tariff Shift Rules of Origin (the rule is stated in terms that the H.S. tariff classification of the manufactured or processed good to be imported into Canada changes from the H.S. tariff classification of inputs/ingredients imported into the country from which the good is exported);
• Regional Value Content Rules (the rule is stated in terms of a percentage of value added in the country of manufacture);
• Combined Tariff Shift and Regional Value Content Rules (the rule of origin combines a tariff shift requirement and a regional value content requirement); and
A determination of H.S. tariff classification is made on a good-by-good basis.
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• Special Rules of Origin (certain goods are considered to be sensitive (such as agricultural products, textiles, automobiles/arts, medical devices, pharmaceuticals, etc. and have specially negotiated rules of origin)).
If a good does not meet the Canada-EU CETA rules of origin, then it may still enter Canada as a good from any EU Member (e.g., Italy), but the MFN rate of duty would be applied to the goods.
A determination of H.S. tariff classification is made on a good-by-good basis. Gather as much information as you can about the good that you plan to import from the EU. Ask the supplier for product literature, a list of ingredients or a bill of materials (if you can get it), technical specifications, EU governmental approvals/certifications, patent information, trade-mark information, other product composition and use information, market studies or trial information if available, and descriptions used by the seller in marketing literature and official documents. With respect to some goods, it may be prudent to ask for lab test results or obtain a sample in order to do your own testing in Canada.
10. What is the Tariff Rate Code for goods entering Canada from the European Union?
The Tariff Rate Code abbreviation to be used on imports of goods of European Union origin is “CEUT”. A numerical code goes in Box 30 of the B3, “Customs Coding Form”. However, this number has not yet been released by the CBSA as of the date of publication of this Guidebook. We expect the Tariff Rate Code will be 31.
11. What is a geographic indication?
A “geographic indication” is an indication (word or a symbol) which identifies a distinctive food or drink product as originating in the territory of a European country or locality in a European country, where a given quality and reputation or other characteristic of the product is essentially attributable to its geographic region.
Currently, the Trade-marks Act only protects wine and spirits geographic indications. Bill C-30 amends the Trade-marks Act to implement into Canadian intellectual property law Canada’s commitments in the Canada-EU CETA. In the Canada-EU CETA, Canada has agreed to protect over 143
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European geographical indications, or GIs. Annex 20-A of the Canada-EU CETA sets out the list of European products that are protected. These are names of high-quality food and drink products linked to the regions where the products are made.
These protected food and beverage products names cannot be used on Canadian-origin goods. If cheese is sold in Canada as “Gouda”, it must come from Gouda. Schedule B to this Guidebook sets out the specific protected GIs in the Canada-EU CETA. All of the geographic indications fall within the following categories:
• Beer;
• Cereals;
• Cheese;
• Confectionary and baked products;
• Dry-cured meats;
• Essential oils;
• Fresh, frozen and processed fruits and nuts;
• Fresh, frozen and processed meats;
• Fresh, frozen and processed vegetables;
• Fresh and processed fruits and nuts;
• Hops;
• Natural gums and resins;
• Oils and animal fats;
• Oilseeds;
• Spices;
• Table and processed olives; and
• Vinegar.
Once Bill C-30 is passed and implemented, the Annex 20-A products will be protected. The commercial adoption or use of a protected GI on Canadian-made goods (and goods from non-EU countries) is prohibited. No person may use a protected GI or its translation for comparative advertising purposes on packaging or labels. Covered products may not be exported or imported, if the product itself, or its label or packaging, bears a protected GI and the product does not originate from the territory indicated, or if it does originate from the territory indicated, was not produced or manufactured in accordance with the law applicable to that territory. For example, cheese manufactured in the United States and identified as Munster cannot be imported.
The exceptions are complicated and it is best to obtain further guidance.
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There are exceptions to the new rules. For example, Canadian producers of certain types of cheese who used the indications, such as “Asiago”, “Feta”, “Fontina”, “Gorgonzola” and “Munster”, prior to October 18, 2013 may continue to do so without the application of new GI rules. However, future users of these terms must do so in conjunction with qualifying terms such as “kind”, “type”, “style” or “imitation”. The exceptions are complicated and it is best to obtain further guidance.
Retailers of food products made with the protected GI products have issues to resolve because the use of the GI in a list of ingredients on packaging could be a problem if the ingredient did not originate in the EU. Be sure to review labels and ingredient listings on packages and obtain advice as to how to best solve the GI problems.
Remedies may be pursued against Canadian retailers who do not follow the new GI rules.
12. What goods become duty-free immediately upon provisional implementation of the Canada-EU CETA?
Most goods originating in the European Union (which is an important fact to determine before importing) will enter Canada duty free immediately. For example, these following goods desired by consumers may enter Canada duty-free immediately upon provisional implementation of the Canada-EU CETA:
• Chocolate from Spain and Belgium;
• Wine from Italy, Spain, France, Portugal and Germany;
• Port from Portugal;
• Scotch from Scotland;
• Whisky from Ireland;
• Italian shoes;
• Italian and French scarves;
• British tweed jackets;
• French perfume;
• French, German and Italian cosmetics;
• Tuscan ceramics;
• Waterford (UK) crystal; and
• French furniture.
The list is very long as to what enters duty free immediately. Schedule A at the back of this Guidebook is a chartis a chart setting out the Harmonized
Remedies may be pursued against Canadian retailers who do not follow the new GI rules.
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Description and Coding System’s 97 chapters and Canada’s immediate duty elimination and over-time duty reduction commitments Annex 2-A of the Canada-EU CETA. You must know the H.S. Chapter for the goods in order to read the chart and know whether the EU-origin goods that you plan to import will be duty-free immediately.
13. How does the Canada-EU CETA treat textiles and apparel goods coming into Canada?
The Canadian MFN duty rate on most textiles and apparel items is up to 18% and the Canada-EU CETA CEUT duty rate will be 0% after ratification. The Canada-EU CETA removes non-tariff barriers.
However, the rules of origin are restrictive and some textiles and appeal goods may not qualify as EU-origin. Schedule D in the back of this Guidebook provides more detailed information about rules for origin for textiles and apparel.
14. How does the Canada-EU CETA treat footwear goods coming into Canada?
The Canadian MFN duty rate on most footwear items is up to 18% and the Canada-EU CETA CEUT duty rate will be 0% after ratification. There are no quota restrictions on footwear entering Canada after implementation of the Canada-EU CETA.
However, the rules of origin are restrictive and some footwear may not qualify as EU-origin. The rule of origin for footwear requires that “sufficient production” qualifies as originating. The product specification rule of origin requires that there is “a change from any other heading, except from assemblies of uppers affixed to inner soles or to other sole components of heading 6406”. Heading 6406 requires a “change from any other heading”. If goods do not qualify as EU-origin, the MFN duty rate will be applicable.
15. How does the Canada-EU CETA treat alcoholic beverages goods coming into Canada?
The Canadian MFN duty rate on most alcohol items (wine, beer, spirits) was up to 6.5% and the Canada-EU CETA CEUT duty rate will be 0% after
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ratification (the key exception is alcohol containing 50% milk or dairy content). There are no quota restrictions on alcohol beverages.
16. How does the Canada-EU CETA treat foodstuffs coming into Canada?
The Canadian MFN duty rate on most foodstuffs was up to 6% (some MFN rates on supply managed and sensitive foodstuffs is up to 312%) and the Canada-EU CETA CEUT duty rate on most non-sensitive foodstuffs will be 0% after ratification. For example, the Canadian duty rate on chocolate was 6% and will be 0% after ratification. The Canadian duty rate on jam was up to 6% and will be 0% after ratification.
However, many rules of origin for foodstuffs are restrictive and some foodstuffs may not qualify as EU-origin. If goods do not qualify as EU-origin, the MFN duty rate will be applicable.
Canada has maintained many duties on foodstuffs. Many foodstuffs (e.g., certain cheeses, poultry, meats) are exempt from any duty elimination or reduction in the Canada-EU CETA. This means the MFN rates of duties will continue to apply. See Schedule A of this Guidebook for greater detail on which goods will be subject to immediate duty relief.
In the Canada-EU CETA, Canada maintained quota restrictions on cheese, but is increasing the quota limit to allow in more European Cheeses over a 5-year period.
On August 1, 2017, the Government of Canada announced that the EU CETA high quality cheese quota will be allocated 50% to processors and 50% to retailers and distributors. Of the 50% allocated to retailers, 30% of the EU CETA high quality cheese quota will be allocated to new entrants in the market (that is, persons without existing cheese quota allocation) (30% for the years 2017-2021, 10% in 2022 and after). In addition, the 50% of the EU CETA high quality cheese quota allocated to retailers and distributors, 30% will be allocated to small and medium sized businesses (an eligible applicant whose allocation would amount to less than 20,000 kilograms) and 20% will be allocated to large businesses. EU CETA industrial cheese quota will not be allocated to retailers and will be allocated to “further processors” (defined as “an establishment that uses cheese as an ingredient in the production of further processed food products, other than cheese, in its own provincially-licensed or federally-
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registered processing facility”). Please contact the Retail Council of Canada for additional allocation details.
For 2017, the Government of Canada will allocate 745,299 kilograms of high quality cheese quota. In 2018, the amount increases to 5,333,000 kilograms. The application deadline for 2017 CETA cheese quota is September 8, 2017. The application form can be found on the Global Affairs website. A sworn affidavit, a letter from an independent qualified professional, and information about market share and activity in cheese sales must accompany the application. In addition, the applicant must provide a monthly breakdown of their activities in the cheese sector. The 2017 CETA cheese quota allocations will be announced on October 2, 2017. Immediately after the 2017 CETA cheese quota is announced, the allocation process for 2018 CETA cheese quota will commence. The application deadline for 2018 CETA cheese quota is October 2, 2017.
Retailers who obtain an allocation of cheese quota will need to reapply every year. In addition, when a person receives EU CETA high quality cheese quota allocation, they will be required to obtain specific import permits on a shipment-by-shipment basis prior to the importation of the cheese.
The Canada-EU CETA sets out the following new cheese quotas:
Cheese Quota by the Numbers (in kilograms)
The Canada-EU CETA sets out the following new cheese quotas:
Current EU Quota Under WTO
13,500,000 High Quality Classes (16,000,000 kilograms phased over 6 years)
Yr 1 2,667,000
Yr 2 5,333,000
Yr 3 8,000,000
Yr 4 10,667,000
Yr 5 13,333,000
Yr 6 and after 16,000,000
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Cheese Quota by the Numbers (in kilograms)
The Canada-EU CETA sets out the following new cheese quotas:
Added quantity for EU high value
cheese
800,000 Industrial Cheeses (1,700 kilograms phased in over 6 years)
Yr 1 283,000
Yr 2 567,000
Yr 3 850,000
Yr 4 1,133,000
Yr 5 1,417,000
Yr 6 1,700,000
WTO Total 14,300,000
Total Cheese Quota after 5 years 32,000,000 kilograms
17. How does the Canada-EU CETA treat furniture coming into Canada?
The Canadian MFN duty rate on most furniture was up to 8% and the Canada-EU CETA CEUT duty rate on most furniture will be 0% after ratification. However, the rules of origin are restrictive and some furniture may not qualify as EU-origin. If goods do not qualify as EU-origin, the MFN duty rate will be applicable.
18. How does the Canada-EU CETA treat aromatherapy, cosmetics and skincare products coming into Canada?
The Canadian MFN duty rate on most essential oils, cosmetics and skincare was up to 6.5% and the Canada-EU CETA CEUT duty rate on
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most essential oils and cosmetics will be 0% after ratification. However, the rules of origin are restrictive and some essential oils and cosmetics may not qualify as EU-origin. If goods do not qualify as EU-origin, the MFN duty rate will be applicable.
Many essential oils, cosmetics and skincare products are in Chapter 33 of the H.S. System. The Canada-EU CETA rule of origin is rather simple if you have a single item (e.g., a lipstick) because the tariff shift rule would most likely be applicable. The rule of origin for sets of compilations may require a more detailed analysis.
19. How does the Canada-EU CETA treat e-commerce goods?
The Canada-EU CETA addresses retail opportunities in the area of ecommerce. Both Canada and the EU have agreed to not impose customs duties, fees or charges on a delivery of a computer program, text, video, image, sound recording or other delivery that is digitally encoded and transmitted by electronic means. However, internal taxes may be imposed on e-commerce goods.
20. Are goods subject to quotas or volume limits?
Some European goods are subject to Canadian import quotas pursuant to the Canada-EU CETA. Certain cheeses, textiles, and apparel are subject to import quotas.
21. Are retailers required to reduce prices if no longer paying customs duties on imported items?
There is no legal requirement in Canada for retailers to reduce prices to reflect lower duties paid at the time of importation. Each retailer can choose whether or not to pass the savings on to consumers.
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22. What documentation do I need to obtain preferential tariff rates?
The CBSA expects that at the time of importation, the importer of record has a valid certification of origin or “Origin Declaration” as it will be known in the Canada-EU context. Exporters of goods must provide and importers of goods must receive an “Origin Declaration”. This document is not the NAFTA Certificate of Origin; it is much simpler.
The Declaration must include the following:
(Period: from _____to ________)
The exporter of the products covered by this document [PUT IN A DOCUMENT NUMBER] declares that, except where otherwise clearly indicated, these products are of preferential CEUT origin.
……………………………………………………………............................ (Place and date)
...……………………………………………………………………............. (Signature and printed name of the exporter)
The Origin Declaration may be on invoices or in a separate blanket document, which covers multiple transactions.
It is important for EU exporters to provide the exporter’s customs authorization or registration number (see [PUT IN A DOCUMENT NUMBER]). The Origin Declaration may be in linguistic versions other than English or French.
The Origin Declaration is valid for 12 months from the date it is completed by the exporter or for such longer time if allowed by Canada by way of regulations.
Importers must keep origin declarations for six years (the Canada-EU CETA provides for a three years record keeping period, but Canadian law will need to be amended to shorten the record-keeping period.)
23. What documentation do I need to have import goods from the EU?
The importer also should know which documents it must receive prior to the importation of the goods and which documents it might need to provide to the CBSA or another governmental department at the time
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of importation of the goods or after the importation of the goods. This is not easy because there is no master checklist that applies to every type of good that could be imported into Canada. There isn’t one master document for everything.
Make a list of the documents you need before you start to import the goods. Are there any prescribed documents (that is, documents identified in regulations passed by the Government of Canada) applicable to the goods that you wish to import? Do you need an import permit? Do you need a certificate? Do you need a license? Do you need an approval? Are you planning on claiming a preferential duty rate (e.g., CEUT) and do you have the Certificate of Origin or evidence of origin? Do you have a properly completed invoice from the exporter/vendor for the goods?
Ask your customs broker if they require any information in order to complete the B3 “Canada Customs Coding Form”3. The B3 Form is the document that your customs broker submits to the CBSA.
Some of the common Canadian customs documents (but not an extensive list) that you should be familiar with are:
• Bills of Lading;
• Customs Cargo Control Document Form A8A (B);
• Commercial/Customs Invoice;
• B3 Form, Canada Customs Coding Form;
• Certificate of Origin;
• Import Permits;
• Health Certificates;
• CITES Permits;
• Registered Importer of Vehicles – Transport Canada form 1 (to import vehicle);
• Fumigation Certificate for Wood Packaging;
• Carnet;
• E29B form Temporary Admission Permit;
• CFIA Form 3885 Confirmation of Sale (for fruits and vegetables);
• CFIA Form 4560 Import Declaration; and
• Zoosanitary Certificate (for pet food, animal semen, processed animal products, etc.).
Please note that this list is only a selection of common documents and is not all possible documents that may be required for every good. Failure to present the required paperwork can often result in seizure of the goods by
3 http://www.cbsa-asfc.gc.ca/publications/forms-formulaires/b3-3.pdf
…there is no master checklist that applies to every type of good that could be imported into Canada.
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the CBSA or OGO, administrative monetary penalties and in certain cases your goods may be returned to the country of origin. It is costly to start over again.
In addition to documentation requirements, it is necessary to determine whether Canada has rules with respect to marking and labelling goods to be sold in Canada. EU-origin goods will be required to meet those marking and labelling requirements.
Documents relating to preferential tariff treatment, origin, marking, importation and payment entitlement must be kept for a period of six years.
24. Can I receive CETA preferential rates of duty if I import the goods from a warehouse located outside the European Union?
Canada’s free trade agreements often contain a “transshipment” restriction. What this means is that if European goods are shipped to another country before they come to Canada (e.g., the United States), they may not receive the preferential tariff rates (that is, duty free treatment).
As a general rule, the Canada-EU CETA requires that all goods be shipped directly from the EU to Canada to receive preferential tariff treatment. There is one exemption. Goods may be transhipped if (a) the good does not undergo further production in the third country (e.g., the U.S.) and (b) the good remains under customs control while outside the EU (e.g., in the U.S.).
If the warehouse (e.g., in the United States) is a bonded warehouse, the goods may be entitled to preferential tariff rates under the Canada-EU CETA.
It is best to ship goods directly from the European Union to Canada in order to benefit from the Canada-EU CETA tariff reductions.
The evidence to provide to the CBSA to receive preferential tariff treatment is a certification of origin/origin declaration and a through bill of landing in directing the shipping route and all points of shipment and transshipment prior to transportation. If the goods are shipped from a customs warehouse, the CBSA will require a copy of the customs control documents that establish that the products remained under customs control while in the third country (e.g., the U.S.) and the shipping route, including all points of shipment and transshipment.
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25. If the EU goods meet EU product standards, do I need to get approvals from the Canadian government also?
Canada’s rules with respect to product standards continue to apply. However, the Canada-EU CETA reduces administrative delays relating to certain products and for many goods eliminates expensive double testing. Canada and the EU have agreed to accept assessment certificates issued by each other for certain goods. The Protocol on the mutual acceptance of results of conformity assessment within the Canada-EU CETA sets out a process for the mutual acceptance of test results and product certificates by Canada and the EU-recognized conformity assessment bodies. Annex 1 of the Protocol lists goods that will be subject to less red tape immediately upon provisional implementation of the Canada-EU CETA:
1. Electrical and electronic equipment, including electrical installations and appliances, and related components;
2. Radio and telecommunications terminal equipment;
3. Electromagnetic compatibility (EMC);
4. Toys;
5. Construction products;
6. Machinery, including parts, components, including safety components, interchangeable equipment, and assemblies of machines;
7. Measuring instruments;
8. Hot-water boilers, including related appliances;
9. Equipment, machines, apparatus, devices, control components, protection systems, safety devices, controlling devices and regulating devices, and related instrumentation and prevention and detection systems for use in potentially explosive atmospheres (ATEX equipment);
10. Equipment for use outdoors as it relates to noise emission in the environment; and
11. Recreational craft, including their components.
Canada and the EU will continue to discuss future additions to the list, starting with medical devices including accessories, pressure equipment, appliances burning gaseous fuels, personal protective equipment and rail systems.
What this means is that if certain goods meet EU product standards, the EU certifications will be accepted by Canada. It will still be necessary for
Canada and the EU have agreed to accept assessment certificates issued by each other for certain goods.
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importers to apply for all necessary approvals, but they will not have to conduct Canadian testing and the approval process will be less onerous. For example, an EU firm that wants to sell a toy in Canada will only need to get its product tested once, in Europe, where it can already obtain a certificate valid for Canada. That will save it time and money.
26. Should I use a customs broker?
If you do not have experience importing goods into Canada, you should consider hiring a customs broker to help you. The goods will be cleared by the CBSA based on interactions with the customs broker. If you accept a courier shipment, you will pay a fee to the customs broker of the courier. It is important to note that you do not have to have a customs broker to import goods.
It is preferable to have your own customs broker facilitate the clearance of the goods. One reason for hiring a knowledgeable customs broker is that they can help you through the CBSA’s importing maze. The customs broker can help with documentation and H.S. Codes. More importantly, the customs broker will have access (using computer software) to all of your imports through that customs broker should you be audited (called a verification in customs language) by the CBSA or if you would like to make a voluntary disclosure in the future. However, Canada is not like the United States – your customs broker does not have the ability to access the CBSA database and obtain information about all of your imports using other customs brokers and goods that you imported directly. This is why it is very important to keep all your import paperwork.
The importer, and not the customs broker, is responsible to ensure the information submitted to the CBSA and other governmental departments is correct. Too many importers hire a customs broker and wrongly assume that they (the importer) are relieved from all responsibility. Do not be one of the importers who says “I don’t worry about that stuff, my customs broker takes care of it”. Importers cannot outsource responsibility. Importers cannot outsource understanding the paperwork. All an importer can do is outsource the completion and filing of paperwork. Making sure the documentation is completed properly with accurate information and is submitted to the right government department and on time remains the responsibility of the importer.
Read the fine print of any agreement you sign with your customs broker.
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27. When do I need a customs ruling?
You need an advance customs ruling if you are not sure whether the goods that you import will be considered by the CBSA to be originating in the European Union. It may be that you are not sure of the H.S. classification number of the goods. If you do not know the H.S. classification number, you cannot look up the rule of origin in the Canada-EU CETA. You might need a tariff classification ruling before you start to import goods.
28. What should Canadian retailers who sell online to Europe do to prepare for the Canada-EU CETA provisional implementation?
Canadian online retailers should update information provided to their EU customs broker or the freight forwarder or the person who clears the Canadian goods. Usually, computerized records need to be updated. Usually, the customs broker or freight forwarder maintains a database of SKUs or product codes and information about the tariff treatment. It is important to call a meeting of supply chain service providers for a “State of the Union” discussion. Everyone needs to inform you about the information that they need and you need to provide them with the information requested. Also you need to be informed of EU customs and regulatory requirements before you ship goods to the EU.
29. Can Canadian retailers benefit from preferential CETA treatment if EU-origin goods are purchased from a third country?”
Canadian importers are able to purchase EU-origin goods from distributors/warehouses located in other countries, such as the United States. If goods are purchased from a seller outside the European Union and imported from a country other than an EU Member, the Canadian importer will be able to claim CETA preferential tariff treatment only if (1) the EU-origin goods have not been further processed in the non-EU Country, and (2) the EU-origin goods were kept in a customs bonded warehouse in the non-EU country. The EU-origin must have entered a customs bonded warehouse upon entry into the country (e.g., the USA) and were not released prior to export to Canada.
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As a result, it will be important to ask the distributor/seller/warehouse whether the goods were maintained in a customs warehouse, custom bonded warehouse or similar customs controlled area if EU-origin goods are shipped to Canada from a location outside the EU. It will be important to maintain evidence, such as a written certification, that the EU-origin goods were bot further processed outside the EU and were kept in a customs warehouse. If a Canadian retailer knows that (or has concerns whether) the exporter does not have a customs bonded warehouse, further inquiries should be made before claiming CETA tariff treatment.
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Canada-EU CETA H.S. Chapters and Canada’s Commitments to Reduce Customs Duties
H.S. Chapter Description
2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
1 Live animals Up to 238% Some items duty free immediately
Some items excluded from duty relief
2 Meat and edible meat offal Up to 249% Some items duty free immediately
Some items excluded from duty relief
3 Fish and crustaceans, molluscs and other aquatic invertebrates
Up to 5% Entire Chapter is duty free immediately
4 Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not elsewhere specified or included
Up to 313.5%
Some items duty free immediately
Some items excluded from duty relief
Some items subject to Staging Category A
5 Products of animal origin, not elsewhere specified or included
Free Entire Chapter is duty free
6 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage
Up to 16% Some items duty free immediately
Some items subject to Staging Category B
7 Edible vegetables and certain roots and tubers
Up to $10.31/kg Entire Chapter is duty free immediately
8 Edible fruit and nuts; peel of citrus fruit or melons
Up to 14.5% Entire Chapter is duty free immediately
9 Coffee, tea, maté and spices Up to 3% Entire Chapter is duty free immediately
10 Cereals Up to 94.5% Some items duty free immediately
Some items subject to Staging Category C
SCHEDULE A
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H.S. Chapter Description
2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
11 Products of the milling industry; malt; starches; inulin; wheat gluten
Up to $397.30/tonne
Some items duty free immediately
Some items subject to Staging Category C
12 Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder
Up to 10% Entire Chapter is duty free immediately
13 Lac; gums, resins and other vegetable saps and extracts
Free Entire Chapter is duty free
14 Vegetable plaiting materials; vegetable products not elsewhere specified or included
Free Entire Chapter is duty free
15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes
Up to 218%
Some items duty free immediately
Some items excluded from duty relief
16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates
Up to 253% Some items duty free immediately
Some items excluded from duty relief
17 Sugars and sugar confectionery Up to $30.86/tonne
Some items duty free immediately
Some items subject to Staging Category S
18 Cocoa and cocoa preparations Up to 265% Some items duty free immediately
Some items excluded from duty relief
19 Preparations of cereals, flour, starch or milk; pastrycooks’ products
Up to 267.5% Some items duty free immediately
Some items excluded from duty relief
20 Preparations of vegetables, fruit, nuts or other parts of plants
Up to 17% Entire Chapter is duty free immediately
21 Miscellaneous edible preparations Up to 277% Some items duty free immediately
Some items excluded from duty relief
22 Beverages, spirits and vinegar Up to 11% Some items duty free immediately
Some items excluded from duty relief
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CANADA-EU CETA: H.S. CHAPTERS AND CANADA’S COMMITMENTS TO REDUCE CUSTOMS DUTIESSCHEDULE A.
H.S. Chapter Description
2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
23 Residues and waste from the food industries; prepared animal fodder
Up to 205.5% Some items duty free immediately
Some items excluded from duty relief
24 Tobacco and manufactured tobacco substitutes
Up to 13% Entire Chapter is duty free immediately
25 Salt; sulphur; earths and stone; plastering materials, lime and cemen
Up to 2.5% Entire Chapter is duty free immediately
26 Ores, slag and ash Free Entire Chapter is duty free immediately
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes
Up to 12.5% Entire Chapter is duty free immediately
28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes
Up to 6.5% Entire Chapter is duty free immediately
29 Organic chemicals Free Entire Chapter is duty free
30 Pharmaceutical products Up to 6.5% Entire Chapter is duty free immediately
31 Fertilizers Free Entire Chapter is duty free
32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks
Up to 6.5% Entire Chapter is duty free immediately
33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations
Up to 8% Entire Chapter is duty free immediately
34 Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, “dental waxes” and dental preparations with a basis of plaster
Up to 6.5% Entire Chapter is duty free immediately
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H.S. Chapter Description
2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
35 Albuminoidal substances; modified starches; glues; enzymes
Up to 270% Some items duty free immediately
Some items excluded from duty relief
36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations
Up to 6.5% Entire Chapter is duty free immediately
37 Photographic or cinematographic goods
Up to 6.5% Entire Chapter is duty free immediately
38 Miscellaneous chemical products Up to 15.5% Entire Chapter is duty free immediately
39 Plastics and articles thereof Up to 6.5% Entire Chapter is duty free immediately
40 Rubber and articles thereof Up to 15.5% Entire Chapter is duty free immediately
41 Raw hides and skins (other than furskins) and leather
Free Entire Chapter is duty free
42 Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut)
Up to 15.5% Entire Chapter is duty free immediately
43 Furskins and artificial fur; manufactures thereof
Up to 15.5% Entire Chapter is duty free immediately
44 Wood and articles of wood; wood charcoal
Up to 9.5% Entire Chapter is duty free immediately
45 Cork and articles of cork Free Entire Chapter is duty free
46 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork
Up to 11% Entire Chapter is duty free immediately
47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard
Free Entire Chapter is duty free
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CANADA-EU CETA: H.S. CHAPTERS AND CANADA’S COMMITMENTS TO REDUCE CUSTOMS DUTIESSCHEDULE A.
H.S. Chapter Description
2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
48 Paper and paperboard; articles of paper pulp, of paper or of paperboard
Free Entire Chapter is duty free
49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans
Free Entire Chapter is duty free
50 Silk Free Entire Chapter is duty free
51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric
Free Entire Chapter is duty free
52 Cotton Up to 8% Entire Chapter is duty free immediately
53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn
Free Entire Chapter is duty free
54 Man-made filaments; strip and the like of man-made textile materials
Up to 8% Entire Chapter is duty free immediately
55 Man-made staple fibres Up to 8% Entire Chapter is duty free immediately
56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof
Up to 16% Entire Chapter is duty free immediately
57 Carpets and other textile floor coverings
Up to 14% Entire Chapter is duty free immediately
58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery
Free Entire Chapter is duty free
59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use
Up to 18% Entire Chapter is duty free immediately
60 Knitted or crocheted fabrics Free Entire Chapter is duty free
61 Articles of apparel and clothing accessories, knitted or crocheted
Up to 18% Entire Chapter is duty free immediately
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H.S. Chapter Description
2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
62 Articles of apparel and clothing accessories, not knitted or crocheted
Up to 18% Entire Chapter is duty free immediately
63 Other made up textile articles; sets; worn clothing and worn textile articles; rags
Up to 18% Entire Chapter is duty free immediately
64 Footwear, gaiters and the like; parts of such articles
Up to 20% Entire Chapter is duty free immediately
65 Headgear and parts thereof Up to 15.5% Entire Chapter is duty free immediately
66 Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof
Up to 7.5% Entire Chapter is duty free immediately
67 Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair
Up to 15.5% Entire Chapter is duty free immediately
68 Articles of stone, plaster, cement, asbestos, mica or similar materials
Up to 15.5% Entire Chapter is duty free immediately
69 Ceramic products Up to 8% Entire Chapter is duty free immediately
70 Glass and glassware Up to 6.5% Entire Chapter is duty free immediately
71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof; imitation jewelry; coin
Up to 8.5% Entire Chapter is duty free immediately
72 Iron and steel Free Entire Chapter is duty free
73 Articles of iron or steel Up to 8% Entire Chapter is duty free immediately
74 Copper and articles thereof Up to 9.5% Entire Chapter is duty free immediately
75 Nickel and articles thereof Up to 3% Entire Chapter is duty free immediately
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CANADA-EU CETA: H.S. CHAPTERS AND CANADA’S COMMITMENTS TO REDUCE CUSTOMS DUTIESSCHEDULE A.
H.S. Chapter Description
2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
76 Aluminum and articles thereof Up to 6.5% Entire Chapter is duty free immediately
77 (reserved for possible future use)
78 Lead and articles thereof Free Entire Chapter is duty free
79 Zinc and articles thereof Up to 3% Entire Chapter is duty free immediately
80 Tin and articles thereof Up to 3% Entire Chapter is duty free immediately
81 Other base metals; cermets; articles thereof
Free Entire Chapter is duty free
82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal
Up to 11% Entire Chapter is duty free immediately
83 Miscellaneous articles of base metal Up to 7% Entire Chapter is duty free immediately
84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof
Up to 9% Entire Chapter is duty free immediately
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles
Up to 9% Entire Chapter is duty free immediately
86 Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds
Up to 11%
Entire Chapter is duty free immediately
87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof
Up to 13% Some items duty free immediately
Some items subject to Staging Categories B, C and D
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CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
H.S. Chapter Description
2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
88 Aircraft, spacecraft, and parts thereof Up to 15.5% Entire Chapter is duty free immediately
89 Ships, boats and floating structures Up to 25% Some items duty free immediately
Some items subject to Staging Categories B and D
90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof
Up to 8.5% Entire Chapter is duty free immediately
91 Clocks and watches and parts thereof Up to 14% Entire Chapter is duty free immediately
92 Musical instruments; parts and accessories of such articles
Up to 7% Entire Chapter is duty free immediately
93 Arms and ammunition; parts and accessories thereof
Up to 7.5% Entire Chapter is duty free immediately
94 Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings
Up to 15.5% Entire Chapter is duty free immediately
95 Toys, games and sports requisites; parts and accessories thereof
Up to 8% Entire Chapter is duty free immediately
96 Miscellaneous manufactured articles Up to 8% Entire Chapter is duty free immediately
97 Works of art, collectors’ pieces and antiques
Up to 7% Entire Chapter is duty free immediately
32CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
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CANADA-EU CETA: H.S. CHAPTERS AND CANADA’S COMMITMENTS TO REDUCE CUSTOMS DUTIESSCHEDULE A.
Geographic Indications in the Canada-EU CETA
Foodstuffs Category Protected Geographic Indication Place of Origin
Beer České pivo Czech Republic
Cereals Riso Nano Vialone Veronese Italy
Cheese Hessischer Handkäse Germany
Hessischer Handkäs Germany
Danablu Denmark
Φέτα / Feta Greece
Κεφαλογραβιέρα / Kefalograviera Greece
Γραβιέρα Κρήτης / Graviera Kritis Greece
Γραβιέρα Νάξου / Graviera Naxou Greece
Μανούρι / Manouri Greece
Κασέρι Greece
Mahón-Menorca Spain
Queso Manchego Spain
Comté France
Reblochon France
Reblochon de Savoie France
Roquefort France
Camembert de Normandie France
Brie de Meaux France
Emmental de Savoie France
Morbier France
Epoisses France
Beaufort France
Maroilles France
Marolles France
Munster France
Munster Géromé France
SCHEDULE B
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Foodstuffs Category Protected Geographic Indication Place of Origin
Cheese (continued) Fourme d’Ambert France
Abondance France
Bleu d’Auvergne France
Livarot France
Cantal France
Fourme de Cantal France
Cantalet France
Petit Cantal France
Tomme de Savoie France
Pont - L’Evêque France
Neufchâtel France
Chabichou du Poitou France
Crottin de Chavignol France
Saint-Nectaire France
Provolone Valpadana Italy
Taleggio Italy
Asiago Italy
Fontina Italy
Gorgonzola Italy
Grana Padano Italy
Mozzarella di Bufala Campana Italy
Parmigiano Reggiano Italy
Pecorino Romano Italy
Pecorino Sardo Italy
Pecorino Toscano Italy
Queijo S. Jorge Portugal
Queijo Serra da Estrela Portugal
Queijos da Beira Baixa Portugal
Queijo de Castelo Branco Portugal
34CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
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GEOGRAPHIC INDICATIONS IN THE CANADA-EU CETASCHEDULE B.
Foodstuffs Category Protected Geographic Indication Place of Origin
Cheese (continued) Queijo Amarelo da Beira Baixa Portugal
Queijo Picante da Beira Baixa Portugal
Gouda Holland Netherlands
Edam Holland Netherlands
Confectionary and baked goods
Aachener Printen Germany
Nürnberger Lebkuchen Germany
Lübecker Marzipan Germany
Bremer Klaben Germany
Λουκούμι Γεροσκήπου / Loukoumi Geroskipou Greece
Jijona Spain
Turrón de Alicante Spain
Ricciarelli di Siena Italy
Dry-cured meats Jambon de Bayonne France
Prosciutto di Parma Italy
Prosciutto di S. Daniele Italy
Prosciutto Toscano Italy
Prosciutto di Modena Italy
Essential Oils Huile essentielle de lavande de Haute-Provence France
Fresh, Frozen and Processed Fish Products
Huîtres de Marennes-Oléron France
Kalix Löjrom Sweden
Fresh and processed fruits and nuts
Cítricos Valencianos Spain
Cîtrics Valancians Spain
Pruneaux d’Agen France
Pruneaux d’Agen mi-cuits France
Arancia Rossa di Sicilia Italy
Cappero di Pantelleria Italy
Kiwi Latina Italy
Mela Alto Adige Italy
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Foodstuffs Category Protected Geographic Indication Place of Origin
Fresh and processed fruits and nuts (continued)
Südtiroler Apfel Italy
Pesca e nettarina di Romagna Italy
Pêra Rocha do Oeste Portugal
Ameixa d’Elvas Portugal
Ananás dos Açores / S. Miguel Portugal
Magiun de prune Topoloveni Romania
Fresh, frozen and processed meats
Nürnberger Bratwürste Germany
Nürnberger Rostbratwürste Germany
Schwarzwälder Schinken Germany
Guijuelo Spain
Jamón de Huelva Spain
Jamón de Teruel Spain
Salchichón de Vic Spain
Llonganissa de Vic Spain
Canards à foie gras du Sud-Ouest: Chalosse France
Canards à foie gras du Sud-Ouest: Gascogne France
Canards à foie gras du Sud-Ouest: Gers France
Canards à foie gras du Sud-Ouest: Landes France
Canards à foie gras du Sud-Ouest: Périgord France
Canards à foie gras du Sud-Ouest: Quercy France
Cotechino Modena Italy
Zampone Modena Italy
Bresaola della Valtellina Italy
Mortadella Bologna Italy
Speck Alto Adige Italy
Südtiroler Markenspeck Italy
Südtiroler Speck Italy
Culatello di Zibello Italy
36CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
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GEOGRAPHIC INDICATIONS IN THE CANADA-EU CETASCHEDULE B.
Foodstuffs Category Protected Geographic Indication Place of Origin
Fresh, frozen and processed meats (continued)
Garda Italy
Lardo di Colonnata Italy
Szegedi téliszalámi Hungary
Szegedi szalámi Hungary
Tiroler Speck Austria
Chouriça de carne de Vinhais Portugal
Linguiça de Vinhais Portugal
Chouriço de Portalegre Portugal
Presunto de Barrancos Portugal
Salpicão de Vinhais Portugal
Fresh, frozen and processed vegetables
Spreewälder Gurken Germany
Φασόλια Γίγαντες Ελέφαντες Καστοριάς / Fassolia Gigantes Elefantes Kastorias
Greece
Φασόλια Γίγαντες Ελέφαντες Πρεσπών Φλώρινας / Fassolia Gigantes Elefantes Prespon Florinas
Greece
Lentille verte du Puy France
Lenticchia di Castelluccio di Norcia Italy
Pomodoro di Pachino Italy
Radicchio Rosso di Treviso Italy
Steirischer Kren Austria
Hops Žatecký Chmel Czech Republic
Hopfen aus der Hallertau Germany
Tettnanger Hopfen Germany
Natural gums and resins Μαστίχα Χίου / Masticha Chiou Greece
Oils and animal fats Ελαιόλαδο Καλαμάτας / Kalamata olive oil Greece
Ελαιόλαδο Κολυμβάρι Χανίων Κρήτης / Kolymvari Chanion Kritis Olive Oil
Greece
Ελαιόλαδο Σητείας Λασιθίου Κρήτης / Sitia Lasithiou Kritis Olive oil
Greece
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Foodstuffs Category Protected Geographic Indication Place of Origin
Ελαιόλαδο Λακωνία / Olive Oil Lakonia Greece
Baena Spain
Oils and animal fats (continued)
Sierra Mágina Spain
Aceite del Baix Ebre-Montsía Spain
Oli del Baix Ebre-Montsía Spain
Aceite del Bajo Aragón Spain
Antequera Spain
Priego de Córdoba Spain
Sierra de Cádiz Spain
Sierra de Segura Spain
Sierra de Cazorla Spain
Siurana Spain
Aceite de Terra Alta Spain
Oli de Terra Alta Spain
Les Garrigues Spain
Estepa Spain
Huile d’olive de Haute-Provence France
Veneto Valpolicella Italy
Veneto Euganei e Berici Italy
Veneto del Grappa Italy
Azeite de Moura Portugal
Azeites de Trás-os-Montes Portugal
Azeite do Alentejo Interior Portugal
Azeites da Beira Interior Portugal
Azeites do Norte Alentejano Portugal
Azeites do Ribatejo Portugal
Oilseeds Steirisches Kürbiskernöl Austria
Spices Κρόκος Κοζάνης / Krokos Kozanis Greece
38CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
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GEOGRAPHIC INDICATIONS IN THE CANADA-EU CETASCHEDULE B.
Foodstuffs Category Protected Geographic Indication Place of Origin
Azafrán de la Mancha Spain
Piment d’Espelette France
Table and processed olives Ελιά Καλαμάτας / Elia Kalamatas Greece
Κονσερβολιά Αμφίσσης / Konservolia Amfissis Greece
Vinegar Aceto balsamico Tradizionale di Modena Italy
Aceto balsamico di Modena Italy
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CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
European Union
H.S. Chapter Description What EU’s Schedule Says
1 Live animals Some items duty free immediately
Some items excluded from duty relief
2 Meat and edible meat offal Most protected chapter in EU Schedule
Many items excluded from duty relief
Some items in Staging Categories B (4 years duty reduction), and D (8 years duty reduction)
Few items duty free immediately
3 Fish and crustaceans, molluscs and other aquatic invertebrates
Many items excluded from duty relief
Some items in Staging Categories B (4 years duty reduction), C (6 years duty reduction) and D (8 years duty reduction)
Few items duty free immediately
4 Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not elsewhere specified or included
Many items excluded from duty relief
Few items duty free immediately
5 Products of animal origin, not elsewhere specified or included
Entire Chapter is duty free immediately
6 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage
Entire Chapter is duty free immediately
7 Edible vegetables and certain roots and tubers Some items in AVO+EP4 staging category
Some items duty free immediately upon implementation
8 Edible fruit and nuts; peel of citrus fruit or melons Some items in AVO+EP staging category
Some items duty free immediately upon implementation
9 Coffee, tea, maté and spices Entire Chapter is duty free immediately
SCHEDULE C
4 The AV0+EP tariff reduction commitment is to eliminate upon entry into force of the Canada-EU CETA the ad valorem component of the customs duties. However, the specific duty resulting from the European Union’s entry price system will be maintained.
40CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
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H.S. Chapter Description What EU’s Schedule Says
10 Cereals Some items in Staging Category D (8 years duty reduction)
Many items duty free immediately
11 Products of the milling industry; malt; starches; inulin; wheat gluten
Some items in Staging Category D (8 years duty reduction)
Many items duty free immediately
12 Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder
Entire Chapter is duty free immediately
13 Lac; gums, resins and other vegetable saps and extracts
Entire Chapter is duty free immediately
14 Vegetable plaiting materials; vegetable products not elsewhere specified or included
Entire Chapter is duty free immediately
15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes
Entire Chapter is duty free immediately
16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates
Some items duty free immediately
Some items in Staging Categories C (6 years duty reduction) and D (8 years duty reduction)
17 Sugars and sugar confectionery Some items duty free immediately
Some items in Staging Category D (8 years duty reduction)
18 Cocoa and cocoa preparations Entire Chapter is duty free immediately
19 Preparations of cereals, flour, starch or milk; pastrycooks’ products
Entire Chapter is duty free immediately
20 Preparations of vegetables, fruit, nuts or other parts of plants
Some items duty free immediately
Sweetcorn is excluded from duty relief
Some items in AVO+EP staging category
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CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
EUROPEAN UNIONSCHEDULE C.
H.S. Chapter Description What EU’s Schedule Says
21 Miscellaneous edible preparations Entire Chapter is duty free immediately
22 Beverages, spirits and vinegar Some items duty free immediately
Some items in AVO+EP staging category
23 Residues and waste from the food industries; prepared animal fodder
Entire Chapter is duty free immediately
24 Tobacco and manufactured tobacco substitutes Entire Chapter is duty free immediately
25 Salt; sulphur; earths and stone; plastering materials, lime and cemen
Entire Chapter is duty free immediately
26 Ores, slag and ash Entire Chapter is duty free immediately
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes
Entire Chapter is duty free immediately
28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes
Entire Chapter is duty free immediately
29 Organic chemicals Entire Chapter is duty free immediately
30 Pharmaceutical products Entire Chapter is duty free immediately
31 Fertilizers Entire Chapter is duty free
32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks
Entire Chapter is duty free immediately
33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations
Entire Chapter is duty free immediately
34 Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, “dental waxes” and dental preparations with a basis of plaster
Entire Chapter is duty free immediately
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EUROPEAN UNIONSCHEDULE C.
H.S. Chapter Description What EU’s Schedule Says
35 Albuminoidal substances; modified starches; glues; enzymes
Entire Chapter is duty free immediately
36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations
Entire Chapter is duty free immediately
37 Photographic or cinematographic goods Entire Chapter is duty free immediately
38 Miscellaneous chemical products Entire Chapter is duty free immediately
39 Plastics and articles thereof Entire Chapter is duty free immediately
40 Rubber and articles thereof Entire Chapter is duty free immediately
41 Raw hides and skins (other than furskins) and leather
Entire Chapter is duty free
42 Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut)
Entire Chapter is duty free immediately
43 Furskins and artificial fur; manufactures thereof Entire Chapter is duty free immediately
44 Wood and articles of wood; wood charcoal Entire Chapter is duty free immediately
45 Cork and articles of cork Entire Chapter is duty free immediately
46 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork
Entire Chapter is duty free immediately
47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard
Entire Chapter is duty free immediately
48 Paper and paperboard; articles of paper pulp, of paper or of paperboard
Entire Chapter is duty free immediately
49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans
Entire Chapter is duty free immediately
50 Silk Entire Chapter is duty free immediately
51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric
Entire Chapter is duty free immediately
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CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
H.S. Chapter Description What EU’s Schedule Says
52 Cotton Entire Chapter is duty free immediately
53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn
Entire Chapter is duty free immediately
54 Man-made filaments; strip and the like of man-made textile materials
Entire Chapter is duty free immediately
55 Man-made staple fibres Entire Chapter is duty free immediately
56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof
Entire Chapter is duty free immediately
57 Carpets and other textile floor coverings Entire Chapter is duty free immediately
58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery
Entire Chapter is duty free immediately
59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use
Entire Chapter is duty free immediately
60 Knitted or crocheted fabrics Entire Chapter is duty free immediately
61 Articles of apparel and clothing accessories, knitted or crocheted
Entire Chapter is duty free immediately
62 Articles of apparel and clothing accessories, not knitted or crocheted
Entire Chapter is duty free immediately
63 Other made up textile articles; sets; worn clothing and worn textile articles; rags
Entire Chapter is duty free immediately
64 Footwear, gaiters and the like; parts of such articles Entire Chapter is duty free immediately
65 Headgear and parts thereof Entire Chapter is duty free immediately
66 Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof
Entire Chapter is duty free immediately
67 Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair
Entire Chapter is duty free immediately
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EUROPEAN UNIONSCHEDULE C.
H.S. Chapter Description What EU’s Schedule Says
68 Articles of stone, plaster, cement, asbestos, mica or similar materials
Entire Chapter is duty free immediately
69 Ceramic products Entire Chapter is duty free immediately
70 Glass and glassware Entire Chapter is duty free immediately
71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof; imitation jewelry; coin
Entire Chapter is duty free immediately
72 Iron and steel Entire Chapter is duty free immediately
73 Articles of iron or steel Entire Chapter is duty free immediately
74 Copper and articles thereof Entire Chapter is duty free immediately
75 Nickel and articles thereof Entire Chapter is duty free immediately
76 Aluminum and articles thereof Entire Chapter is duty free immediately
77 (reserved for possible future use)
78 Lead and articles thereof Entire Chapter is duty free immediately
79 Zinc and articles thereof Entire Chapter is duty free immediately
80 Tin and articles thereof Entire Chapter is duty free immediately
81 Other base metals; cermets; articles thereof Entire Chapter is duty free immediately
82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal
Entire Chapter is duty free immediately
83 Miscellaneous articles of base metal Entire Chapter is duty free immediately
84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof
Entire Chapter is duty free immediately
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H.S. Chapter Description What EU’s Schedule Says
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles
Entire Chapter is duty free immediately
86 Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds
Entire Chapter is duty free immediately
87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof
Some items duty free immediately
Some items in Staging Categories C (6 years duty reduction) and D (8 years duty reduction)
88 Aircraft, spacecraft, and parts thereof Entire Chapter is duty free immediately
89 Ships, boats and floating structures Entire Chapter is duty free immediately
90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof
Entire Chapter is duty free immediately
91 Clocks and watches and parts thereof Entire Chapter is duty free immediately
92 Musical instruments; parts and accessories of such articles
Entire Chapter is duty free immediately
93 Arms and ammunition; parts and accessories thereof
Entire Chapter is duty free immediately
94 Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings
Entire Chapter is duty free immediately
95 Toys, games and sports requisites; parts and accessories thereof
Entire Chapter is duty free immediately
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EUROPEAN UNIONSCHEDULE C.
H.S. Chapter Description What EU’s Schedule Says
96 Miscellaneous manufactured articles Entire Chapter is duty free immediately
97 Works of art, collectors’ pieces and antiques Entire Chapter is duty free immediately
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CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
The Canada-EU CETA Rules of Origin For Textiles and Apparel are More Flexible for Canadian Importers
The Canada-EU CETA contains 8 rules of relevance to those interested in textile and apparel goods:
1. Canada’s schedule of commitments (Annex 2-A) immediately eliminates Canadian customs duties on all textile and apparel goods originating in the European Union. Currently, certain textiles and apparel goods are subject to up to %18 MFN duties upon importation into Canada. The cost of importing EU-origin textiles and apparel goods will decrease. If the cost savings are passed on to consumers, then demand may increase for EU-origin textiles and apparel goods. Further, it may be that a U.S. equivalent good is not duty free due to more restrictive NAFTA rules of origin. As a result, EU-origin textile and apparel goods may be cheaper than U.S.-origin goods.
2. The CETA rules of origin are more flexible than the NAFTA rules of origin. The Protocol on rules of origin and origin procedures sets out the product-specific rules of origin. You must know the H.S. classification number in order to find the appropriate rule of origin.
3. Annex 1 of the Protocol on rules of origin and origin procedures contains special rules of origin to apply when applying the product specific rules of origin. Certain non-originating materials may be disregarded in applying textile and apparel rules of origin. Article 2 of Annex 1 of the Protocol on rules of origin and origin procedures states:
“For greater certainty, non-originating materials of Chapter 1 through 49 or 64 through 97, including materials that contain textiles, may be disregarded for the purpose of determining whether all the non-originating materials used in the production of a product of Chapter 50 through 63 satisfies the applicable rule of origin set out in Annex 5.”
4. The CETA rules of origin are primarily based upon a double transformation principle. The double transformation principle is understood to mean, in simple terms, that weaving and sewing, plus all subsequent manufacturing stages must be carried out in the beneficiary country in order to be considered to be originating. Annex 6 of the Protocol on rules of origin and origin procedures contains the
SCHEDULE D
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Joint declaration concerning rules or origin for textiles and apparel. Article 1 of Annex 6 states:
“Under [CETA], trade in textiles and apparel between the Parties is based on the principle that double transformation confers origin, as reflected in Annex 5 (Product-specific rules of origin) of the Protocol on rules of origin and origin procedures.”
5. The rules of origin include origin quotas for textiles and apparel. Article 2 of Annex 6 of the Protocol on rules of origin and origin procedures – the Joint declaration concerning rules of origin for textiles and apparel provides for limited, reciprocal origin quotas for textiles and apparel. These origin quotas are expressed in terms of volumes classified by product category, and include considering dyeing as equivalent to printing, for a limited and clearly identified range of product categories. Tables C.1, C.2, C.3 and C.4 of Annex 5 of the Protocol on rules of origin and origin procedure set out the origin quotas applicable for imports of EU textiles and apparel into Canada. The origin quotas, which are exceptional, will be applied in strict adherence to the Protocol on rules of origin and origin procedures.
• Table C.3 applies to certain textiles imported into Canada under H.S. Classification Chapters 50, 51, 52, 54, 56, 57, 59 and 63.
• Table C.4 applies to certain apparel goods imported into Canada under H.S. Classification Chapters 61 and 62.
6. The origin quotas for textiles and apparel will be increased as needed. For each of the products listed in Tables C.1, C.2, C.3 and C.4, if more than 80 per cent of an origin quota assigned to a product is used during a calendar year, the origin quota allocation will be increased for the following calendar year. The increase will be 3 per cent of the origin quota assigned to the product in the previous calendar year. The growth provision will apply for the first time after the expiry of the first complete calendar year following the entry into force of this Agreement. The annual origin quota allocations may be increased during a period of up to ten years. Any increase in the origin quota volume will be implemented in the first quarter of the subsequent calendar year.
The CETA rules of origin for textiles remain complicated – but, they are significantly less complicated than the fibre-forward, yard-forward and
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THE CANADA-EU CETA RULES OF ORIGIN FOR TEXTILES AND APPAREL ARE MORE FLEXIBLE FOR CANADIAN IMPORTERSSCHEDULE D.
fabric-forward rules of origin in NAFTA. It will be necessary to review the CETA rules on a textile-by-textile, apparel-by-apparel basis to see what opportunities may be pursued by Canadian importers.
7. The certifications of origin on EU-origin goods may result in lower Canada Border Services Agency (“CBSA”) reassessment risk.
8. The Canada-EU CETA does not contain geographic indications relating to textiles and apparel goods.
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THE CANADA-EU CETA RULES OF ORIGIN FOR TEXTILES AND APPAREL ARE MORE FLEXIBLE FOR CANADIAN IMPORTERSSCHEDULE D.
CETA Decision Tree
SCHEDULE E
What type of good coming from the EU will you import into Canada?
Do you know the H.S. Classification Number?
YES
Is the H.S. Classification number listed in Canadian Schedule of Duty Relief in annex 2-A of the Canada-EU CETA?
The good is not duty free immediately
Do you know the CETA Rule of Origin?
Good News – the good is duty-free immediately upon provisional implementation
The good is subject to the MFN rate of duty
NO
YES NO
YES NO
YES NO
Foodstu�sTextiles/Apparel Cosmetics Flowers OtherToys
Determine the H.S.Classification Number
Is the good originating? Determines the Rule of Origin
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CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
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