Duty Rates Increase For Imports From Several GPT Countries

Effective January 1, 2015, the Canadian Government intends to withdraw eligibility to the General Preferential Tariff (GPT) from 72 higher-income and trade competitive countries (out of current 175 beneficiaries), including China, South Korea, India and Brazil.  Of the 72 countries affected by this change 20 have preferential tariff with Canada though other trade agreements.

Entitlement to the benefit of the General Preferential Tariff is withdrawn in respect of all goods that originate in the following countries, effective January 1, 2015.

List Of Countries Affected:

Algeria, American Samoa, Antigua and Barbuda, Antilles, Netherlands, Argentina, Azerbaijan, Bahamas, Bahrain, Barbados, Bermuda, Bosnia and Herzegovina, Botswana, Brazil, Brunei, Cayman Islands, Chile, China, Colombia, Costa Rica, Croatia, Cuba, Dominica, Dominican Republic, Ecuador, Equatorial Guinea, French Polynesia, Gabon, Gibraltar, Grenada, Guam, Hong Kong, India, Indonesia, Iran, Israel, Jamaica, Jordan, Kazakhstan, Kuwait, Lebanon, Macao, Macedonia, Malaysia, Maldives, Mariana Islands, Mauritius, Mexico, Namibia, New Caledonia and Dependencies, Oman, Palau, Panama, Peru, Qatar, Russia, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Seychelles, Singapore, South Africa, South Korea, Suriname, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turks and Caicos Islands, United Arab Emirates, Uruguay, Venezuela and Virgin Islands, U.S.A.

Least Developed Country Tariff (LDCT):  

Entitlement to the benefit of the Least Developed Country Tariff is withdrawn effective January 1, 2015 in respect of all goods that originate in Equatorial Guinea and Maldives.

Impact On Importers:

If you import goods from any of the countries listed above, the withdrawal of eligibility could increase the amount of duties payable upon import into Canada. Goods that are in transit to Canada prior to January 1, 2015 are exempt from the withdrawal order.

Advice For Importers:

Importers will want to use the coming months before this regulation is in effect to their advantage by preparing themselves and leveraging any duty savings that may still be available. It is highly recommended that you consult with your customs broker before placing orders, to understand how duties are impacted by this regulation change in 2015.

Need More Information?

If have questions about the GPT or LDCT  tariff treatment and need more information,  Pacific Customs Brokers offers trade compliance consulting. Our Trade Compliance Specialists will work with you to assess how these changes may affect your imports.

If you are a current client and are unsure of how these regulation updates affect your business, please contact us and we'd be happy to discuss this with you.

Background:

In the early 1970s, the United Nations recommended that developed countries grant non-reciprocal tariff preferences to imports from developing countries under a Generalized System of Preferences in an effort to promote the industrialization of developing countries. Most major developed countries offer such regimes. Canada's regime, the General Preferential Tariff (GPT), was established in 1974 and offers tariff rates that are lower than Most-Favoured-Nation (MFN) tariff rates for imports from developing countries, with the aim of promoting economic growth and export diversification in developing countries.

Canada's  Economic Action Plan 2013 announced that the Government would modernize Canada's GPT regime by removing benefits from 72 higher-income and trade-competitive countries, effective January 1, 2015.

Proposed Changes to the General Preferential Tariff Regime