Free Trade Agreements And The Certificate Of Origin
Free Trade Agreements can save importers and exporters money on import duties and give a business a competitive advantage. More and more companies are moving their products around the world and maximizing the benefits available to them through Free Trade Agreements.
Canada has free trade agreements with more than 40 countries and entered into 14 Free Trade Agreements (FTAs). The North American Free Trade Agreement (NAFTA) now the Canada United States Mexico Agreement (CUSMA) created the largest free trade region in the world.
Canada has in addition to CUSMA two other significant multilateral trade agreements; the Comprehensive Economic and Trade Agreement (CETA) with the European Union and the eleven nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with ten other Pacific Rim countries. Canada is currently the only G7 country to have free trade agreements in force with all other G7 countries.
A benefit of a FTA is to reduce or eliminate the duty of the product being imported. The origin of the goods determines the rate of duty payable on imported items. Origin is represented by a tariff treatment. Goods may be entitled to a tariff treatment if they meet specific requirements such as rules of origin, proof of origin requirements, shipping requirements and any other terms and conditions contained in the FTA.
Claims for a preferential tariff treatment under a FTA normally must be supported by the proof of origin required by the FTA. CBSA states the FTA may require one of the following:
- A certificate of origin in a prescribed format
- An exporter’s statement of origin
- An origin declaration
- A certification of origin containing minimum data elements in non prescribed format
NAFTA (which is still in force until CUSMA is ratified by the Canadian Government) requires a prescribed Certificate of Origin certified by the exporter/producer to benefit from the NAFTA preferential origin treatment for eligible originating products. CUSMA will streamline the certification of origin process by eliminating a prescribed format for a certificate with an origin declaration. Another big change is that the importer can certify the origin.
CPTPP does not require a prescribed certificate of origin. Instead, the importer must provide a minimum of nine data elements on their import documents. Refer to How To Claim CPTPP? for more information on the nine data elements. In addition, the importer, exporter or producer can certify the origin.
CETA does not require a prescribed certificate of origin. Preferential treatment is based on a declaration. The origin declaration can be on the invoice or any other document in the import submission. The declaration should contain all the information noted at What Is CETA? The declaration must be certified by the exporter.
For a summary of the required proof of origin and who may certify the origin of the goods for each of Canada”s Free Trade Agreements (FTAs) take a look at Origin of goods.
For more information on Free Trade Agreements take a look at Enjoy Duty Free Imports With A Free Trade Agreement.
Information or clarification on Canada Free Trade Agreements and the requirements to claim a preferential duty treatment speak with one of our Trade Advisor.
Updated: The Free Trade Agreement between Canada - US - Mexico, also known as CUSMA/USMCA/T-MEC has been implemented. Please visit our NAFTA 2.0 series for more information.