It was June 2007 when we first started hearing talk of the possibility of a trade agreement between Canada and the European Union. With the European Union being one of Canada’s largest trade partners, second only to the United States, many importers have been eagerly awaiting this trade agreement to become a reality.
At last, on September 21, 2017, the Canada-European Union Comprehensive Economic Trade Agreement (CETA) was provisionally implemented.
CETA allows for the immediate duty-free status of 98% of tariff items, with an additional 1% becoming duty-free over the next 7 years.
As is common in Canadian Trade Agreements, the usual direct shipment and transshipment rules apply. When it comes to qualifying goods for CETA, the Rules of Origin are based on HS classification, reinforcing the need to maintain a valid classification database. CETA also contains the term Tolerance, which is similar to NAFTA’s De-Minimis but is more favorable at 10% compared to NAFTA’s 7%.
CETA’s Proof of Origin requirements set it apart from just about every other Canadian Free Trade Agreement currently in force. Proof of Origin is required in the form of an origin declaration provided by the Exporter on an invoice or any other commercial document. While it is not uncommon for an exporter’s origin declaration to be used as Proof of Origin for a Free Trade Agreement, CETA allows for blanket origin declarations covering a period of up to 12 months.
The full text of CETA can be found on the Global Affairs Canada website.
Some importers have already started taking advantage of CETA, are you one of them? If you need assistance with CETA or any other trade agreement, don’t hesitate to reach out to Tradewin today.