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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

1Member Exclusive Guidebook © Retail Council of Canada 2017. All rights reserved.

CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT

mailto:[email protected]

2

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

2CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT

Member Exclusive Guidebook © Retail Council of Canada 2017. All rights reserved.

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.

2 3Member Exclusive Guidebook © Retail Council of Canada 2017. All rights reserved.


http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=8763494



http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/30.aspx?lang=eng

http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/30.aspx?lang=eng

WHAT SHOULD RETAILERS KNOW: KEY QUESTIONS AND ANSWERS2.

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.




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.




• 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




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



http://laws-lois.justice.gc.ca/PDF/C.R.C.,_c._448.pdf


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.




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.




• 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




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.




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.




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




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-




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)


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




Cheese Quota by the Numbers (in kilograms)


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




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.




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




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.



http://www.cbsa-asfc.gc.ca/publications/forms-formulaires/b3-3.pdf


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.



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.




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.




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.



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.



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


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 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





11 Products of the milling industry; malt; starches; inulin; wheat gluten

Up to $397.30/tonne


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


13 Lac; gums, resins and other vegetable saps and extracts


14 Vegetable plaiting materials; vegetable products not elsewhere specified or included


15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes

Up to 218%



16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates



17 Sugars and sugar confectionery Up to $30.86/tonne


Some items subject to Staging Category S

18 Cocoa and cocoa preparations Up to 265% Some items duty free immediately


19 Preparations of cereals, flour, starch or milk; pastrycooks’ products

Up to 267.5% Some items duty free immediately


20 Preparations of vegetables, fruit, nuts or other parts of plants


21 Miscellaneous edible preparations Up to 277% Some items duty free immediately


22 Beverages, spirits and vinegar Up to 11% Some items duty free immediately




CANADA-EU CETA: H.S. CHAPTERS AND CANADA’S COMMITMENTS TO REDUCE CUSTOMS DUTIESSCHEDULE A.



23 Residues and waste from the food industries; prepared animal fodder

Up to 205.5% Some items duty free immediately


24 Tobacco and manufactured tobacco substitutes


25 Salt; sulphur; earths and stone; plastering materials, lime and cemen


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


28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes


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


33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations


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






35 Albuminoidal substances; modified starches; glues; enzymes



36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations


37 Photographic or cinematographic goods


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


42 Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut)


43 Furskins and artificial fur; manufactures thereof


44 Wood and articles of wood; wood charcoal


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


47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard







48 Paper and paperboard; articles of paper pulp, of paper or of paperboard


49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans


50 Silk Free Entire Chapter is duty free

51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric


52 Cotton Up to 8% Entire Chapter is duty free immediately

53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn


54 Man-made filaments; strip and the like of man-made textile materials


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


57 Carpets and other textile floor coverings


58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery


59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use


60 Knitted or crocheted fabrics Free Entire Chapter is duty free

61 Articles of apparel and clothing accessories, knitted or crocheted






62 Articles of apparel and clothing accessories, not knitted or crocheted


63 Other made up textile articles; sets; worn clothing and worn textile articles; rags


64 Footwear, gaiters and the like; parts of such articles


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


67 Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair


68 Articles of stone, plaster, cement, asbestos, mica or similar materials


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


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






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


82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal


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


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


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


Some items subject to Staging Categories B, C and D





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


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


93 Arms and ammunition; parts and accessories thereof


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


95 Toys, games and sports requisites; parts and accessories thereof


96 Miscellaneous manufactured articles Up to 8% Entire Chapter is duty free immediately

97 Works of art, collectors’ pieces and antiques





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




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



GEOGRAPHIC INDICATIONS IN THE CANADA-EU CETASCHEDULE B.


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




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





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




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





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



European Union

H.S. Chapter Description What EU’s Schedule Says

1 Live animals Some items duty free immediately


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


Some items in Staging Categories B (4 years duty reduction), C (6 years duty reduction) and D (8 years duty reduction)


4 Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not elsewhere specified or included



5 Products of animal origin, not elsewhere specified or included


6 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage


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.




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


13 Lac; gums, resins and other vegetable saps and extracts


14 Vegetable plaiting materials; vegetable products not elsewhere specified or included


15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes


16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates


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


20 Preparations of vegetables, fruit, nuts or other parts of plants


Sweetcorn is excluded from duty relief

Some items in AVO+EP staging category



EUROPEAN UNIONSCHEDULE C.


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


24 Tobacco and manufactured tobacco substitutes Entire Chapter is duty free immediately

25 Salt; sulphur; earths and stone; plastering materials, lime and cemen


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


28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes


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


33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations


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






35 Albuminoidal substances; modified starches; glues; enzymes


36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations


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)


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


47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard


48 Paper and paperboard; articles of paper pulp, of paper or of paperboard


49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans


50 Silk Entire Chapter is duty free immediately

51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric





52 Cotton Entire Chapter is duty free immediately

53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn


54 Man-made filaments; strip and the like of man-made textile materials


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


57 Carpets and other textile floor coverings Entire Chapter is duty free immediately

58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery


59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use


60 Knitted or crocheted fabrics Entire Chapter is duty free immediately

61 Articles of apparel and clothing accessories, knitted or crocheted


62 Articles of apparel and clothing accessories, not knitted or crocheted


63 Other made up textile articles; sets; worn clothing and worn textile articles; rags


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


67 Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair






68 Articles of stone, plaster, cement, asbestos, mica or similar materials


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


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


83 Miscellaneous articles of base metal Entire Chapter is duty free immediately

84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof





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


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


87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof


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


91 Clocks and watches and parts thereof Entire Chapter is duty free immediately

92 Musical instruments; parts and accessories of such articles


93 Arms and ammunition; parts and accessories thereof


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


95 Toys, games and sports requisites; parts and accessories thereof






96 Miscellaneous manufactured articles Entire Chapter is duty free immediately

97 Works of art, collectors’ pieces and antiques Entire Chapter is duty free immediately



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



http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/02-A-A.aspx?lang=eng

http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/P1.aspx?lang=eng#2

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



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.



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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