Canada-U.S. Blog Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

What Goods Can Canadian Importers Import Duty Free When The Canada-EU CETA Comes Into Effect?

Posted in Agriculture, Canada-EU CETA, Cross-border trade, Customs Law, origin, tariff classification

Question In Maze Showing Confusion And Puzzled

It is expected that the Canada-European Union Comprehensive Trade and Economic Agreement (“Canada-EU CETA”) will come into provisional effect soon (maybe as soon as April 1, 2017 or May 1, 2017 – not yet known). Canadian importers should start to consider what goods may enter Canada duty free when the Canada-EU CETA green light is turned on.

The 28 European Union countries 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.

Most goods originating in the European Union (which is an important fact to determine before importing) will enter Canada duty free immediately. For example, a few of my favorite things will enter duty free:

  • Chocolate from Spain and Belgium;
  • Wine from Italy, Spain, France and Germany (in that order);
  • Port from Portugal;
  • Spanish ham;
  • Italian shoes;
  • British tweed jackets;
  • Marks & Spencer’s crackers and Batenberg cake;
  • Marks & Spencer’s socks (if made in the UK);
  • French furniture.

The list is very long as to what enters duty free immediately.  If you import agricultural products, agri-food, cheese, pork, fish & seafood, vehicles or parts, ships, or flowers, you should review Canada’s schedule before importing as these items may be exempted from duty relief or may be subject to a staged elimination of customs duties in Canada. Canada maintained certain protections for supply-managed goods.

We have prepared a chart of the Harmonized Systems chapters and Canada’s market access commitments.  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:

H.S. Chapter Description 2016 MFN Rate of Duty In Canada What Canada’s Schedule Says
1 Live animals Up to 238% Some items duty free immediately

 

Some items excluded from duty relief

2 Meat and edible meat offal Up to 249% Some items duty free immediately

 

Some items excluded from duty relief

3 Fish and crustaceans, molluscs and other aquatic invertebrates Up to 5% Entire Chapter is duty free immediately
4 Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not elsewhere specified or included Up to 313.5%

 

Some items duty free immediately

 

Some items excluded from duty relief

 

Some items subject to Staging Category A

5 Products of animal origin, not elsewhere specified or included Free Entire Chapter is duty free
6 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage Up to 16% Some items duty free immediately

 

Some items subject to Staging Category B

7 Edible vegetables and certain roots and tubers Up to  $10.31/kg Entire Chapter is duty free immediately
8 Edible fruit and nuts; peel of citrus fruit or melons Up to 14.5% Entire Chapter is duty free immediately
9 Coffee, tea, maté and spices Up to 3% Entire Chapter is duty free immediately
10 Cereals Up to 94.5% Some items duty free immediately

 

Some items subject to Staging Category C

11 Products of the milling industry; malt; starches; inulin; wheat gluten Up to $397.30/tonne Some items duty free immediately

 

Some items subject to Staging Category C

12 Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder Up to 10% Entire Chapter is duty free immediately
13 Lac; gums, resins and other vegetable saps and extracts Free Entire Chapter is duty free
14 Vegetable plaiting materials; vegetable products not elsewhere specified or included Free Entire Chapter is duty free
15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes Up to 218%

 

Some items duty free immediately

 

Some items excluded from duty relief

16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates Up to 253% Some items duty free immediately

 

Some items excluded from duty relief

17 Sugars and sugar confectionery Up to $30.86/tonne Some items duty free immediately

 

Some items subject to Staging Category S

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

 

Some items excluded from duty relief

19 Preparations of cereals, flour, starch or milk; pastrycooks’ products Up to 267.5% Some items duty free immediately

 

Some items excluded from duty relief

20 Preparations of vegetables, fruit, nuts or other parts of plants Up to 17% Entire Chapter is duty free immediately
21 Miscellaneous edible preparations Up to 277% Some items duty free immediately

 

Some items excluded from duty relief

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

 

Some items excluded from duty relief

23 Residues and waste from the food industries; prepared animal fodder Up to 205.5% Some items duty free immediately

 

Some items excluded from duty relief

24 Tobacco and manufactured tobacco substitutes Up to 13% Entire Chapter is duty free immediately
25 Salt; sulphur; earths and stone; plastering materials, lime and cemen Up to 2.5% Entire Chapter is duty free immediately
26 Ores, slag and ash Free Entire Chapter is duty free immediately
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes Up to 12.5% Entire Chapter is duty free immediately
28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes Up to 6.5% Entire Chapter is duty free immediately
29 Organic chemicals Free Entire Chapter is duty free
30 Pharmaceutical products Up to 6.5% Entire Chapter is duty free immediately
31 Fertilizers Free Entire Chapter is duty free
32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks Up to 6.5% Entire Chapter is duty free immediately
33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations Up to 8% Entire Chapter is duty free immediately
34 Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, “dental waxes” and dental preparations with a basis of plaster Up to 6.5% Entire Chapter is duty free immediately
35 Albuminoidal substances; modified starches; glues; enzymes Up to 270% Some items duty free immediately

 

Some items excluded from duty relief

36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations Up to 6.5% Entire Chapter is duty free immediately
37 Photographic or cinematographic goods Up to 6.5% Entire Chapter is duty free immediately
38 Miscellaneous chemical products Up to 15.5% Entire Chapter is duty free immediately
39 Plastics and articles thereof Up to 6.5% Entire Chapter is duty free immediately
40 Rubber and articles thereof Up to 15.5% Entire Chapter is duty free immediately
41 Raw hides and skins (other than furskins) and leather Free Entire Chapter is duty free
42 Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut) Up to 15.5% Entire Chapter is duty free immediately
43 Furskins and artificial fur; manufactures thereof Up to 15.5% Entire Chapter is duty free immediately
44 Wood and articles of wood; wood charcoal Up to 9.5% Entire Chapter is duty free immediately
45 Cork and articles of cork Free Entire Chapter is duty free
46 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork Up to 11% Entire Chapter is duty free immediately
47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard Free Entire Chapter is duty free
48 Paper and paperboard; articles of paper pulp, of paper or of paperboard Free Entire Chapter is duty free
49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans Free Entire Chapter is duty free
50 Silk Free Entire Chapter is duty free
51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric Free Entire Chapter is duty free
52 Cotton Up to 8% Entire Chapter is duty free immediately
53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn Free Entire Chapter is duty free
54 Man-made filaments; strip and the like of man-made textile materials Up to 8% Entire Chapter is duty free immediately
55 Man-made staple fibres Up to 8% Entire Chapter is duty free immediately
56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof Up to 16% Entire Chapter is duty free immediately
57 Carpets and other textile floor coverings Up to 14% Entire Chapter is duty free immediately
58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery Free Entire Chapter is duty free
59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use Up to 18% Entire Chapter is duty free immediately
60 Knitted or crocheted fabrics Free Entire Chapter is duty free
61 Articles of apparel and clothing accessories, knitted or crocheted Up to 18% Entire Chapter is duty free immediately
62 Articles of apparel and clothing accessories, not knitted or crocheted Up to 18% Entire Chapter is duty free immediately
63 Other made up textile articles; sets; worn clothing and worn textile articles; rags Up to 18% Entire Chapter is duty free immediately
64 Footwear, gaiters and the like; parts of such articles Up to 20% Entire Chapter is duty free immediately
65 Headgear and parts thereof Up to 15.5% Entire Chapter is duty free immediately
66 Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof Up to 7.5% Entire Chapter is duty free immediately
67 Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair Up to 15.5% Entire Chapter is duty free immediately
68 Articles of stone, plaster, cement, asbestos, mica or similar materials Up to 15.5% Entire Chapter is duty free immediately
69 Ceramic products Up to 8% Entire Chapter is duty free immediately
70 Glass and glassware Up to 6.5% Entire Chapter is duty free immediately
71 Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof; imitation jewelry; coin Up to 8.5% Entire Chapter is duty free immediately
72 Iron and steel Free Entire Chapter is duty free
73 Articles of iron or steel Up to 8% Entire Chapter is duty free immediately
74 Copper and articles thereof Up to 9.5% Entire Chapter is duty free immediately
75 Nickel and articles thereof Up to 3% Entire Chapter is duty free immediately
76 Aluminum and articles thereof Up to 6.5% Entire Chapter is duty free immediately
77 (reserved for possible future use)
78 Lead and articles thereof Free Entire Chapter is duty free
79 Zinc and articles thereof Up to 3% Entire Chapter is duty free immediately
80 Tin and articles thereof Up to 3% Entire Chapter is duty free immediately
81 Other base metals; cermets; articles thereof Free Entire Chapter is duty free
82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal Up to 11% Entire Chapter is duty free immediately
83 Miscellaneous articles of base metal Up to 7% Entire Chapter is duty free immediately
84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof Up to 9% Entire Chapter is duty free immediately
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles Up to 9% Entire Chapter is duty free immediately
86 Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds Up to 11%

 

Entire Chapter is duty free immediately
87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof Up to 13% Some items duty free immediately

 

Some items subject to Staging Categories B, C and D

88 Aircraft, spacecraft, and parts thereof Up to 15.5% Entire Chapter is duty free immediately
89 Ships, boats and floating structures Up to 25% Some items duty free immediately

 

Some items subject to Staging Categories B and D

90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof Up to 8.5% Entire Chapter is duty free immediately
91 Clocks and watches and parts thereof Up to 14% Entire Chapter is duty free immediately
92 Musical instruments; parts and accessories of such articles Up to 7% Entire Chapter is duty free immediately
93 Arms and ammunition; parts and accessories thereof Up to 7.5% Entire Chapter is duty free immediately
94 Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings Up to 15.5% Entire Chapter is duty free immediately
95 Toys, games and sports requisites; parts and accessories thereof Up to 8% Entire Chapter is duty free immediately
96 Miscellaneous manufactured articles Up to 8% Entire Chapter is duty free immediately
97 Works of art, collectors’ pieces and antiques Up to 7% Entire Chapter is duty free immediately

Pursuant to Chapter 2 of the Canada-EU CETA, each party shall reduce or eliminate customs duties on goods originating in either party in accordance with the tariff elimination schedules in Annex 2-A.  The staging categories for Schedule 2-A are as follows:

  • Category A – duties on originating goods shall be eliminated on the date this Agreement enters into force;
  • Category B- duties on originating goods shall be removed in four equal stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year 4;
  • Category C – duties on originating goods in a Party’s Schedule shall be removed in six equal stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year 6;
  • Category D – duties on originating goods in a Party’s Schedule shall be removed in eight equal stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year 8;
  • Category E  – duties on originating goods are exempt from tariff elimination in a Party’s Schedule are exempt from tariff elimination; and
  • Category S – duties on originating goods shall be removed in three equal stages beginning on the fifth anniversary of the date of entry into force of this Agreement, and these goods shall be duty-free, effective January 1 of year 8.

When you review Annex 2A, refer back to this reference on the staging categories. Also, where duties are eliminated according to Categories B, C, D or S, the starting point is the MFN rate of duty that applied on June 9, 2009.  When reviewing Canada’s Annex 2-A commitments for tariff elimination, refer to the Customs Tariff 2015 tariff codes.  This is when the Canada-EU CETA tariff elimination provisions were negotiated/finalized and the negotiators were using these H.S. Codes.

There are special rules relating to quotas for EU-origin cheese imported into Canada (other quotas are for imports into the EU). We will discuss cheese quotas in another post.

For more information about the Canada-EU CETA, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com.  We have posted articles and presentations about the Canada-EU CETA on the LexSage web-site.