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

Think About Bureaucratic Red Tape: Government of Canada Consults on Origin Quotas in the Canada-EU CETA

Posted in Agriculture, Canada's Federal Government, Cross-border trade, Imports Restrictions

IMPORT red stamp

On June 20, 2016, Global Affairs Canada posted an Invitation to comment on the administration of the new Tariff Rate Quotas and Origin Quotas that will be established under the Canada-European Union Comprehensive Economic and Trade Agreement. The Origin Quotas relate to high-sugar containing products, sugar confectionery and chocolate preparation, processed food, dog and cat food, fish and seafood, textiles and apparel and vehicles.  This is an important consultation process because many manufacturing inputs in Canada come from countries that are not a party to the Canada-EU CETA.  SMEs should pay close attention to this consultation process and submit comments.  You may be glad that you did.

Why Are Origin Quotas Important in the Canada-EU CETA?

Products that do not satisfy the main rules of origin may qualify as originating under the “alternative” rules of origin for Origin Quotas in the Canada-EU CETA. Under these “alternative” rules of origin, producers can use more non-originating materials or ingredients than otherwise permitted under the main rules of origin. Relying on the Origin Quotas to export preferentially to the European Union is only necessary for products that: 1) do not satisfy the main CETA rules of origin; or 2) are not subject to duty-free entry to the European Union under the Most-Favoured Nation (MFN) tariff rates.

Information relating to rules of origin for a specified list of products may be found in:

Questions Asked By the Government of Canada

The Government of Canada is asking for comments on the following two questions:

  1. Should Canada have a role in administering export Origin Quotas (e.g., using export administration mechanisms, such as export permits, quota allocation etc.)?
  2. How should Canada administer exports under the Origin Quota(s)?

Essentially, the Government of Canada is asking Canadian businesses whether they wish to have to deal with two levels of bureaucracy (one in Canada and one in the importing EU country).  These are importation questions for SMEs involved in exporting high-sugar containing products, sugar confectionery and chocolate preparation, processed food, dog and cat food, fish and seafood, textiles and apparel and vehicles when there is non-originating materials (e.g, ingredients/inputs from the USA or Mexico who are not signatories to the Canada-EU CETA).

If Canada does set up an administration, there may be monetary penalties for non-compliance.  Are you sure you want to have more financial risk and bureaucratic red tape.

Who Can Comment?

The Government of Canada would like to hear from all sectors of Canadian society and international stakeholders interested in Tariff Rate Quotas and Origin Quota, including from:

  • Producers, manufacturers, processors
  • Importers, exporters, distributors
  • Small and medium-sized enterprises and retailers
  • Other stakeholders, including industry associations and the public.

So, just about anyone with an interest in these imports from the EU can participate in the comment process.

How to Provide Comments

  1. Complete the feedback form by July 21, 2016.
  2. Submit additional information or materials to Trade Controls Policy Division (TIC) by email to CETA.Quotas@international.gc.ca or by postal mail to:Trade Controls Policy Division (TIC)
    Global Affairs Canada
    125 Sussex Drive,
    Ottawa, ON K1A 0G2

We would be pleased to assist companies answer these questions.

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com. Alternatively, visit www.lexsage.com