Canada’s Free Trade Agreements

There has been a lot of talk in the news recently about Canada’s upcoming Free Trade Agreements (FTA’s) with various countries (i.e. EU, Korea, Japan), but what stage are these agreements really at?  And when can you expect that they will come into force?

Some would assume that because of the August 5th, 2014 announcement that the negotiations have been completed on the Canada – European Union Trade Agreement (CETA), full implementation of the agreement is not far behind.  Unfortunately this is not the case, and much work lies ahead before CETA will come into force and the benefits of the trade agreement can be realized.  Estimates are that it will be, at minimum, another year before CETA is ready for signature.

To give you an overall picture of Canada’s Free Trade Agreements (present and potential), below you will find a ‘snapshot’ of what is in the works.  The Department of Foreign Affairs, Trade Development Canada categorizes the FTA’s in 5 ways:

  1. FTA’s In Force
  2. FTA’s Signed
  3. FTA’s Concluded
  4. Ongoing FTA Negotiations
  5. Exploratory Discussions
FTA’s In Force FTA’s Signed FTA’s Concluded Ongoing FTA Negotiations Exploratory Discussions
Panama Honduras Korea Caribbean Community Turkey
Jordan   European Union (28 countries) Central America Four Thailand
Columbia     Dominican Republic MERCOSUR*
Peru     India  
European Free Trade Association* (EFTA)     Israel (modernization of existing FTA)  
Costa Rica     Japan  
Chile     Morocco  
Israel     Singapore  
NAFTA     Trans-Pacific Partnership  
      Ukraine  
      Costa Rica (modernization of existing FTA)  

*EFTA consists of Iceland, Liechtenstein, Norway & Switzerland

*MERCOSUR is a customs union established by Argentina, Brazil, Paraguay & Uruguay

What is a Free Trade Agreement, and what are the benefits? 

An FTA enables companies to compete on a more even playing field with similar firms in the FTA partner country. Under an FTA, a range of Canadian goods and services benefit from the reduction or elimination of tariff (duty) and non-tariff barriers (quotas or technical barriers). It is important to note that each FTA covers different industry sectors and contains different provisions, depending on the FTA partner.  For example, a country with a dairy industry would ensure that an FTA that they enter into would both enhance and protect the dairy industry.

How can Cole help manage NAFTA and other FTA’s for Clients?

Cole International’s Consulting Department offers a wide array of services related to NAFTA and other FTA’s that include:

  • Procurement and maintenance of FTA Certificates of Origin
  • NAFTA and FTA Verifications (i.e. do your goods qualify?)
  • Refund requests to take advantage of FTA duty rates

Please contact us at: 403-262-2771

More Information on Canada’s Free Trade Agreements: http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fta-ale.aspx?lang=eng

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Tires From China Imported Into USA

Antidumping Duties and / or Countervailing Duties may soon be assessed on importations of “Certain Passenger Vehicle and Light Truck Tires From China in the USA.

The United States International Trade Commission (USITC) gave notice on June 3, 2014 of the commencement of a preliminary phase antidumping and countervailing duty investigation.  The purpose of the investigation was to determine if there was indication that an industry in the USA is materially injured or threatened with material injury because of importations of “certain passenger vehicle and light truck tires from China”.  There was an affirmative decision made by the USITC on July 22, 2014 and as a result, the investigations will continue.  Preliminary decisions and potential duty rates are expected to be determined on or about the following dates:

  • Countervailing Duty Investigation # 701-TA-522: August 27/14
  • Anti-dumping Duty Investigation # 731-TA-1258: November 10/14
Description of Goods Usual HS Classification Country of Origin (or export)
 

Certain Passenger Vehicle and Light Truck Tires

4011.10.10

4011.10.50

4011.20.10

4011.20.50

 

Dumping Case: China

 

Subsidizing Case: China

It should be noted that the duty rates are dependent on the degree of injury caused by the dumping or subsidizing of a certain good, and they can often be substantial.  For this reason, it is important that you keep up to date on the issue.  Please contact Cole International for more information and keep an eye on our website for updates on the issue.

Additional information on Anti-dumping and Countervailing duty:   http://www.usitc.gov/faqs/import_injury_faqs.htm

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Update, Wood Packaging Material

UPDATE: Date for Removal of Exemption on Wood Packaging Material Between Canada & USA to be Announced in the Fall of 2014

This article is to provide you with an update on the upcoming changes to regulations on wood packaging material (WPM) moving between Canada and the USA.  See the June 25/14 excerpt below for Cole’s original Bulletin on the subject. 

Today’s Update: The projected implementation date for these changes will be announced in the fall of 2014.  Full details and specific timelines for implementation will be released once the final regulation has passed. 

To assist stakeholders in achieving compliance with the new regulations, The Canadian Food Inspection Agency and the United States Department of Agriculture (Animal & Plant Health Inspection Service) intend to conduct an extensive outreach program and a ‘phase-in” period.

In the meantime, current regulations for shipments between Canada and the USA apply and a declaration or statement of origin of any unmarked wood packaging material should be included on shipping documents. The Canadian Food Inspection Agency provides the following examples of acceptable wording for notation on shipping documents:

  • “the unmarked wood packaging in the shipment is of Canadian origin”
  • “the unmarked wood packaging in the shipment is of Canadian and U.S. origin”
  • “the unmarked wood packaging in the shipment is of U.S. origin”
  • If all of the WPM (in a shipment) is unmarked, shippers could more simply state, as applicable: “the wood packaging in the shipment is of Canadian origin”.

Cole International will continue to keep you updated as new information is received on the subject.

————————————————————————————————————

June 25/14 Bulletin:

The Issue: The purpose of this bulletin is to advise you of a significant upcoming change to the entry of Canadian wood packaging into the USA.  In the very near future “ISPM 15” (International Standards for Phytosanitary Measures No. 15) requirements will apply at the Canada-US border and the current exemption for Canadian WPM will no longer be recognized.

What does this mean? It means that the (Canadian) wood packaging that your USA bound shipment is packed in/with/on will have to be treated and marked per ISPM 15 standards in the same manner that currently applies to all other countries.  The exemption that used to be applied to Canadian WPM will no longer apply.

What is ISPM 15 and why is it important?  ISPM 15 is a regulation that requires that all non-manufactured wood packaging material used in international trade be treated in accordance with a set standard.  The goal is to prevent the introduction of invasive pests to country’s forests. The movement of invasive alien species through increased global trade is one of the fundamental causes of pest introductions into other countries, and non-compliant wood packaging material is considered a high-risk pathway for these species to enter those countries.

When will this change be implemented?  The exact implementation date is unknown, but information at this time indicates that it will not be earlier than fall, 2014.  As with past Government initiatives and significant changes, it is likely that there will be a phased in implementation process and/or an informed compliance period to assist importers in meeting the new requirement. Again, we do not have any specific information in this regard, but will endeavor to get clarification as soon as it is available.

Will this apply to shipments entering Canada? We expect that the same (removal of U.S.A. exemption) will apply to Canada-bound shipments in the near future, but we await confirmation and more information from the CFIA (Canadian Food Inspection Agency) in this regard.

What happens if you don’t comply?  Failure to use certified and stamped wood in pallets, crates, dunnage etc… could result in Canadian or U.S. Customs refusing entry and forcing the return of the shipment to the point of origin.  Costs and delays due to non-compliant packaging would be significant, including:

  • Return freight
  • Cost to treat and certify
  • Storage Costs
  • Penalties from carriers for delay
  • Penalties from clients due to failure to deliver on time
  • Lost order due to late delivery
  • And more….

When will more information be available?  Our goal at Cole International is to keep you informed and to help you comply, so we will continue to research this issue and provide updates as soon as they become available.

The following links will be useful to you as you prepare your business for this upcoming change:

Sources for IPSM Treated Wood Products: http://www.inspection.gc.ca/plants/forestry/exports/cwpcp/registered-participants/eng/1350500818302/1350500993366

Treating Facilities:  http://www.inspection.gc.ca/english/plaveg/for/cwpc/treatface.shtml

Main Website for Canadian Wood Packaging Certification Program: http://www.inspection.gc.ca/plants/forestry/exports/cwpcp/eng/1319408686981/1319409123845

Wood Packaging Material and ISPM 15 Requirements:  http://www.cbsa-asfc.gc.ca/security-securite/wp-meb-eng.html

Canada Customs is Focusing Their Audits on These Goods

The Canada Border Services Agency (CBSA) has published a list of commodities and programs on which they will focus their audits (compliance verifications) over the coming year.   There are 11 new items on the list, ranging from batteries to bags to certain machinery.  For a complete list of CBSA’s verification priorities, please click here.  (en français) Cole International works diligently every day to ensure that your company is Customs compliant, but CBSA may still chose to audit your company.  Be assured that Cole’s Audit Response Unit is ready and able to assist you through a CBSA audit in the event it happens.

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