The following is excerpted from an 1 April 2013 editorial, authored by Michael Hart, the Simon Reisman chair in trade policy at the Norman Paterson School of International Affairs at Carleton University, published in the Financial Post.
In his 2013 budget, Finance Minister Jim Flaherty announced that Canada would “graduate” some 72 developing countries and eliminate their eligibility from Canada’s general preferential tariff (GPT), a program first introduced in 1974 to give developing countries a slight competitive edge in the Canadian market. In the budget, Flaherty suggested that countries that had reached the World Bank’s threshold as middle-income countries should no longer benefit from this lower tariff treatment. The GPT will remain in place for the remaining poor countries, a largely meaningless gesture because these countries are at best very minor trading partners. Some critics have pointed out that this move amounts to a potential increase of $330-million in duties on products imported from middle-income countries, a tax burden that will fall on Canadian consumers.
Others have suggested that this move creates greater incentive for these countries to come to the negotiating table and conclude a free trade agreement with Canada, the net result of which would be better trading conditions for everyone. Both points are trivially true, but are mismatched to today’s trading realities. Flaherty would have been more on point if he had announced that he was phasing out all tariffs from all sources and their related administrative procedures — from classification and valuation requirements to rules of origin — and inviting other countries to join Canada in focusing their negotiating energies on more important matters.
Canada needs to focus its limited resources where they are likely to make a difference. Changes in both Canadian and global trade and production patterns indicate that, in addition to continued efforts to reduce border and regulatory impediments in North America, engagement with East Asia should be a priority. To that end, Ottawa should avail itself of both existing and emerging opportunities to strengthen transpacific relations, from the TPP initiative to new institutional links and agreements with the most important players in Asia.
Meaningful agreements with these emerging economies should focus on integrated disciplines on state trading, investment, and competition behaviour rather than on the customs issues of the past.
This article is available in its entirety at: http://opinion.financialpost.com/2013/04/01/a-better-trade-strategy/.
Relief is just around the corner. Duties will be eliminated on many sporting and athletic goods/equipment and baby clothes; regardless of the country of manufacture on April 1st, 2013.
Jim Flaherty, Canada’s Finance Minister, delivered his budget on Thursday, March 21st that contained good news for the Sporting Goods and Baby Clothes sector. Most imported sporting goods and baby clothes presently attract duty ranging from 2.5% to as high as 20%. (http://www.thestar.com/news)
Interested in your potential savings? Let us know and we can provide you with statistics, based on your past imports, to help establish approximate import costs for future your company’s “Cost of Goods Sold” planning.
Contact your local Cole International Trade Advisor today.
Could your company be a target?
The Canada Border Services Agency (CBSA) has announced their 2013 Audit Target Priorities and has listed 26 priorities for this year. If your company imports a product on this list then CBSA officers may be contacting your company for a compliance verification audit.
We can help! Contact our Audit Response Unit before the CBSA contacts you, for more details contact us at firstname.lastname@example.org.
The new low value shipment threshold changed the NAFTA Certificate of Origin requirements for shipments released on or after January 8th 2013. As a result of this change, a Certificate of Origin is required for commercial goods imported into Canada over $2,500.00 CAD; shipments below this threshold are now permitted to use a low-value origin statement. The new low value statement for NAFTA can be accepted and used immediately.
The above information was released by the CBSA by way of Customs Notice 13-001, “Increase to the Value Threshold for Exemption From the North American Free Trade Agreement (NAFTA) Certificate of Origin Requirements for Commercial Goods for Which Preferential Treatment Under NAFTA is Claimed .”
Should you have any questions or concerns please contact our NAFTA Department by email at NAFTA.Department@cole.ca or call 905-672-6255.
Effective December 31, 2012, key air cargo security requirements take effect for domestic and international passenger flights departing CATSA (Canadian Air Transport Security Authority) – designated Canadian airports.
100% of cargo transported onboard domestic and international passenger flights departing a CATSA-designated Canadian airport must come from a Registered Shipper or be screened as per Part 2 of the Security Measures Respecting Air Cargo (SMRACs). Air carriers will no longer be able to transport cargo using (known shipper and unknown shipper protocols).
This means that 100% of cargo transported onboard a domestic or international passenger flight must come from a Registered Shipper or be actively screened using one of the four approved screening methods in the SMRAC’s.
Registered shippers may tender directly to the air carrier or through an Approved Participant such as Cole International Inc.
Cargo requiring screening by an Air Carrier may be subject to additional fees and delays. The screening fees may vary based on the airline involved.
The 100% secure non-palletized cargo requirements for transborder passenger flights are already in effect, requiring that non-palletized cargo transported onboard a transborder passenger flight be accepted from a Registered Shipper (directly or through an Approved Participant) and screened using one of the four approved screening methods.
Avoid screening fees and potential delays by ensuring that you are a Registered Shipper.
If you have any questions related to this matter, please contact your local Cole International Representative.
The Transport Canada Air Cargo Security web site is: http://www.tc.gc.ca/eng/aviationsecurity/asc-41.htm