CANADA: Makes changes to preferential tariff scheme
Canada will continue to allow duty-free textile and apparel imports from least developed countries such as Bangladesh, despite wider changes to its General Preferential Tariff (GPT) regime.
Amendments to the GPT scheme, which provides preferential duty treatment to a range of imports from developing countries, were included in the government's 2013 Budget released at the end of March.
The plans include the withdrawal of GPT eligibility for over 70 countries when the current GPT expires on 30 June 2014, including Brazil, Russia, India, China and South Korea.
For those countries still on the GPT list, the government will renew the preference regime for another 10-years beginning 1 January 2015 - but it will also review their eligibility on a bi-annual basis.
However, the Canadian government also said it will ensure that graduating countries from the GPT regime does not reduce the benefits of the Least Developed County Tariff (LDCT) regime.
This means rules of origin regulations will be amended to continue to allow duty-free imports of textiles and apparel from least developed countries that are produced using textile inputs from current GPT beneficiaries.
A review of the GPT guidelines in December proposed that if at least 60% of the value of a product was not from raw materials from one or more of the GPT beneficiaries, the exporter country would lose the GPT facilities in Canada.
The challenge for Bangladesh was that more than 90% of the imported raw materials were from countries that would cease to be GPT beneficiaries after June 2014.
It was feared Bangladesh would lose GPT facilities, including duty- and quota-free access for its ready-made garment exports to Canada, due to its high dependence on countries like India, China and Thailand.
Bangladesh exports around US$1.0bn worth of ready-made garments to Canada each year.
In another move, the Canadian government plans to eliminate tariffs on sporting goods and baby clothes in an effort to narrow the gap in the retail prices paid by Canadian consumers and their counterparts in the US.
With additional reporting by Siddique Islam.
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