CANADA: Mulls changes to preferential tariff scheme
The Canadian government is planning changes to its General Preferential Tariff (GPT) regime, which provides preferential duty treatment to a range of imports from developing countries.
Under the GPT, Canada currently offers duty-free or preferential market access to imports of most products from 175 designated beneficiaries.
But the government points out that the global economic landscape has changed considerably since it started granted preferential market access back in 1974 - "including significant shifts in the income levels and trade competitiveness of certain developing countries."
Among the proposed changes is the withdrawal of GPT eligibility from 1 July 2014 for 71 countries that are either classified as high or upper-middle income economies according to the World Bank, or have a share of world exports of at least 1% according to World Trade Organization (WTO) statistics.
These include China, Colombia, Dominican Republic, Hong Kong, India, Indonesia, Malaysia, Mexico, Thailand, Tunisia and Turkey.
Countries that would remain GPT beneficiaries after 30 June 2014 include Bangladesh, Cambodia, Egypt, Guatemala, Haiti, Honduras, Laos, Morocco, Nicaragua, Pakistan, Philippines, Sri Lanka and Vietnam.
While most apparel and footwear products are excluded from the GPT, changes to the countries that benefit from preferential tariff treatment will have implications for the sector.
As the Trade Analysis Program from Sandler, Travis & Rosenberg, a consultancy firm that specialises in international trade law issues, explains: "Least-developed countries like Haiti may cumulate origin with GPT countries in order to benefit from duty-free treatment in Canada under the Least Developed Countries Tariff (LDCT).
"As a result, the removal of a country like the Dominican Republic from GPT treatment could potentially affect apparel cut and sewn in Haiti with DR inputs that is subsequently exported to Canada under the LDCT."
The current GPT is set to expire on 30 June 2014, and comments are being sought by the Department of Finance's International Trade Policy Division by 15 February.
Click here to view more details on the proposed amendments to Canada's General Preferential Tariff.
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