Proposed Changes to the General Preferential Tariff Regime

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By Dave Bucholtz, ABC Customs Brokers Mar 28, 2013

The 2013 Budget, tabled in the House of Commons, proposes changes to Canada’s General Preferential Tariff (GPT) regime under the Customs Act.  The reason for the proposed changes is to ensure that General Preferential Tariffs are applied appropriately and that they are aligned with current global economics.  Further, the proposed changes will target GPT benefits to those countries that will benefit the most.

Background

The General Preferential Tariff (GPT) was implemented in 1974 as Canada’s preferential tariff treatment for developing countries. The original policy intent of the GPT was to encourage imports from developing countries as a means to promote their economic growth and export earnings.  Under the current GPT, Canada offers duty-free or preferential duty rates to imports of most products from 175 designated beneficiaries.

Modernizing Canada’s GPT Regime:

Guided by the objectives of the Economic Action Plan 2012, a review of the current GPT measures was undertaken by the Department of Finance. The Department of Finance consulted extensively with industry stakeholders, seeking views on proposed changes to the various elements of the GPT.  As announced in the Canada Gazette the Government will be removing 72 countries from the list of countries eligible for GPT status, including all members of the G-20.  To ensure that elevating these countries from GPT status does not reduce benefits under the Least Developed Country Tariff (LDCT) regime, appropriate regulations will be amended to enable continuing duty free importation of textiles and apparel from LDCT countries that are produced using inputs from current GPT beneficiary countries.

Please see below links to the proposed changes. These changes will be given effect by amendments to the Customs Tariff and various regulations.  The changes will be made in respect to goods imported into Canada on or after January 1, 2015 and will remain in effect until December 31, 2024.

This list of countries, as well as the list of countries that may continue to use the General Preferential Tariff, can be found below. It is proposed that

• GPT be withdrawn from the following countries, effective January 1, 2015. Click here to view the list.
• The following countries would remain entitled to the GPT tariff, after January 1, 2015. Click here to view the list.
• GPT Related Footnotes. Click here to view GPT Related Footnotes.

At ABC Customs Brokers, we understand how these changes affect your company and look forward to providing a customized solution to make your company more competitive in the world marketplace. Should you need more information or have questions about the General Preferential Tariff, please contact us.

Additional Reading:

• Tariffs Raised on Imports from 70 Countries – But Dropped for Sports Equipment and Baby Clothes