The Department of Finance will be undertaking a review of Canada’s preferential tariff regime for developing countries and intends to update the list of countries eligible for the General Preferential Tariff (GPT). There are 175 designated countries currently eligible for GPT including: China, Brazil, Hong Kong and India. With the proposed changes, these countries and many others will no longer be eligible for the preferential tariff rate which can be significantly lower than the standard Most-Favoured-Nation (MFN) rate.
The GPT list was established in the 1970’s to provide preferential tariff treatments for some goods imported into Canada in order to increase export earnings, promote industrialization and promote economic growth in certain developing countries.
Unlike other developed countries, Canada has not reviewed or amended its list of countries eligible for the GPT since the list was established in 1974. The GPT is now set to expire on June 30, 2014. The government has announced its intent to review the list of eligible countries and to amend the list based on internationally accepted criteria.
- The Government of Canada has published a notice of proposed amendments to Canada’s GPT in the Canada Gazette Part I which is open for comments until February 15, 2013
- RCC has undertaken an initial review of the 2013 Customs Tariff (available here) and has developed a preliminary chart (attached – working draft in English only) that outlines some of the product areas that will be affected (for the most part, textiles, apparel and footwear have always been exempt from GPT).
- RCC will be drafting a response to the government proposal that will include a call for the federal government to undertake a complete review of Canada’s tariff system to eliminate any tariffs where there is no longer any significant domestic manufacture of those products before changes to the GPT are implemented.