The trade deal between Europe and Canada (CETA) explained

With the Comprehensive Economic and Trade Agreement (CETA) now in force, many smaller companies are surprised to learn they can now ship their goods for import to the EU duty free. Canadian companies can now send qualifying goods duty free with simple ways to request preferential duty free import to the EU.

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The key benefit of CETA is the virtual elimination of tariffs between Canada and the European Union. The deal’s supporters expect it to create additional GDP growth through cuts in tariffs in key economic sectors that include agriculture, auto and pharmaceutical industry.

Under the CETA provisions, qualifying goods can be declared on the commercial invoice - greatly simplifying the ability for Canadian companies to offer lower costs to European markets.

Jet Worldwide provides low cost shipping to France, Germany, Spain from Canada as well as well as distribution within the EU.

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What is the impact beyond tariff reductions?

  • Canadian and European shared recognition of professional accreditation for architects, accountants and engineers,
  • Ease citizenship or residency requirements including simplified transfer for inter-company staff and other professionals between the EU and Canada.
  • Ownership and investment restrictions
  • Clarified regulations between Canada and the EU on intellectual property rights
  • European and Canadian companies gain the right to bid on Canadian and European municipal contracts respectively (see section below on inter-provincial trade)
  • Greater flexibility regarding 'rules of origin' regarding automobiles and auto parts

Contact our Euro-Canadian Team for information on shipping parcels to the EU

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Disclaimer: The information in this blog is for general information only. Producers, shippers, exporters, importers should confirm their processes with their customs brokers, carriers and regulating authorities.


Expected benefit to GDP growth in Canada and EU

As noted above, in an era that tariffs have already trended down to low levels, estimates of the expected benefit to GDP range have been modest: The growth in Canada's GDP from full implementation of CETA range from as low as 0.3% to more than 0.5%.

The provincial governments of Canada are actively working together to ensure out of province Canadian businesses will have access to provincial public markets that are at least as favourable as those granted to European companies in CETA.

Companies are diverting their logistics from the UK to the European continent. Contact our team to get information on EU based import, warehousing and distribution.

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Proof of origin requirements under Canada's Free Trade Agreements

The value for duty amount for all of Canada's free trade agreements (including CETA) for which the proof of origin / certificate of origin is waived was changed to $3,300 CAD in July 2020. This change was made to harmonize the regulations with the new NAFTA/ CUSMA.

For imports not exceeding $3,300 to Canada, the requirement for proof of origin is waived. The requirement on the importer to maintain records (for example, commercial invoice and B3) applies even if the CBSA does not require a certification of origin or if a requirement for a certification of origin has been waived.

Disclaimer: The information in this blog is for general information only. Producers, shippers, exporters, importers should confirm their processes with their customs brokers, carriers and regulating authorities.

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Duty Free eligibility under the CETA

Country origin rules are associated with factors used to determine if the product is eligible for preferential duty free treatment under the CETA.

As mentioned above, the CETA rules don’t require a formal certificate in order to obtain tariff benefits. A declaration on the invoice or any other commercial document accompanying the shipment is enough.

The CETA country of origin declaration has a specific wording, which is fairly straight forward (check with up to date regulations before shipping). The CETA origin declaration must include the following wording and must be completed in accordance with the footnotes.

Wording:

Period: From ________ to ________ (1)

The exporter of the products covered by this document (customs authorization No ________ (2)) declares that, except where otherwise clearly indicated, these products are of ________ (3) preferential origin.

(4) (Place and date)

(5) (Signature and printed name of the exporter)

Footnotes:

These notes are used to explain the fields required above. They do not have to be included in the actual origin statement.

  1. When the origin declaration is completed for multiple shipments of identical originating products within the meaning of Article 19.5, indicate the period of time for which the origin declaration will apply. The period of time must not exceed 12 months. All importations of the product must occur within the period indicated. Where a period of time is not applicable, the field can be left blank.
  2. For EU exporters: When the origin declaration is completed by an approved or registered exporter the exporter's customs authorization or registration number must be included. A customs authorization number is required only if the exporter is an approved exporter. When the origin declaration is not completed by an approved or registered exporter, the words in brackets must be omitted or the space left blank. For Canadian exporters: The exporter's Business Number assigned by the Government of Canada must be included. Where the exporter has not been assigned a business number, the field may be left blank.
  3. "Canada/EU" means products qualifying as originating under the rules of origin of the Canada-European Union Comprehensive Economic and Trade Agreement. When the origin declaration relates, in whole or in part, to products originating in Ceuta and Melilla, the exporter must clearly indicate the symbol "CM".
  4. These indications may be omitted if the information is contained on the document itself.
  5. Article 19.3 provides an exception to the requirement of the exporter's signature. Where the exporter is not required to sign, the exemption of signature also implies the exemption of the name

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Canada and EU: Incredible Opportunity

CETA has been received as a positive note in an era of anti-globalization. The benefits of the Canadian European free trade pact are being realized as more Canadian companies can offer competitive products and services to European customers. Canadian companies can more easily take advantage of duty free clearance from an EU Country.

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  • European continental Parcel delivery and logistics for e-commerce
  • Canada Delivery for European e-commerce
  • High volume parcel import to the USA and Canada

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Written by Timothy Byrnes