CETA - 2. Industrial tariff elimination (En)
1. Tariff elimination
With CETA, a host of free trade measures will facilitate trade in goods between Canada and the EU, the most important being the immediate elimination of about 99% from industrial tariffs when the Agreement.
Within 7 years of ratification, total elimination will be achieved.
This will allow greater competitiveness for both Parties in important sectors. For example, all tariffs on Canadian forest, chemical and plastic products will be immediately eliminated as soon as CETA is ratified. Tariff rates are currently around 10%.
2. Rules of origin
As with tariff elimination on agricultural products, CETA provides rules of origin to determine under what conditions a product can be considered to come from Canada or the EU and benefit from the provisions eliminating industrial tariffs.
The Agreement takes into account, however, that certain products include a higher rate of imported shares and thus provides for derogations from them; for example :
- Automobiles (see section below)
- Textiles and Appliances The Automotive Industry Current EU tax rates range from 3.5% to 22%, while those in Canada are 6.1%.
With CETA, provisions regarding the origin of products determine which automobiles are eligible for preferential treatment:
- Canadian automobiles made from 50% Canadian materials will benefit from duty-free treatment for the first 7 years, after which those made from 55% Canadian materials will be eligible for this preferential treatment;
- 100,000 cars made at 20% only of Canadian materials will benefit from tariff elimination for a given quota (1);
- A provision allowing cumulation with products from the United States will allow auto parts from there to count towards the original status of a vehicle produced in Canada or in the EU. For EU automobiles entering Canadian territory, an absolute tariff elimination will be implemented over transitional periods of 3, 5 and 7 years.
3. Regulations, Certification and Standards
Regarding the regulation of motor vehicles, when the Agreement comes into force, Canada will adopt 17 standards (2) equivalent to its own standards relating to, for example, electronic stability control of automobile passengers.
The Parties undertake to harmonize further standards in the future. Thanks to the CETA conformity assessment system, testing and certification costs, as well as marketing delays, will be reduced for manufacturers.
CETA will streamline regulations for testing, certification and labeling.
The Parties will agree on a protocol providing for a mechanism for the recognition of test results and the certification of products by the competent authorities of the other party.
CETA also establishes a mechanism by which the EU or Canada can request that their respective technical regulations be considered equivalent.
4. Customs and trade facilitation
The Agreement provides for customs and trade facilitation measures, such as:
- Access to advance rulings on the origin or tariff classification of products;
- When possible, the implementation of automated border procedures;
- The possibility of lodging complaints against customs decisions via an impartial and transparent system;
- The establishment of a regulatory cooperation mechanism, including early access to the development of regulations, in order to obtain compatible measures and reduce barriers to trade.
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(1) In 2012 Canada exported 10,023 cars to the EU with an annual average of 8,180 cars between 2007-2012
(2) Of the United Nations Economic Commission for Europe (UNECE)
© Weissberg & Weissberg 2015
All articles on CETA
All articles on CETA
1. Elimination of agricultural tariffs
2. Elimination of industrial tariffs
3. Services and labor mobility
4. Investment protection
5. Public procurement
CETA - 2. Industrial tariff elimination (Fr)
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CETA - 8. Dispute resolution and monitoring
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