Canada's export opportunities have expanded to the east with the European Canadian Free Trade and to the west with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Contact our team to benefit form duty free shipping between Canada and CPTPP Countries.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement that Canada shares with Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The agreement reduces barriers to trade and provides preferential duty free import between each other.
The CPTPP provides Canadian companies access to a growing region with a population representing over 13% of the global economy! CPTPP countries include large mature economies such as Japan and Canada as well as high growth economies like Malaysia and Vietnam.
Canada’s Most Favoured Nation (MFN) tariff rates are generally applicable to imports between Canada and CPTPP members. Duty free preferential import under CPTPP apply to goods imported to Canada and other CPTPP countries that meet the rules of origin outlined in the agreement and accompanied by the necessary certification.
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Under CPTPP, rules of origin are used to determine whether a product qualifies for duty-free or reduced-tariff treatment when traded between the member countries.
The rules of origin for CPTPP are divided into two main categories: general rules and sector-specific rules.
For example, for textiles and apparel, the sector-specific rule requires that the yarns and fabrics used to produce the product must be produced in one of the CPTPP countries, and that the final product must be cut and sewn in one of the CPTPP countries. Additionally, for automotive products, it requires that they have at least 45% regional value content.
It's important to note that under CPTPP, the rules of origin requirements apply only to the products that are eligible for the preferential tariffs, meaning that products that are already duty-free under the agreement, do not need to meet the rules of origin requirements.
Read More: Country from where goods were shipped versus country of origin
In general, the rules of origin are easier to establish for agricultural goods or mined commodities. Some agricultural products, however, may be subject to tariffs or other trade barriers, even if they meet the rules of origin. Additionally, some goods may be subject to quotas or other restrictions on the amount that can be imported duty-free.
Useful information: CUSTOMS IMPORT DUTY EXPLAINED
In general, qualifying goods must have undergone sufficient production or processing in one or more of the member countries and meet certain other criteria. The origin of the parts used in production within a product such as the use of certain materials or ingredients in their production.
For example, the rules of origin for textiles and apparel products under the CPTPP generally require that the product be made from fabrics and yarns that are produced in the member countries, and that a certain percentage of the value of the product be derived from processing or manufacturing that occurs in the member countries. The specific percentage required will depend on the product and the country of origin.
The rules of origin in the CPTPP are complex and can vary significantly depending on the product and regulatory interpretation.It is important for companies to confirm compliance with the rules of origin with the consignee/ importer and regulatory authorities prior to shipping.
In this Shipping Guide between Canada and CPTPP Countries, we review:
Disclaimer: The information in all Jet Worldwide online content, including this post, is for general information only.
Advantages of CPTPP include:
Companies can choose between air cargo and sea freight. Cargo that ships via air usually deliver within around 1 week. Ocean cargo averages between 1 to 3 months door to door.
Less than container load - LCL - is a service that shares space in a container with different consignment. It requires and additional transit time to account for loading and de-consolidation.
Full container loads - FCL - can ship either via a 20 or 40 foot container.
Ocean cargo's many surcharges can add significant costs for smaller cargo shipments. Consignments up to around 100 kilograms often have a lower price via air versus ocean.
Read more about sea freight to and from Canada
The CPTPP promotes the idea of easing customs procedures for express shipments. These procedures include the ability of carriers to submit single submissions that consolidate the entry of multiple individual online orders.
Under the CPTPP, the vast majority of customs duties have been eliminated or reduced for Canada-origin goods. Duties on some agricultural goods and on a few other products are being reduced or eliminated during this phase-out period.
The CPTPP eliminates duty on almost all commodities and lessens non-tariff barriers with the following countries.
There are several shipping options available for sending goods from Canada and CPTPP countries. The best option for you will depend on your specific needs and preferences, such as the type and size of the goods you are shipping, the speed of delivery you require, and your budget.
Here are some common shipping options that you might consider:
The goods news is that under the CPTPP a claim for preferential duty treatment does not require a separate Certificate of Origin (COO). Under the CPTPP, a statement of origin requesting preferential treatment can be made on any document, including the commercial invoice. We recommend using both a certification statement and including a separate certificate of origin.
Read More: Certificate of Origin explained
Canadian companies can take advantage of preferential duty free clearance shipping to and from CPTPP countries with a statement on the commercial invoice. We recommend including a certification of origin on a commercial invoice with reference to an included certificate of origin.
In order to claim preferential tariff treatment, the imported goods must originate and be exported from a CPTPP ratified country.
Necessary data elements for a certification origin must be provided by the exporter, producer or importer of the goods by adding the information to any shipping document (most commonly on the Commercial Invoice).
Data elements required for a CPTPP certification of origin include:
The certification of origin must be signed and dated by the certifier and accompanied by the following statement:
“I certify that the goods described in this document qualify as originating and the information contained in this document is true and accurate. I assume responsibility for proving such representations and agree to maintain and present upon request or to make available during a verification visit, documentation necessary to support this certification”
For full details regarding the minimum data requirements for the certification of origin, please refer to Annex 3-B of the CPTPP agreement.
The requirement for proof of origin is waived for imports to Canada not exceeding CAN$3,300. This change was made in July 2020 to harmonize the regulations with the new NAFTA/CUSMA and applies to all of Canada's Free Trade Agreements (including the CPTPP). The requirement on the importer to maintain records (for example, a commercial invoice or 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.
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