In the Federal Budget of 2017, the Government made a commitment to improve market access for the world’s least developed countries. Changes were proposed to the rules of origin to allow more apparel products imported from LDCs into Canada—particularly from Haiti—to benefit from duty-free treatment.
These amendments to the General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations allow LDCs to use manufacturing inputs sourced from, and processed in, an expanded list of countries, in the production of T-shirts and pants that qualify for duty-free importation into Canada.
The changes are summarized in the following table:
| Current requirements | New requirements (changes bolded) |
|---|---|
| Apparel must be cut and sewn in the LDC | Apparel must be sewn in the LDC, but can be cut in Canada, a country set out in Schedule 2, or an FTA partner country. |
| Apparel can be made from textile inputs (yarns, fabrics) made in Canada or a country set out in Schedule 2. | Apparel can be made from textile inputs made in Canada, a country set out in Schedule 2, or an FTA partner country. |
| At least 25% value must be added in the LDC where the goods are assembled. Any Canadian content is included towards the 25%. | Level is unchanged, but any value added in an FTA partner country will also count towards the 25%. |
Tariffs affected by the change:
6103.42 Men’s and boys’ cotton knitted trousers, bib and brace overalls, breeches and shorts
6103.43 Men’s and boys’ synthetic fibre knitted trousers, bib and brace overalls, breeches and shorts
6104.62 Women’s and girls’ cotton knitted trousers, bib and brace overalls, breeches and shorts
6104.63 Women’s and girls’ synthetic fibre knitted trousers, bib and brace overalls, breeches and shorts
6109.10 Cotton knitted t-shirts, singlets and other vests
6109.90 Other textile materials knitted t-shirts, singlets and other vests
6203.42 Men’s and boys’ cotton woven trousers, bib and brace overalls, breeches and shorts
6203.43 Men’s and boys’ synthetic fibre woven trousers, bib and brace overalls, breeches and shorts
6204.62 Women’s and girls’ cotton woven trousers, bib and brace overalls, breeches and shorts
6204.63 Women’s and girls’ synthetic fibre woven trousers, bib and brace overalls, breeches and shorts
There are no changes to all other apparel products and are subject to current LDC rules of origin.
Amendments to the GPT and LDCT Rules of Origin are published in Part II of the Canada Gazette Vol.151, No. 14 –July 12, 2017.