Industry Input Needed on Tariff Rate Quotas — Refined Sugar and Sugar-Containing Products

sugar

In keeping with Global Affairs Canada’s policy, the Government of Canada is seeking input from Canadians on the administration of two new Tariff Rate Quotas (TRQs) for sugar and sugar-containing products to the United States established under the Canada-United States-Mexico Agreement (CUSMA), in order to develop administration policies.

These TRQs are for:

  1. Sugar-Containing Products for Export to the United States under CUSMA
  2. Refined Sugar for Export to the United States under CUSMA

To ensure efficiency and effectiveness in developing and administering new administration policies, the Government of Canada is seeking the views of stakeholders with an interest in the administration of these two new quotas.

Global Affairs Canada would like to hear from:

  • the Canadian public
  • producers, refiners, processors, further processors, distributors, retailers and exporters
  • academics and experts
  • Indigenous groups
  • national and provincial industry associations
  • small, medium and large enterprises
  • national, provincial, territorial and regional associations
  • other interested stakeholders

To participate in the consultation, interested parties are encouraged to review the background information and provide feedback through the online questionnaire provided by Global Affairs Canada.

Click here if you are interested in providing feedback. Stakeholders have until 11:59 p.m. (Pacific Time) on May 15, 2020 to submit their responses, comments, and suggestions. 

What Are the New De Minimis Thresholds Under CUSMA/USMCA?

shipping containers

Under CUSMA, Canada has agreed to maintain a de minimis threshold of at least CAD$150.00 for customs duties, and CAD$40.00 for taxes, at the time or point of importation of goods shipped by courier from the United States or Mexico. There are otherwise no changes to Canada’s existing de minimis framework.

Accordingly, postal shipments from the U.S. or Mexico, as well as any courier or postal shipments from any other country, will continue to have a customs duty and tax remission threshold value of up to CAD$20.00.

Please note that the new thresholds will apply as of the date CUSMA enters into force — July 1, 2020 — and, for greater clarity, time of importation means the time of release.

To read the full details of the customs notice detailing de minims thresholds under CUSMA/USMCA, click here.

CBSA Duty Relief for Products Related to COVID-19

medical gloves and mask

Canada Border Services Agency is offering duty relief on eligible goods, via Customs Notice 20-19, Certain Goods Remission Order (COVID-19).

The relief applies to goods which were imported into Canada on or after May 5, 2020. This relief can be claimed at the time of importation  or within two years of the date of importation.

CBSA has noted a number of eligible items for duty relief that can be applied by your customs broker. Importers must be able to furnish evidence that the goods are eligible for exemption, as listed in Appendix A of Customs Notice 20-19.

Goods eligible for relief under the Certain Goods Remission Order (COVID-19) include:

  • Face and Eye Protection
  • Gloves
  • Protective Garments and the Like
  • Disinfectants/Sterilization products
  • Medical Consumables
  • Other Products

For an exhaustive list, including tariff item numbers and description of eligible goods, please refer to Appendix A.

Click here to read the full notice.

We have reviewed this notice, and are available to discuss how duty relief may apply to your business. If you have any questions regarding this announcement, or any other trade-related information, please do not hesitate to reach out at any time.

Get in touch:

Tyler Carson, President, tyler@carson.ca
Dave Pentland, VP, dwpentland@carson.ca
Matt Earish, COO, matt@carson.ca

USTR Considering One-Year Extension of China Tariff Exclusions

China shipping line

The Trump administration is weighing whether to extend by one year some China tariff exclusions, a move that would offer some relief for U.S. businesses navigating the fallout from the COVID-19 pandemic.

The move would apply to some products excluded from the 25 percent tariffs that Trump imposed on Chinese goods in two initial batches: a list of $34 billion in products and $16 billion.

USTR asked for public comment on the idea before June 1. The trade agency said it would evaluate the exclusions, currently set to expire on July 9 and July 31, on a case-by-case basis, rather than approve an across-the-board extension. The focus of the evaluation will be “whether, despite the first imposition of these additional duties in July 2018, the particular product remains available only from China.” Additionally, the following issues should be addressed in submitting any comments:

  • Whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
  • Any changes in the global supply chain since August 2018 as to the particular product or any other relevant industry developments.
  • The efforts, if any, the importers or U.S. purchasers have undertaken since August 2018 to source the product from the United States or third countries.

The USTR notes that it will continue to consider whether the imposition of additional duties on the products covered by the exclusion will result in severe economic harm to the commenter or other U.S. interests.

Those wishing to comment must do so electronically, preferably by completing the Exclusion Extension Comment Form, which has recently been revised into one form that combines the previously separate public and confidential forms. Fields on the form marked as Business Confidential Information (BCI) will not be publicly available when comments are posted on the docket (uploaded supporting documents can also be marked as public of BCI).

Comments will be accepted between May 1 and June 1, 2020. All submissions must be made electronically via the www.regulations.gov portal on Docket Number USTR-2020-0017 (List 1) or USTR-2020-0018 (List 2). 


U.S. Trade Authorities Place Canada on “Watch List” for Coming Changes to Drug Prices

medication

The United States is keeping Canada on its watch list of countries where policies and practices could pose a threat to American intellectual property rights.

In its annual report on foreign perils to American rights holders, the office of the U.S. Trade Representative is raising concerns about Canada’s plan to recalibrate how it calculates the price of prescription drugs.

The report stops short, however, of demands from the U.S. pharmaceutical industry that Canada be elevated to the USTR’s list of “priority” trouble spots.

The federal Liberal government announced last summer that the arm’s-length Patented Medicine Prices Review Board would stop using drug prices in the U.S. and Switzerland — among the highest in the world — to help it determine what Canadian patients should pay.

The Pharmaceutical Research and Manufacturers of America, a drug-industry lobby group, says Canada’s plan would be a drag on efforts to develop new treatments and would end up devaluing American-made patented medications.

The USTR report out this week does acknowledge coming intellectual-property reforms in the new North American trade deal, CUSMA, but calls on Canada to “contribute fairly” to research and development for innovative medicines.

Disrupted Supply Chains Strain Trade among U.S., Mexico and Canada

trucking

As COVID-19 continues to impact global economies, Resilience360, a cloud-based platform that helps companies to visualize, track and protect their business operations, recently released a series of reports that analyze key challenges that cross-border operators in Canada and the United States face.

With individual provinces and states largely in charge of deciding on issues relating to business closures and shelter-in-place advisories, Canada and the United States have been experiencing a somewhat patchwork approach to the pandemic. Business closures and shelter-in-place orders have impeded ground freight delivery schedules from an accessibility perspective, with restaurant and rest stop closures also impacting truck drivers.

An additional area of complexity lies with Mexico, having decided to close its factories as of March 30. Similarly to Canada and the United States, federal and state governments have not been on the same page in terms of determining how and when businesses should re-open.

Click here to read the report “COVID-19 Outbreak in the U.S. and Canada: Impact on North American Supply Chain Operations.”

Click here to read the report “Production Halts and Industrial Action in Mexico Amid COVID-19 Pandemic.”

Amid the disruptions to supply chains, working with a trusted trade advisor can help mitigate complex trade issues that have arisen as a result of COVID-19. Get in touch with a Carson trade expert today.

UNCTAD Releases 10-Point Action Plan To Strengthen International Trade and Transportation Amid COVID-19

shipping

The United Nations Conference on Trade and Development (UNCTAD) has released a 10-point action plan to strengthen international trade and transportation amid the COVID-19 pandemic.

The policy brief acknowledges the need to mitigate the potentially crippling longer-term consequences of the pandemic, especially for the most vulnerable countries, while keeping ships moving, ports open, and cross-border transit trade flowing. Facilitating trade and the transport of goods has become more important than ever, to avoid logistics obstacles that lead to shortages of necessary supplies.

The 10 points in the action plan are as follows:

  1. Ensure uninterrupted shipping
  2. Maintain ports open
  3. Protect international trade of critical goods and speed up customs clearance and trade facilitation
  4. Facilitate cross-border transport
  5. Ensure the right of transit
  6. Safeguard transparency and up-to-date information
  7. Go paperless
  8. Address early on legal implications for commercial parties
  9. Protect shippers and transport service providers alike
  10. Prioritize technical assistance

International collaboration, coordination and solidarity among all is going to be key to overcoming this unprecedented global challenge, the brief states.

Click here to read the full 10-point action plan issued by UNCTAD.

CUSMA Trade Agreement To Go Into Effect July 1

Canadian, Mexican, and American flags

U.S. Trade Representative Robert Lighthizer has notified Congress that the new U.S.-Mexico-Canada trade agreement will take effect on July 1, a month later than initially proposed.

In a statement, Lighthizer said both Mexico and Canada had taken measures necessary to comply with their commitments under the U.S.-Mexico-Canada Agreement (USMCA, also referred to as CUSMA), which replaces the 26-year-old North American Free Trade Agreement (NAFTA).

Some industries, including automakers, had been arguing for a delayed implementation because of the difficulties they are facing from the COVID-19 pandemic.

The accord includes tougher rules on labour and automotive content but leaves US$1.2 trillion in annual U.S.-Mexico-Canada trade flows largely unchanged.

How will the new trade agreement affect your business? Click here to learn more.

Canadian Government Announces $50M to Keep Food Supply Chain Safe

apples

The federal government has announced $50 million to help farmers, fish harvesters, and all food production and processing employers put in place the measures necessary to follow the mandatory 14-day isolation period required of all workers arriving from abroad.

In many regions across Canada, producing a variety of quality foods to be sold at affordable prices relies on the contributions of experienced temporary foreign workers right from planting season to harvest.

Key points:

  • Approximately 50,000 to 60,000 foreign agricultural, food and fish processing workers coming to work in Canada each year, which accounts for more than 60% of all foreign workers entering Canada under the Temporary Foreign Worker Program.
  • Each year, despite the fact that the agricultural sector receives approximately 60,000 foreign workers, around 15,000 jobs remain vacant.
  • No travellers including temporary foreign workers who present with COVID-19 symptoms are allowed to board international flights to Canada.
  • This support is available for all food production firms that rely on temporary foreign workers, including primary agriculture and food processing, as well as fisheries and aquaculture.

“This is an important reason why the Government of Canada granted an exemption for temporary foreign workers from travel restrictions to Canada, along with other foreigners with student and work visas, provided they adhere to a strict 14-day isolation protocol upon arrival,” the statement said.

The government stated that those who do not comply with the Quarantine Act or the isolation protocol will face severe fines and sanctions. Under proposed changes, employers could also face significant penalties, and a possible ban from the program, if they prevent adherence to the self-isolation order.

In addition to the responsibility of paying the workers for the two weeks during which time they cannot work, many employers are also responsible for providing workers with transportation and accommodations, as well as access to food and basic supplies needed to meet all of the conditions imposed by public health authorities.

The federal government is providing support of $1,500 for each temporary foreign worker, to employers or those working with them to ensure requirements are fully met. The funding is conditional on employers not being found in violation of the mandatory 14-day isolation protocols or any other public health order. The program will be available as long as the Quarantine Act is in force and the isolation protocol is followed.

Click here to read the full release.

ICC and WCO Partner to Facilitate Global Trade Action Amid COVID-19

cargo

The International Chamber of Commerce (ICC) and the World Customs Organization (WCO) have issued a joint statement calling for increased action on customs and trade facilitation to ensure an effective response to the COVID-19 pandemic.

In a joint statement, ICC Secretary General John W.H. Denton AO and WCO Secretary General Kunio Mikuriya say effective trade facilitation – based on international standards – will play a central role in enabling business continuity and renewed economic growth.

The statement calls for a coordinated customs response to the COVID-19 crisis – including through active participation in multilateral efforts and an open dialogue with neighbouring countries.

“We call on Customs administrations and other government agencies to keep trade flowing by maintaining the continuity of the international supply chain and simplifying and facilitating the Customs processes for essential medical equipment, medicines and food supplies – as well as key support personnel – so as to ensure an effective response to the pandemic and to protect lives throughout the world,” the leaders state.

Click here to read the full statement.

ICC and the WCO have also agreed to coordinate efforts in response to COVID-19 and are partnering to explore potential opportunities aiming to keep trade flowing worldwide and to support strong recovery of the global economy.

To support its members and relevant stakeholders, the WCO has created a dedicated section on its website (view here) and has included several existing and newly developed tools to aid in the facilitation of supply chain integrity within the context of the COVID-19 pandemic.