Clearit.ca's Blog on Customs Brokerage and News Updates
Canada Customs: General Preferential Tariff (GPT), implemented in 1974, is set to expire in June 2014
Canada Customs: General Preferential Tariff, also known as GPT, is a designation which allows for about 80% of products coming from particular countries to qualify for reduced or duty-free status. The goal of of the designation was an attempt to increase economic development and trade with developing countries. Due to changes in designation by the world bank, countries such as China, Hong Kong, India, South Korea, and Brazil are no longer in need of this preferential treatment as they have developed into “higher or upper middle class economies”. Any country, in this case about 72, with a share of world exports greater or equal to 1% will loose their designation.
How this will affect importers like you
with over 80% of products from countries like China, India, and South Korea loosing their designation, this could mean a significant increase in costs for importers. it is highly recommended to start making the necessary changes and preparations ahead of time in order to decrease the impact of changes. Should you require any information on the changes, be sure to contact a Canada customs office or your customs broker.
Apparel industry imports mostly unaffected
Those in the apparel industry do not have much to worry about as GPT has not applied to this segment of the industry but LDCT status for garment importers from countries like Bangladesh should do their due diligence as changes may affect pricing.