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We’ve broken down the main points from CETA that will impact textile and apparel goods flow between Canada and the EU.
What is the Canada-EU CETA?
The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is a landmark agreement intended to facilitate trade between Canada and the European Union. The agreement is set to eliminate a huge portion of tariffs between Canada and the EU.
CETA will have a positive impact on the flow of textiles and apparel between the two involved parties.
Here is our breakdown of the main points of the agreement:
EU origin textile and apparel goods may wind up being cheaper than US origin goods. CETA eliminates all Canadians customs duties on textile/apparel originating from the EU. NAFTA does not offer the same lenient rules of origin, making it likely that US origin goods come out pricier for consumers overall.
CETA may also result in lower CBSA reassessment risk for certifications of EU origin textile/apparel goods.
The manufacturing of textile and apparel goods must be carried out within the beneficiary country in order to be considered the origin country.
CETA also includes origin quotas for textiles/apparel, classified by product category. These origin quotas are exceptionally strict, and go into immense detail (See Article 2 of Annex 6 of the Protocol). However, quotas for textiles/apparel can be increased as needed for the following year if 80% of the origin quota is met for a product during the previous year.
Overall, CETA’s origin stipulations are not exactly straight-forward, but they are much less complicated than the rules of origin featured in NAFTA, that goes into great detail regarding fibres, fabric, yards, etc.
Of course, it will be necessary for vendors and brokers to review the rules on a case-by-case basis to see where they will fit into the new agreement.
Have any more questions on how this may affect your business? Drop us a line here to learn more.