Canada has provided tariff preferences to LDCs since 1983 through the Least Developed Country Tariff (LDCT). Coverage was expanded in 2003 to include textiles, apparel and footwear. With few specific exclusions (over-access, supply-managed dairy, poultry and egg products), all goods imported into Canada determined to be originating in an LDC are granted duty-free status.
To benefit from the LDCT, products have to comply with rules of origin. They may be wholly produced in one LDC or comply with a “cumulative rule” whereby the manufacturing process involves inputs from other LDCs or Canada. There are specific rules for textiles and apparel. The Guide to the Least Developed Country Tariff (Canada Border Services Agency) contains details on the rules of origin.
Utilization by LDCs:
In 2017, Canada imported US $ 2,873 million worth of goods from LDCs. At least 98.6 per cent of these goods entered the Canadian market duty and quota free. See also Utilization of Canada’s DFQF scheme.
The following document contains rates of utilization of LDC preferences (including the LDC tariffs under the US GSP and AGOA) for each LDC: WTO Secretariat (2018), “Utilization rates under preferential trade arrangements for least developed countries under the LDC duty scheme – Note by the Secretariat”, WTO Committee on Rules of Origin, document G/RO/W/179. Download from docs.wto.org.
Available smooth transition procedures:
There are no explicit smooth transition provisions in the Canadian GSP scheme. However. Canada still extends DFQF access to Cape Verde and Samoa, which graduated in 2007 and 2014 respectively. Equatorial Guinea and Maldives are no longer entitled to preferential treatment, since they are categorized as Upper Middle Income countries.
- Guide to the Least Developed Country Tariff (Canada Border Services Agency) – includes links to other relevant Canadian government agencies; includes information on rules of origin.
- UNCTAD Handbook about GSP Canada
- Government of Canada Justice Laws Website, “General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations”.
- WTO Preferential Trade Arrangements Database: http://ptadb.wto.org.