EU: Free trade agreement with Canada, update | KPMG | GLOBAL

EU: Free trade agreement with Canada, update

EU: Free trade agreement with Canada, update

The European Parliament has approved a free trade agreement (signed in October 2016) between the European Union and Canada. With this vote, the free trade agreement can enter into force once Canada completes its ratification procedures, which may be as early as 1 May 2017.

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Elimination of import duties

The free trade agreement will:

  • Eliminate most import duties (approximately 98% of all import duties between the EU and Canada, with another 1% of import duties to be phased out over a seven-year period)
  • Eliminate most of the restrictions on moving across the Atlantic for temporary work
  • Provide for the mutual recognition of professional qualifications

To benefit from a 0% import duty rate, products imported into Canada will need to be of “EU origin” and products imported into the EU will need to be of Canadian origin. The EU preferential origin criteria have been included in the agreement. 

Registered exporter

Unlike most other free trade agreements, certificates of origin will not be issued by the customs authorities and the EUR 1 form will not be accepted as proof of origin. Instead, exporters will have to issue an “origin declaration” themselves. The recently introduced Registered Exporter System (REX) must therefore be used. Only those companies that are registered in the REX database may issue origin declarations.

 

Read a March 2017 report prepared by the KPMG member firm in the Netherlands

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