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Canada is Amending the GPT and LDCT Rules of Origin Regulations

: Textiles & Apparel

New Liberalized Rules of Origin Go Into Effect for Least Developed Country Tariff (LDCT) 2017-07-19

On June 20, 2017, the Government of Canada amended the Least Developed Country (LDC) rules of origin for the following apparel products. These are the only products affected by the change. All other apparel products remain subject to the current LDC rules of origin.
 
Products affected by the change: 
  • 6103.42 Men’s and boys’ cotton knitted trousers, bib and brace overalls, breeches and shorts
  • 6103.43 Men’s and boys’ synthetic fibre knitted trousers, bib and brace overalls, breeches and shorts
  • 6104.62 Women’s and girls’ cotton knitted trousers, bib and brace overalls, breeches and shorts
  • 6104.63 Women’s and girls’ synthetic fibre knitted trousers, bib and brace overalls, breeches and shorts
  • 6109.10 Cotton knitted t-shirts, singlets and other vests
  • 6109.90 Other textile materials knitted t-shirts, singlets and other vests
  • 6203.42 Men’s and boys’ cotton woven trousers, bib and brace overalls, breeches and shorts
  • 6203.43 Men’s and boys’ synthetic fibre woven trousers, bib and brace overalls, breeches and shorts
  • 6204.62 Women’s and girls’ cotton woven trousers, bib and brace overalls, breeches and shorts
  • 6204.63 Women’s and girls’ synthetic fibre woven trousers, bib and brace overalls, breeches and shorts 
Under the new LDC rules of origin for knitted and woven garments of these tariff items made from cut garment parts or knit to shape parts, the goods will qualify for duty free entry into Canada under LDC if the following conditions are met:
 
  1. The fabric or knit to shape parts that determine the tariff classification of the finished garment are produced in an LDC or Canada: 
  • The fabric or knit to shape parts do not undergo further processing outside an LDC or Canada prior to cutting or assembly;
  • The fabric is cut in an LDC, a Schedule 2 country (current and previous GPT country), a Canadian Free Trade partner (FTA partner) or Canada;
  • Yarn used to make the fabric or knit to shape parts is spun or extruded in an LDC, a Schedule 2 country, an FTA partner or Canada and does not undergo further processing outside these countries;
  • The cut or knit to shape parts are assembled in an LDC and shipped from there to Canada on a Through Bill of Lading. 
  1. The fabric or knit to shape parts that determine the tariff classification of the finished garment are produced in a Schedule 2 country or an FTA Partner: 
  • The fabric or knit to shape parts do not undergo further processing outside an LDC, Schedule 2 country, FTA partner or Canada;
  • The fabric is cut in an LDC, a Schedule 2 country, an FTA partner or Canada;
  • The yarn used to make the fabric or knit to shape parts is spun or extruded in an LDC, a Schedule 2 country, an FTA partner or Canada and does not undergo further processing outside these countries;
  • The cut or knit to shape parts are assembled in an LDC and shipped from there to Canada on a Through Bill of Lading; and
  • The value of any materials, including packing, used in the manufacture of the goods and that originate outside the LDC in which the garments are assembled is not more than 75% of the ex-factory price of the goods as packed for shipment to Canada. But for the purposes of  determining the 75% non-LDC content, the value of any materials, including packing, that originate in Canada or in an FTA partner are deemed to originate in the LDC country where the garments are assembled and therefore count towards the LDC percentage of ex-factory content. 
The amended regulations are published in the Canada Gazette Vol. 151, No. 14 — July 12, 2017.
 
For a list of Canada’s current FTA partners, go to Trade and Investment Agreements; in Agreement type, select “Free trade agreements (FTA)” and in Status, select “In force”, then click on Filter.
 
Please contact Milgram’s Consulting Department with any questions.

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