Frequently asked questions about CETA and Canada-UK TCA origin quotas

Import and Export Origin Quotas under CETA and Canada-UK TCA:

What is an origin quota?

Rules of origin define whether a product has been produced or 'originates' in the territory of one of the parties to a free trade agreement. In the CETA, the rules of origin for all products are set out in the Protocol on Rules of Origin and Origin Procedures and the product-specific rules of origin (Annex 5) of this Protocol. These products are eligible for preferential duty rates and, with some exceptions, may be imported and exported without quantitative restrictions.

However, the Parties have agreed that certain products that do not meet the product-specific rules of origin may qualify as originating under alternative product-specific rules of origin under Annex 5-A: Origin quotas and alternatives to the product-specific rules of origin in annex 5 (Annex 5-A). For these products, Canada and the EU have established origin quotas. Under these origin quotas, a set quantity of products that include non-Canadian or non-EU sourced materials can nevertheless qualify as originating and receive preferential tariff treatment under CETA.

In order to receive this treatment, the product must meet the product description in Annex 5-A, and must undergo sufficient production to satisfy the applicable product-specific rule of origin detailed in that origin quota.

Similarly, origin quota goods are also eligible under the Canada-UK Trade Continuity Agreement (Canada-UK TCA) as Annex 5-A to Annex 5 of the Protocol on Rules of Origin and Origin Procedures was incorporated by reference into the Canada-UK TCA. In some instances, origin quota quantities may differ from the quantities available under the CETA. This information is available in Annex A of the Canada-UK TCA.

What are the products for which Canada has established origin quotas for imports from the EU and the UK?

Canada's import origin quotas cover goods in the textiles and apparel sector. Annex 5-A of the Protocol on Rules of Origin and Origin Procedures in CETA sets out the products covered under the origin quotas. The products covered for imports into Canada are available in Tables C.3 and C.4. All origin quota products are eligible for the CETA or Canada-UK TCA preferential tariff treatment upon import into Canada.

Do I need an import permit to import these products into Canada?

Yes. All textile and apparel products covered by Canada's CETA and Canada-UK TCA origin quotas require an import permit in order to obtain the preferential tariff rate.

What are the products for which the EU and the UK have established origin quotas for imports from Canada?

The EU and the UK have established origin quotas for products in a number of sectors, including high-sugar containing products, sugar confectionery and chocolate preparations, processed foods, dog and cat food, fish and seafood, textiles, apparel, and vehicles.

Annex 5-A of the Protocol on Rules of Origin and Origin Procedures in the CETA sets out the products, and quantities, included in these origin quotas in Tables A.1, A.2, A.3, A.4, B.1, C.1, C.2, and D.1. Annex A of the Canada-UK TCA specifies the quantities under this agreement.

Do I need an import permit to import these products into the EU or the UK?

No. The EU and the UK have not established import permit requirements for these products. However, Canada has established export permits requirements for some of these products.

Do I need an export permit to export these products from Canada to the EU and the UK?

Most origin quota products exported to the EU require an export permit in order to benefit from the preferential tariff rate, with the exception of fish and seafood, textiles, and most apparel goods. The specific goods requiring an export permit are described in the Notices to Exporters.

Export permits are required only for origin quota vehicle exports to the UK in order to obtain the preferential tariff rate. All other origin quota exports to the UK may be exported without an export permit.

Which origin-quota eligible products can I export to the EU and the UK without an export permit issued by Global Affairs Canada?

Origin quota-eligible exports to the EU of fish and seafood, textiles, and most apparel do not require export permits issued by Canada to be eligible for the EU preferential tariff treatment. All origin quota-eligible goods may be exported to the UK without an export permit, with the exception of vehicles, which require export permits.

How do the importing parties process origin quota-eligible imports?

The CETA and the Canada-UK TCA dictate that origin quota imports will be administered by the importing party on a first-come, first-served basis. As such, Canada processes all textile and apparel origin quota imports on a first-come, first-served basis. These goods must be accompanied by an import permit issued by Global Affairs Canada, in order to receive the preferential tariff treatment.

Similarly, imports of origin quota goods into the EU and the UK are processed on a first-come, first-served basis. Certain goods, as stipulated in the Notices to Exporters, must be accompanied by an export permit issued by Global Affairs Canada in order to receive the preferential tariff treatment. Exporters should provide the export permit to their EU importer as this will be required by European Union customs in order to process the products under the preferential tariff rate. Further, as per paragraph 4 of Annex 5-A, exporters must include a reference to Annex 5-A on their commercial invoice or other commercial documentation.

Are there documentation requirements for origin quotas apart from import and export permits?

Exporters should note that as per the Protocol on Rules of Origin and Origin Procedures of the CETA, the exporter of the product is required to provide an Origin Declaration to the importer.

In order to identify that products are eligible for an origin quota, the exporter must:

  • inform the importer of the application of Annex 5-A;
  • include a reference to Annex 5-A on the commercial invoice or other commercial document; and
  • where applicable, provide the importer with a copy of the export permit.

Depending on the goods, there may be other documents required. Exporters should confirm any other documentation requirements with their importer.

What does the "ex" that I see before some Harmonized System (HS) codes mean?

A particular tariff code may cover a range of products beyond the product referred to in the origin quota tables. This results in a so-called "ex-out", which is identified by using the prefix "ex" in front of the tariff code.

The appearance of "ex" before an HS Code denotes that the scope of product coverage classified under that code is limited. In order to determine product coverage, reference is required to the product description set out in the tables of Annex 5-A to Annex 5 of the Protocol on Rules of Origin and Origin Procedures of the CETA.

For example, tariff code 1902.20 covers "Stuffed pasta, whether or not cooked or otherwise prepared". Whereas the ex-out (tariff code ex 1902.20 in the Origin Quota table A.3) identifies the product as "Stuffed pasta, whether or not cooked or otherwise prepared, containing rice". Since not all "Stuffed pasta, whether or not cooked or otherwise prepared" is covered, the prefix "ex" is used in front of tariff code 1902.20 to indicate that the product description further defines what is included; in this case the product must also contain rice.

Where an origin quota includes an "ex-" before the HS code, exporters should ensure their goods meet both the product description and the product-specific rules of origin for sufficient production listed for the specific good in determining eligibility under the origin quota.

How do I know the quantity available in an origin quota or when it fills?

Weekly utilization rates for origin quotas for which Canadian permits are required are available at Origin quotas for the CETA and Canada-UK TCA.

The EU also publishes quota utilization rates on their database for tariff quotas, including all origin quotas for import into the EU, on the EUROPA website. The government of the UK publishes its quota utilization rates on the Gov.UK website: Trade Tariff: look up commodity codes, duty and VAT rates.

How do I get more information about the origin quotas?

Contact Global Affairs Canada at: Origin.Quotas@international.gc.ca