Tariff Preference Level Cotton or Man-Made Fibre Fabric and Made-Up Goods for Export to the United States under the Canada-United States-Mexico Agreement - Serial No. 996

Date: June 16, 2020

This Notice sets out the policies and practices pertaining to the administration of cotton or man-made fibre fabric and made-up tariff preference level (TPL) goods for export to the United States under the Canada-United States-Mexico Agreement (CUSMA).

This Notice, effective July 1, 2020, is provided pursuant to the authority of the Export and Import Permits Act (EIPA) and its corresponding regulations, and remains in effect until further notice.

Table of contents

1. Definitions
2. Eligibility criteria
3. Allocation policy
4. Return of allocations
5. Certificates of Eligibility
6. Related links

1. Definitions

Tariff Preference Levels (TPL): special CUSMA provisions set out in Chapter 6, Annex 6-A, Section C Preferential Tariff Treatment for Non-Originating Goods of another Party, of the CUSMA that provide for the application of CUSMA preferential tariffs for imports and exports of non-originating textile and apparel goods, up to a specified quantity.

Non-originating good: a good that does not meet the rules of origin of the agreement.

TPL-eligible Fabric and Made-Up Goods:

1. cotton or man-made fibre fabric and made-up goods of Chapters 52 through 55, 58, 60, and 63 (excluding goods containing 36% or more by weight of wool or fine animal hair) of the Harmonized System that are woven or knit in the territory in Canada from yarn produced or obtained outside the territories of the Parties or yarn produced in the territories of the Parties from fibre produced or obtained outside the territories of the Parties, or knit in the territory in a Party from yarn spun in the territory of a Party from fibre produced or obtained outside the territories of the Parties; and
2. cotton or man-made fibre goods of subheading 9404.90 that are finished and cut and sewn or otherwise assembled from fabrics of subheadings as indicated in Chapter 6, Annex 6-A Special Provisions, Section C: Preferential Tariff Treatment for Non-Originating Goods of another Party of CUSMA, produced or obtained outside the territories of the Parties. 

• Refer to the Handbook of Export and Import Commodity Codes for specific product codes.

New entrant: an eligible applicant who is not an allocation holder in the current quota year for the specific TPL quota.

2. Eligibility criteria

• Any resident of Canada is eligible for an allocation of TPL for exports of cotton or man-made fibre fabric and made-up goods to the United States.

3. Allocation policy

For year 1 of CUSMA implementation:

• Exporters that received an allocation for cotton or man-made fibre fabric and made-up TPL goods to the United States under NAFTA on January 1, 2020 will be allocated an equivalent allocation under CUSMA at entry into force of the agreement.
• Interested exporters that did not receive such an allocation under NAFTA on January 1, 2020, including new entrants, will be able to obtain TPL on a first-come, first-served basis, upon submission of a duly completed shipment-specific permit application under CUSMA.
• For year 1 of CUSMA implementation, the TPL levels are not pro-rated and the full quota quantities are accessible for exports.

On-going allocation policy:

• The allocation of TPL for cotton or man-made fibre fabric and made-up TPL goods to the United States is based on a company’s previous year’s utilization.
• On January 1, 2021, companies that utilized TPL between July 1, 2020 and December 31, 2020 will be allocated an amount equivalent to their actual utilization during this period. This actual utilization will include any amount returned by October 1, 2020, as per the return policy.
• For future years, a company that received a TPL allocation in a previous TPL quota period may receive an allocation in the next year that reflects its actual level of TPL utilization, including any returns made by the return deadline.
• TPL cannot be carried over from a previous year, nor borrowed from a future year. All unused TPL reverts to Global Affairs Canada at the end of each quota year.
• Any unallocated TPL balance will be available to new entrants, as well as allocation holders that have exhausted their allocation, on a first-come, first-served basis.

Initial and Final Allocation:

• All exporters that utilize TPL during the current quota period may receive an initial allocation for the next TPL year, at the beginning of December, which reflects 25% of their utilization to date.
• This initial allocation is to allow exporters to obtain certificates of eligibility in December for goods that will enter in the next quota year (i.e., as of January 1 and onwards). Note that all permits have a validity period of 30 days.
• All exporters that utilized TPL during the previous quota period may receive a final allocation, at the beginning January, which reflects their total utilization for the previous quota period, in accordance with the return policy, less 25% provided as an initial allocation.

4. Return of allocations 

• Returns of TPL allocation made by October 1, 2020 will be counted as part of an allocation holder’s utilization for the following year.
• Returns must be made in writing to TPL-NPT@international.gc.ca.
• Returns will be made available to exporters on a first-come, first-served basis for the remainder of the quota period, but will not count towards their utilization.
• Returned quantities are normally made available the day after the return deadline to eligible exporters.
• Returns made after the deadline will not be considered as having been utilized by the allocation holder returning the TPL. As a result, allocation holders will receive in the following year an allocation that reflects their actual utilization, and any returns made after the deadline will not be included in this amount.

5. Certificates of Eligibility

• Shipment-specific certificates of eligibility are required for exports of these goods in order to obtain the preferential tariff rate under CUSMA.
• Any unallocated TPL balance will be available to new entrants, as well as allocation holders that have exhausted their allocation, on a first-come, first-served basis.
• Once a tariff preference level quota has been fully utilized, certificates of eligibility will not be issued.

6. Related links

Handbook of Export and Import commodity codes

Key dates and access quantities

Applying for an Export Permit (Non-strategic Products)

Apply for an EIPA file number

Weekly TPL utilization information

Contact us