The General Preferential Tariff (GPT), General Preferential Tariff Plus (GPT Plus), and Least Developed Country Tariff (LDCT) Rules of Origin Regulations, registered as SOR/2023-210 on October 6, 2023, outline the criteria for determining the origin of goods eligible for preferential tariff treatment under Canada’s Customs Tariff. This regulatory framework is designed to facilitate trade with developing nations while promoting economic growth in least developed countries (LDCs). The regulations introduce essential definitions: a Beneficiary Country is one eligible for GPT, a Beneficiary-Plus Country qualifies for GPT Plus, which includes additional benefits, and a Least Developed Country refers to nations characterized by economic vulnerabilities.

The regulations specify that a good qualifies as originating from these countries if it is wholly produced or obtained within the respective country, which includes minerals extracted from local soil or seabeds, agricultural products harvested domestically, and live animals born and raised in the country. Moreover, the framework allows for the inclusion of goods manufactured using materials from other beneficiary countries or Canada, encouraging regional supply chains. For goods originating from beneficiary and beneficiary-plus countries (excluding textiles), a maximum of 40% of the ex-factory price can consist of materials sourced from outside the country. Special provisions for Chapters 61 to 63 of the tariff provisions, which pertain to textile products, require that these goods be cut, sewn, or assembled within the respective countries.

For goods from LDCs, the threshold for external materials is set at 80%, providing greater flexibility in sourcing. Similar provisions apply for textile goods, necessitating that specific processing occurs within the LDC for them to qualify for tariff benefits. Additionally, the regulations outline conditions under which a good retains its originating status if transported outside its country of origin. Key conditions include maintaining customs control and prohibiting further processing that alters the good’s nature. To qualify for the GPT, GPT Plus, or LDCT, goods must be shipped directly to Canada from the country of origin, ensuring that tariff benefits are only granted to goods with a clear link to the exporting nation.

These new regulations will come into force on January 1, 2025, repealing the previous General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations.

By establishing clear criteria for determining the origin of goods, Canada seeks to enhance trade relationships, particularly with LDCs, while promoting sustainable economic development. The regulations aim to be a balanced approach to trade while acknowledging the complexities of global supply chains and the importance of fostering economic ties with less developed regions.

Canada (SOR/2023-210) October 25, 2023