A friend of yours has started a small workshop in Rwanda and asked you if she could send her handmade products to Canada. You agreed to help her out to figure out the taxes and tariffs that might apply to her products.

She is planning to export handmade footwear made out of leather. She has a farm in which she grows livestocks, processes all the products that are made from the farm, and prepares the leather. Everything happens in her workshop. If everything goes well, then she can package the finished products, label them according to the Canadian regulations, and ship them to Canada.

She wants to know how to calculate any applicable tariff and how to deal with the Canadian Customs.

Answer the following questions

1. Can she produce Certificate of Origin? How? What will her Certificate of Origin look like?
2. Explain the applications of the specific Rules of Origin that applies to her products
3. How much tariff does she need to pay for her products? Why?
4. Why does Canada have the Least Developed Country Tariff? What is LDCT supposed to achieve?
5. What if she later decides to export eggs to Canada on the side (fresh eggs: of the species Gallus domesticus for breaking purposes only)? Would her tariffs be the same as the footwear? Explain

Resources:

You will need to read and understand, at least, the following sources:

https://cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/ldct-tpmd-eng.html

https://laws-lois.justice.gc.ca/eng/regulations/SOR-2013-165/FullText.html

https://cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2017/html/countries-pays-eng.html

https://cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2019/html/admin-eng.html

https://cbsa-asfc.gc.ca/publications/dm-md/d11/d11-4-4-eng.html

https://cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/ldct-tpmd-eng.html

https://cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2020/html/tblmod-2-eng.html

(For above link: Footwear: Section XII Chapter 64 (Section VIII Chapter 42 is about leather in general)

https://inspection.canada.ca/importing-food-plants-or-animals/food-imports/food-specific-requirements/eggs-or-processed-egg-products/eng/1541610726574/1541610726802

https://cbsa-asfc.gc.ca/publications/dm-md/d10/d10-18-6-eng.html

(For above link: subsection 12: “within access commitment” vs. “over access commitment”)

https://laws-lois.justice.gc.ca/eng/acts/E-19/page-5.html#docCont

(For above link: subsection 8.3: the import permit for intergovernmental arrangement or commitment)

https://www.cbsa-asfc.gc.ca/publications/dm-md/d10/d10-18-1-eng.html

(For above link: subsection 135: Eggs and Egg Products)

https://cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2020/html/02/ch04-eng.html

(For above link: subsection: 0407.21.10.30)

Assignment Preview:

1. Yes, your friend can produce a Certificate of Origin (CO) for her products. A CO is a document that verifies that the products were produced in a certain country and can be used to claim preferential tariff treatment under certain trade agreements. Your friend can obtain a CO from the relevant authorities in Rwanda. The CO will typically include information such as the name and address of the exporter, a description of the products, and a statement certifying that the products were produced in Rwanda.

2. The specific Rules of Origin (ROO) that apply to your friend’s products will depend on the trade agreement between Canada and Rwanda. ROO determine which products are eligible for preferential tariff treatment under a trade agreement. In general, ROO establish criteria that products must meet in order to be considered as “originating” from a certain country. These criteria can include the origin of the materials used to produce the goods, the location of production, or the percentage of value added to the goods in a particular country.

3. The specific tariff your friend will need to pay for her products will depend on the Harmonized System (HS) code that best describes her products and the rate of duty for that code. You can consult the Canada Tariff Finder to find the rate of duty for her products and also consult Schedule 1 of Customs Tariff under Section XII of chapter 64, Subsection 42 of Chapter 8 which is general leather, to know the classification of the leather goods.

4. Canada has the Least Developed Country Tariff (LDCT) to promote trade with the least developed countries (LDCs) by providing duty-free and quota-free access to the Canadian market for eligible goods from LDCs. The LDCT is intended to support sustainable economic growth and poverty reduction in LDCs by providing them with improved access to the Canadian market.

5. If your friend later decides to export eggs to Canada on the side the tariffs would likely be different. The HS code for eggs and egg products is 0407.21.10.30, the rate of duty for this product would be applied, this might be different from the footwear. And also the import permit will be required under the intergovernmental arrangement or commitment. Additionally, the eggs would be subject to specific food safety and inspection requirements outlined in the Canadian Food Inspection Agency.

Order your Copy Today