With the implementation of the WTO Agreement and NAFTA, measures such as import prohibitions and quantitative restrictions were replaced by tariff rate quotas and tariff preference levels.
TARIFF PREFERENCE LEVEL (TPL)
Under the terms of NAFTA, the Parties to the Agreement have agreed to grant preferential tariff treatment to specified quantities of certain yarns, fabrics, apparel, and textile articles that do not meet the rules of origin of the Agreement. These provisions of NAFTA constitute a trade mechanism known as a “tariff preference level.”
Similar provisions in CCFTA and CCRFTA apply to trade between Canada and Chile and Canada and Costa Rica respectively. The preferential rate of duty under the NAFTA, CCFTA and CCRFTA TPL mechanisms is the rate that would apply to the goods if they were originating goods under the applicable Agreement.
At the time the goods are released from customs, the importer must possess an appropriate import permit, specifying TPL entitlement.
TARIFF RATE QUOTA (TRQ)
As a signatory to the World Trade Organization (WTO) Agreement, Canada has committed to a six-step reduction schedule of Most-Favoured-Nation Tariff rates for agricultural products. The first reduction occurred in 1995, and subsequent annual reductions will take place in each of the following years until the reductions are complete.
With the implementation of the WTO Agreement on Agriculture, measures such as import prohibitions and quantitative restrictions on certain agricultural products were replaced by tariff rate quotas (TRQs).
Agricultural products included on the Import Control List (ICL) established under the Export and Import Permits Act are grouped into 22 product categories, each with an established quota. Under the TRQ system, approximately 280 within access commitment and over access commitment tariff items were created and included in the List of Tariff Provisions set out in the schedule to the Customs Tariff to classify these agricultural products. Imports within the quota amount are subject to the low rates of duty of the within access commitment tariff items and imports over the quota amount are classified under the higher rated over access commitment tariff items.