Duty Relief on Certain Textile and Textile Articles for Qualifying Products under Canada-Colombia FTA Short Supply

January 27, 2020 – Canada Border Services Agency (CBSA) recently issued Customs Notice 20-02 on January 15, 2020 advising of an amendment to the Customs Tariff effective of January 10, 2020. The amendment updates Section XI Textiles and Textiles articles of the Customs Tariff to implement Article 317 of the Canada-Colombia Free Trade Agreement, Short Supply.

Importation of goods qualifying under the Canada-Colombia Free Trade Agreement (CCOFTA) short supply are eligible to claim duty-free rate.  The full range of HS classifications at the 6th digit level under Section XI of the customs tariff, qualifying for Canada–Columbia short supply is found under the supplementary notes.

The Order Amending the Schedule to the Customs Tariff (CCOFTA Short Supply) amends the schedule to the Customs Tariff to establish a list of yarns and fabrics not produced in commercial quantities in Canada or Colombia, and to allow textile goods or apparel produced in Colombia from those yarns or fabrics to be eligible for CCOFTA duty-free status when imported into Canada. Details found in Canada Gazette Part II, SOR/2020-1, Volume 154, number 2.

Under the terms of the Canada-Colombia Free Trade Agreement (CCOFTA), Canada and Colombia have agreed to establish a “short supply” list of yarns and fabrics that are not produced in Canada or Colombia. These textile inputs may be used to produce textile products or apparel that are eligible for duty-free treatment when imported into Canada or Colombia.

The Order Amending the Schedule to the Customs Tariff (CCOFTA Short Supply) implements, in Canada, this bilaterally agreed list of yarns and fabrics. Accordingly, listed goods may be sourced outside of the free trade area and used in the production of Colombian textile products or apparel that are eligible for duty-free treatment when imported into Canada.

Article 317 (Short Supply) of the CCOFTA provides a limited exception to this requirement and allows both Parties to agree that certain textile inputs are not available in commercial quantities in a timely manner in either Canada or Colombia. Once agreed upon, these inputs are in short supply and may be imported from outside the free trade area and used to produce originating textile and apparel goods that are eligible for duty-free treatment.

Canada and Colombia agreed to establish a list of 73 items that were determined to be in short supply. These items cover a range of yarns and fabrics from wool, cashmere, cotton and man-made fibres, such as polyester and viscose rayon with very specific requirements (e.g. the yarn or fabric must meet a given weight specification).

For certainty regarding the tariff classification of a product, importers may request an advance ruling on tariff classification. Details on how to make such a request can be found in CBSA Memorandum D11-11-3 – Advance Rulings for Tariff Classification,

Consult Customs Tariff 2020-1 Section XI Textile and Textile Articles available on CBSA’s website here.