Canadian Packaging Machinery Market Research Report - PMMI

As a result of the U.S.-Canada Free Trade Agreement (FTA), which went into effect
in January 1989, virtually all Canadian tariffs on U.S. products have been eliminated.
The North American Free Trade Agreement (NAFTA), which replaced the FTA in
January 1994, removed some remaining barriers and expanded specific provisions of
the FTA. However, certain non-tariff barriers at both the federal and provincial levels
continue to impede the access of U.S. goods and services to Canada or retard
potential export growth. These non-tariff barriers include standards and practices
related to government procurement policies, provincial liquor boards, service exports
and cultural industries.
There are no significant trade barriers impeding exports of U.S. packaging machinery
to Canada. Under the U.S.-Canada Free Trade Agreement and its successor, the
North American Free Trade Agreement, tariffs on all U.S.-origin packaging machinery
were eliminated as of January 1, 1998. Equipment originating from the United States
that satisfy NAFTA Rules of Origin requirements are entitled to a zero percent tariff.
Equipment that does not satisfy the Rules of Origin or that originate from other
countries is subject to the Most Favored Nation tariff, which is 3.4 percent. Rules of
Origin outlined in NAFTA are used to determine whether a product or piece of
equipment originates in Canada, the Unites States, or Mexico and is thereby eligible
for duty-free entry to the respective markets.
All commercial shipments exported to Canada require a properly completed Canada
Customs Invoice or its equivalent. In addition, shipments of U.S.-produced goods
must be accompanied by a completed NAFTA Certificate of Origin in order to obtain
tariff-free treatment under the provisions of the North American Free Trade
Agreement. For further information, contact the Canada Customs and Revenue
Agency representative at the Canadian Embassy in Washington at Tel: (202) 682-
1740 or Fax: (202) 682-7689.
Non-tariff barriers are not a significant factor affecting U.S.-Canada trade in
packaging equipment. There are no technical standards established by the
Canadian government for imported packaging equipment. However, all electrically
powered products sold in Canada must comply with Canadian law requiring
compliance with federal standards established by the Canadian Standards
Association (CSA). Information pertaining to the certification process and copies of
the applicable standards can be obtained by contacting the CSA.
On January 1, 1991, the Canadian Federal Government supplanted its 13.5 percent
Federal Sales Tax on manufactured goods with a seven-percent Goods and Services
Tax (GST). The GST is a value-added consumption tax, which is applied to all
domestic and imported goods and services sold in Canada. The GST on imports is
initially levied on the freight on board (FOB) price plus applicable Canadian customs
duties, if any. For more information regarding the GST, exporters should contact
Canada Customs and revenue Agency.
U.S. exporters of packaging equipment must comply with bilingual and other
packaging and labeling practices in Canada. Directions for use, warranty certificates
SMG/Columbia Consulting Group Page 9