TWN Info Service on WTO and Trade Issues (May10/03)
7 May 2010
Third World Network

Canada now a tariff-free zone for manufacture inputs, machinery
Published in SUNS #6916 dated 3 May 2010

Geneva, 30 Apr (Kanaga Raja) -- Canada informed members of the World Trade Organization (WTO) on Thursday that it has now become a tariff-free zone for all manufacturing inputs and machinery and equipment.

The announcement was made at a meeting of the WTO Committee on Market Access, at which Canada updated the membership of its unilateral action to eliminate Most Favoured Nation (MFN) applied rates of customs duty on all manufacturing inputs and machinery and equipment.

According to trade officials, at the meeting, Canada said that this move will lower the cost of production, especially for small and medium-sized companies, and help raise the competitiveness of Canadian companies.

It told the Committee that it is committed to maintaining open markets to help the global recovery, and expressed hope that like the Information Technology Agreement (ITA), free trade will also be achieved in machinery and chemicals.

In its communication to the Committee (G/MA/W/101), Canada said that in its 2009 federal budget, the government eliminated the MFN applied rate of customs duty on a range of imported machinery and equipment items.

As of 28 January 2009, 214 tariff lines, with a simple average MFN rate of 5.2 percent and accounting for over Canadian $2 billion in annual dutiable imports, saw their MFN applied rates of customs duty reduced to zero, said the communication.

In its 2010 federal budget, tabled in Parliament on 4 March 2010, the Canadian government announced a second set of tariff liberalization measures that eliminates the MFN applied rates of customs duty on an additional 1,541 tariff items.

The majority of these items, with a simple average MFN rate of 7.2 percent, became duty-free effective as of 5 March 2010, with the remainder scheduled to be gradually eliminated, starting on 5 March 2010, by no later than 1 January 2015.

Canada said that as a result of this latest action, it will have eliminated its remaining MFN applied rates of customs duty on manufacturing inputs and machinery and equipment and liberalized an additional Canadian $5 billion in annual dutiable imports.

Taken together, and when compared to the situation pre-budget 2009, these actions will result in the liberalization of approximately 43 percent of MFN applied dutiable tariff items and close to 15 percent of dutiable imports, it added.

According to trade officials, Hong Kong China commended Canada's initiative.

Also at the Committee meeting, the WTO Secretariat reported that since the Integrated Data Base (on bound and applied tariffs of WTO members) came on line in February, 3,000 users have registered, and that some 20,000 hits on this site had been registered. The largest number of users are students, followed by the private sector, although there was also a large number of government users, said trade officials.

The World Customs Organization (WCO) gave a presentation at the Committee meeting on the Harmonized System 2012 (customs nomenclature). The WCO representative said that the number of tariff lines has increased to 5,212 from HS2007, and included more subheadings for agricultural products.

According to trade officials, many of the requests for amendments and additions came from the UN Food and Agriculture Organization (FAO). Some of the changes are on: new sub-headings for bio-diesels, fish-heads, grade seeds; plantains; non-centrifugal sugar etc.

HS2012 has also been streamlined with the deletion of subheadings on goods such as typewriters.

The Committee also elected Mr. Dan Owoko of Kenya as its new chair.

Meanwhile, at an informal meeting of the WTO Negotiating Group on Rules, also on Thursday, the Chair, Ambassador Guillermo Valles Galmes of Uruguay, made a farewell address to the negotiators on the anti-dumping issue, saying that he is convinced that when the time comes, the delegations will be well-prepared to make technical decisions and political trade-offs to bring the negotiations to a successful conclusion.

The Chair, who is returning to the capital Montevideo, while acknowledging that he had not yet seen the narrowing of gaps in a number of anti-dumping issues, called on Members to remain engaged, on a technical basis, on the most crucial issues.

According to trade officials, the Chair suggested keeping the investigative authorities close to the process, and to keep holding meetings in different configurations.

The Uruguayan envoy further said that anti-dumping is a key element of the Rules package, and that all delegations would need at some stage to make compromises. He called on Members to negotiate with the future in mind - and not to anchor themselves in the past - because they are negotiating the rules of the game for the next decades.

According to trade officials, many delegations commended the Chair's strong leadership during the past five-and-a-half years, adding that his current Rules text (submitted in December 2009) remains a good basis for the negotiations.

The Rules Group, under Ambassador Valles Galmes, will continue meeting next week, this time on subsidies, and fisheries subsidies. +