Order Amending the Import Control List and the Export Control List: SOR/2021-70

Canada Gazette, Part II, Volume 155, Number 8

Registration
SOR/2021-70 March 29, 2021

EXPORT AND IMPORT PERMITS ACT

P.C. 2021-241 March 26, 2021

Whereas the Administrator in Council is of the opinion that it is necessary to control the export, transfer and importation of certain goods to implement the Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland;

Therefore, His Excellency the Administrator of the Government of Canada in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to paragraphs 3(1)(d) and 5(1)(e) and section 6 footnote a of the Export and Import Permits Act footnote b, makes the annexed Order Amending the Import Control List and the Export Control List.

Order Amending the Import Control List and the Export Control List

Import Control List

1 (1) Paragraph 86.98(a) of the Import Control List footnote 1 is replaced by the following:

(2) Paragraph 86.98(c) of the List is replaced by the following:

2 (1) Paragraph 86.99(a) of the List is replaced by the following:

(2) Paragraph 86.99(c) of the List is replaced by the following:

3 Sections 114 to 116 of the List are replaced by the following:

114 Carcasses and half-carcasses of bovine animals, fresh, chilled or frozen, that do not originate in Chile, a CUSMA country, an EU country or other CETA beneficiary or a CUKTCA beneficiary and are classified under tariff item No. 0201.10.10, 0201.10.20, 0202.10.10 or 0202.10.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.

115 Cuts of meat of bovine animals, fresh, chilled or frozen, with bone in, that do not originate in Chile, a CUSMA country, an EU country or other CETA beneficiary or a CUKTCA beneficiary and are classified under tariff item No. 0201.20.10, 0201.20.20, 0202.20.10 or 0202.20.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.

116 Boneless meat of bovine animals, fresh, chilled or frozen, that does not originate in Chile, a CUSMA country, an EU country or other CETA beneficiary or a CUKTCA beneficiary and is classified under tariff item No. 0201.30.10, 0201.30.20, 0202.30.10 or 0202.30.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.

4 Section 125.2 of the List is replaced by the following:

125.2 Milk protein substances with a milk protein content of 85% or more by weight, calculated on a dry matter basis, that do not originate in a CUSMA country, an EU country or other CETA beneficiary, a CUKTCA beneficiary, Chile, Costa Rica or Israel and that are the subject of two commitments signed by the Government of Canada on June 12, 2008, one with the European Communities and the other with the Government of Switzerland, relating to the modification, in Canada's schedule of concessions pursuant to the Agreement Establishing the World Trade Organization, to Canada's concession on tariff item No. 3504.00.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff with regard to those substances.

Export Control List

5 (1) The portion of item 5210 of the schedule to the Export Control List footnote 2 before paragraph (b) is replaced by the following:

5210 Vehicles classified under subheadings 8703.21, 8703.22, 8703.23, 8703.24, 8703.31, 8703.32, 8703.33, 8703.40, 8703.50, 8703.60, 8703.70, 8703.80 and 8703.90 of Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff, made by the European Union, for export to an EU country or other CETA beneficiary, or of the Tariff of the United Kingdom, established by regulations made under section 8 of the Taxation (Cross-Border Trade) Act 2018, c. 22, of the United Kingdom, for export to a CUKTCA beneficiary, that

(2) Paragraph 5210(c) of the schedule to the List is replaced by the following:

Coming into Force

6 This Order comes into force on the day on which section 16 of the Canada – United Kingdom Trade Continuity Agreement Implementation Act, chapter 1 of the Statutes of Canada, 2021, comes into force, but if it is registered after that day, it comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order or the Regulations.)

Issues

The United Kingdom (U.K.) departed the European Union (EU) Single Market on January 1, 2020, and lost the preferential terms of trade that have been provisionally applied under the Canada-EU Comprehensive Economic and Trade Agreement (CETA) since September 21, 2017.

To ensure that Canadian businesses will continue to enjoy preferential trade with the U.K., Canada and the U.K. have agreed to a transitional trade agreement that replicates and preserves access to the benefits provided in CETA on a bilateral basis. The Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland (the Agreement) will remain in place until Canada and the U.K. negotiate a comprehensive free trade agreement that can be best tailored to the bilateral relationship and interests.

The Agreement was signed on December 9, 2020, and royal assent of the Canada – United Kingdom Trade Continuity Agreement Implementation Act (the Act) was obtained. To fully implement the Act and enable application of the Agreement, a number of regulations and orders are necessary to fully implement Canada's commitments under the Agreement.

Import Control List

With CETA's provisional application, Canada added certain textile and apparel goods (covered under CETA's origin quotas) to the Import Control List to ensure that only the negotiated quantity of qualifying goods can enter the Canadian market from the EU at the preferential tariff rates. The origin quotas provide goods with more flexible, alternative rules of origin, separate from the main rules of origin for goods under CETA, in order for these goods to receive preferential tariff access. To minimize disruption to Canada and the U.K.'s trade relationship, Canada agreed to extend these CETA commitments for U.K.-originating textile and apparel products under the Agreement.

Additionally, the Agreement maintains the removal of import controls for certain originating goods that were implemented under CETA.

Export Control List

As a result of CETA's provisional application, Canada also amended the Export Control List to add certain origin quota-eligible goods in order to provide orderly export marketing of Canadian exports of agricultural products, certain apparel products and vehicles to the EU under the origin quotas. Trade with the U.K. under CETA for certain origin quota items has prompted stakeholders to request continued control under the Agreement in order to facilitate orderly export marketing of these goods.

Export Permits Regulations (Non-strategic Products)

The Export Permits Regulations (Non-strategic Products) set out the information that an applicant must provide when requesting an export permit for non-strategic goods (e.g. agricultural and food products, apparel goods, and vehicles) on the Export Control List.

Objective

To implement Canada's commitments under the Agreement.

Description and rationale

The Order Amending the Import Control List and the Export Control List (the Order) has two main components: (1) amendments to the Import Control List relating to the administration of import-related origin quotas and maintaining the removal of import controls for certain products originating from the U.K.; and (2) amendments to the Export Control List relating to the administration of the export-related origin quota for vehicles. The Regulations Amending the Export Permits Regulations (Non-strategic Products) update the Export Permits Regulations (Non-strategic Products) resulting from the amendments to the Export Control List.

Import Control List

The Order amends the Import Control List to include the U.K. as an eligible country for imports of origin quota textile and apparel goods. In order to implement Canada's commitments under the Agreement and ensure continued preferential access for goods imported from the U.K., these amendments enable the Minister to continue to issue permits and allow imports at the preferential tariff rates. Adding the goods to the Import Control List will also allow Canada to monitor imports, ensuring that the negotiated quantities are not exceeded.

The Order also amends the text of items 114, 115, 116 and 125.2 of the Import Control List to maintain the exclusion of certain beef and veal products and milk protein substances originating from the U.K. from import controls. Should these amendments not be implemented, importers of these items would be required to obtain permits in order to import these products.

Export Control List

The Order also amends the Export Control List to maintain trade controls for U.K.-destined origin quota-eligible vehicles that were previously added to the Export Control List under CETA, in order to facilitate the orderly export marketing of these goods, and therefore authorize the Minister to administer the origin quota through the issuance of export permits.

In order to issue export permits, the U.K. must be cited as an eligible destination in the appropriate Export Control List items, previously added under CETA, effective as of the entry-into-force date of the Agreement. Without this amendment, Canada would be unable to issue export permits for these goods destined to the U.K.

Pursuant to the Agreement, following Canada's notification of goods requiring export permits, the U.K. will only apply the preferential tariffs to those goods accompanied by Canadian government-issued documentation. Pursuant to stakeholder interests, amendments are needed to ensure the orderly export marketing of these goods, eligible for preferential tariff treatment on importation into the U.K., as was done under CETA.

Export Permits Regulations (Non-strategic Products)

The Regulations Amending the Export Permits Regulations (Non-strategic Products) amend the Export Permits Regulations (Non-strategic Products), to add a reference to the appropriate customs tariff for exports to the U.K. This amendment is required to ensure alignment with the goods added to the Export Control List under the Agreement in order for the Minister to issue export permits for these goods.

Consultation

A Canada Gazette notice was published in July 2018 informing Canadians of proposed transitional trade agreement negotiations with the U.K. and the Government's efforts to mitigate disruption to businesses due to the U.K. leaving the EU. As discussions leading to the Agreement were focused on replicating already-into-force CETA provisions on a bilateral basis with the U.K., broad public consultations were not undertaken. Furthermore, given that these regulatory measures replicate CETA provisions and are consequential to the Agreement and Act, no consultations or prepublication were required.

Global Affairs Canada sought stakeholder feedback related to export controls and orderly export marketing of the goods for continued trade with the U.K. under the Agreement in November and December 2020. Stakeholders that had actively exported origin quota vehicles to the U.K. under CETA expressed an interest in the continued administration of the origin quota goods, and the requirement for export permits, in order to provide certainty of access upon importation into the U.K.

The Government of Canada will seek the views of Canadians from across the country and from all sectors and backgrounds once Canada and the U.K. are ready to launch negotiations toward a possible comprehensive free trade agreement.

Small business lens

Analysis under the small business lens determined that these amendments will benefit small businesses, as they will ensure continued access at the preferential tariff rates for goods traded between Canada and the U.K. and the orderly export marketing of certain goods.

One-for-one rule

The one-for-one rule does not apply to these amendments, as there is no change in administrative costs or burden to businesses.

Contacts

Elizabeth Clarke
Deputy Director
Non-supply Managed Trade Controls Division
Global Affairs Canada
111 Sussex Drive
Ottawa, Ontario
Telephone: 343‑203‑4366
Email: Elizabeth.Clarke@international.gc.ca

Blair Hynes
Deputy Director
Supply-managed Trade Controls Division
Global Affairs Canada
111 Sussex Drive
Ottawa, Ontario
Telephone: 343‑203‑4353
Email: Blair.Hynes@international.gc.ca