Free-trade with Canada: how to take advantage of the business opportunities abroad?

International Taxes

Free-trade with Canada: how to take advantage of the business opportunities abroad?

At a time when many countries are questioning their degree of economic openness and are retreating into protectionism, Canada opens up to foreign markets. Gradually, Canada positions itself in favour of free trade in order to facilitate its trade with other countries. This article aims to inform you about the different countries that have signed agreements with Canada in order to allow you to deploy your strategy internationally.

CANADA: FREE TRADE AND OPENING TO GLOBAL TRADE

There are currently several free trade agreements in place between Canada and other countries that facilitate doing business in foreign markets. Generally, they have the effect of reducing “tariff” measures such as customs duties, but also the effect on the “non-tariff” barriers such as standards, quotas, and protection of intellectual property.

PREFERENTIAL RULES OF ORIGIN APPLY

The rules of origin concern the criteria used to define the place where a product has been manufactured. These rules specify the proportion of the value and production that must occur collectively in Canada and in the partner country of the free trade agreement in order for the countries to benefit from it. The application of these rules allows avoiding a situation where goods are simply brought into a partner country with an aim to benefit from the preferential advantages of these agreements.

COUNTRIES THAT HAVE SIGNED FREE TRADE AGREEMENTS WITH CANADA

To facilitate your success in foreign markets, you will find below the list of current free-trade agreements between Canada and other countries.

Free trade agreements Countries concerned
North American Free Trade Agreement (NAFTA), in force since 1994 USA, Mexico
In force since 2009 Iceland, Liechtenstein, Norway, Switzerland
In force since 1997 Chile
In force since 2011 Colombia
In force since 2015 Korea
In force since 2002 Costa Rica
In force since 2014 Honduras
In force since 1997 Israel
In force since 2012 Jordan
In force since 2013 Panama
In force since 2009 Peru

 

There exist also agreements signed between the European Union and Ukraine, which will soon come into force. Other agreements (for example, with India and Japan) are still being negotiated and will be a subject of subsequent communication. The rules and exceptions of these agreements can be complex; to consult the details of each agreement, visit the website of the government of Canada, section “Trade and investment agreements” where you will find the source information.

To find out more about the trade between Canada and the European Union, read our previous article discussing the impact of the Comprehensive Economic and Trade Agreement (CETA).

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Find out more about the author of the article

Arnaud Philibert

Arnaud Philibert

Branch manager, Montréal, Canada

I joined the ASD Group in 2013 in its offices in France and managed daily intra- Community VAT from a portfolio of various corporate clients. Subsequently in charge of the opening and management of the ASD office in Montreal, I accompany companies in their VAT compliance issues in the European Union. I assist them in applying tax solutions for their import/export and international sales operations with our experts in the countries concerned by the requests.

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