NEWS RELEASES

January 11, 2005 (1:25 p.m. EST)
No. 4

NAFTA PARTNERS CONTINUE TO LIBERALIZE RULES OF ORIGIN

International Trade Minister Jim Peterson announced the implementation of further measures to help Canadian businesses with the reduction of export-related transaction costs in the NAFTA region.

“This is a perfect example of how NAFTA continues to evolve to reflect today’s realities. It is important that the NAFTA rules of origin continue to reflect the commercial reality of North America today,” said Minister Peterson. “Making the rules of origin more liberal and easier to comply with will increase the volume of duty-free trade among the NAFTA partners.”

On January 1, 2005, Canada and the United States implemented measures to liberalize the NAFTA rules of origin applicable to tea, spices, carrageenan, seasonings, precious metals, speed drive controllers and their printed assemblies, household appliances, loudspeakers, thermostats, parts for various machinery and equipment, and toys. The measures will come into force in Mexico following ratification by the Mexican Senate.

Rules of origin are used to determine whether a good is eligible for preferential tariff treatment under NAFTA. The decision to continue to work on liberalizing the rules of origin was taken by the NAFTA Trade Ministers at their October 7, 2003, meeting in Montreal. These changes will make it easier for manufacturers of these products to meet the NAFTA rules of origin and to qualify for duty-free treatment under NAFTA. This will increase the competitiveness of Canadian exporters. It has been estimated that these products represent US$20 billion in total trilateral trade.

The new rules of origin were developed jointly by the governments of Canada, the United States and Mexico in consultation with industry. This is part of a continuing effort to liberalize NAFTA rules of origin. For example, in 2003, NAFTA rules of origin were liberalized for seven products including alcoholic beverages and petroleum/topped crude oil. Discussions are underway with the United States and Mexico on further changes to rules of origin affecting a broader range of products.

The complete NAFTA Annex 401 on Specific Rules of Origin is available at http://www.international.gc.ca/nafta-alena/ann-401-en.asp.

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For further information, media representatives may contact:

Jacqueline LaRocque
Director of Communications
Office of the Minister of International Trade
(613) 992-7332

Media Relations Office
International Trade Canada
(613) 995-1874
http://www.international.gc.ca