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Amendments to Annex 401
Specific Rules of Origin
NAFTA PARTNERS CONTINUE TO LIBERALIZE RULES OF ORIGIN
On January 1, 2005 Canada 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.
This action is the result of continuing work being carried out by the NAFTA
Working Group on Rules of Origin to liberalize the rules for the purpose of
further stimulating trade. On January 1, 2003, rules were liberalized on seven
products including alcoholic beverages and petroleum/topped crude.
Rules of origin are used to determine whether a good is eligible for preferential
treatment under NAFTA. 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 U.S. $20 billion in total
trilateral trade.
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. The new rules
of origin were developed jointly by the Governments of Canada, the United States
and Mexico in consultation with industry. Work is continuing on a broad range
of products.
The changes are effective in Canada and the United States as of January 1,
2005, and will come into force in Mexico following ratification by the Mexican
Senate.
The complete NAFTA Annex 401 on Rules of Origin is available at the following address:
http://www.dfait-maeci.gc.ca/nafta-alena/ann-401-en.asp
Tea and Spices - Subheading 0902.10-0902.40, 0904.12, 09.07, 0908.10-0909.50,
0910.10, 0910.50-0910.91, 0910.99, 1207.91.
Explanation: The new rules allow tea that is fermented and/or tea that
is packaged in the NAFTA territory to satisfy the rule of origin. The rules
also allow the crushing or grinding in the NAFTA territory of certain non-originating
spices such as pepper, cinnamon, cloves, nutmeg, ginger, turmeric, and dill
seeds to confer origin.
New rules of origin:
| 0902.10-0902.40 |
A change to subheading 0902.10 through 0902.40 from any other
subheading, including another subheading within that group. |
| 0904.12 |
A change to subheading 0904.12 from any other subheading. |
| 0906.20 |
A change to subheading 0906.20 from any other subheading. |
| 09.07 |
A change to a good of heading 09.07 from within that heading
or any other chapter. |
| 0908.10-0909.50 |
A change to a good of any of subheading 0908.10 through
0909.50 from within that subheading or any other chapter. |
| 0910.10 |
A change to a good of subheading 0910.10 from within that
subheading or any other chapter. |
| 0910.30 |
A change to a good of subheading 0910.30 from within that
subheading or any other chapter. |
| 0910.50-0910.91 |
A change to subheading 0910.50 through 0910.91 from any
other subheading, including another subheading within that group. |
| 0910.99 |
A change to dill seeds, crushed or ground, of subheading
0910.99 from dill seeds, neither crushed nor ground, of subheading 0910.99
or any other chapter; or |
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A change to any other good of subheading 0910.99 from any
other chapter. |
| 1207.91 |
A change to a good of subheading 1207.91 from within that
subheading or any other chapter. |
Carrageenan - Subheading 1302.39
Explanation: The new rule allows originating carrageenan (food thickener)
to be blended with specified quantities of non-originating carrageenan without
losing its originating status.
New rule of origin:
| 1302.39 |
A change to carrageenan of subheading 1302.39 from within
that subheading or any other chapter, provided the non-originating materials
of subheading 1302.39 do not exceed 50 percent by weight of the good; or
A change to any other good of subheading 1302.39 from any other chapter,
except from concentrates of poppy straw of subheading 2939.11. |
Seasonings — Subheading 2103.90
Explanation: The new rule of origin allows mixed condiments or seasonings
containing non-originating ingredients classified in Chapter 21 to qualify as
originating.
New rule of origin:
| 2103.90 |
A change to mixed condiments or mixed seasonings of subheading
2103.90 from yeasts of subheading 2102.10 or 2102.20 or any other chapter;
or
A change to any other good of subheading 2103.90 from any other chapter. |
Precious metals - gold, silver, platinum, palladium and rhodium - Subheadings
7106.10-7106.92, 7108.11-7108.20, 7110.11-7110.49, 71.12
Explanation: The new rules will allow the use of non-originating unrefined
precious metals and secondary precious metals in the production of originating
precious metals.
New rule of origin:
| 7106.10-7106.92 |
A change to subheading 7106.10 through 7106.92 from any
other subheading, including another subheading within that group; or
No required change in tariff classification to subheading 7106.91, whether
or not there is also a change from another subheading, provided that the
non-originating materials undergo electrolytic, thermal or chemical separation
or alloying. |
| 7108.11-7108.20 |
A change to subheading 7108.11 through 7108.20 from any
other subheading, including another subheading within that group; or
No required change in tariff classification to subheading 7108.12, whether
or not there is also a change from another subheading, provided that the
non-originating materials undergo electrolytic, thermal or chemical separation
or alloying |
| 7110.11-7110.49 |
A change to subheading 7110.11 through 7110.49 from any
other subheading, including another subheading within that group. |
| 71.12 |
A change to heading 71.12 from any other heading. |
Speed drive controllers and their printed circuit assemblies - Subheading
8504.40.bb and 8504.90.aa
Explanation: The new rule of origin allows speed drive controllers
made with non-originating printed circuit assemblies to qualify as originating;
the printed circuit assemblies will be subject to a less onerous tariff change
rule.
New rule of origin:
| 8504.40.bb |
A change to tariff item 8504.40.bb from any other subheading. |
| 8504.90.aa |
A change to tariff item 8504.90.aa from any other tariff
item. |
Household appliances - Subheadings 8414.51, 8509.40-8509.80, 8516.10-8516.80
Explanation: Under these rules, products like personal fans, food mixers,
heaters, hair dryers, microwave ovens, coffee makers and toasters no longer
have to satisfy a regional value content requirement.
New rule of origin:
| 8414.51 |
A change to subheading 8414.51 from any other subheading. |
| 8509.40-8509.80 |
A change to subheading 8509.40 through 8509.80 from any
other subheading, including another subheading within that group. |
| 8516.10-8516.80 |
A change to subheading 8516.10 through 8516.80 from any
other subheading, including another subheading within that group. |
Loudspeakers - Subheadings 8518.10-8518.29 and 8518.90
Explanation: The new rule reduces the regional value content requirement
level and allows the use of a broader range of non-originating components provided
the regional value content is met.
New rule of origin:
| 8518.10-8518.29 |
A change to subheading 8518.10 through 8518.29 from any
other heading; or
A change to a good of any of subheading 8518.10 through 8518.29 from within
that subheading or any other subheading within heading 85.18, including
another subheading within that group, whether or not there is also a change
from any other heading, provided there is a regional value content of not
less than:
(a) 30 percent where the transaction value method is used, or
(b) 25 percent where the net cost method is used. |
| 8518.90 |
A change to subheading 8518.90 from any other heading; or
A change to subheading 8518.90 from any other subheading within heading
85.18, whether or not there is also a change from any other heading, provided
there is a regional value content of not less than:
(a) 30 percent where the transaction value method is used, or
(b) 25 percent where the net cost method is used. |
Parts - Subheadings 8473.30, 8504.90, 8505.90, 8506.90, 8507.90, 8509.90,
8511.90, 8514.90, 8516.90, 8517.90, 8529.10, 8529.90, 8530.90, 8531.90, 8532.90,
8533.90, 8538.10-8538.90, 8540.91, 8540.99, 9013.90, 9014.90, 9024.90, 9026.90,
9027.90, 9029.90, 9030.90, 9032.90, 90.33
Explanation: In consideration that some parts used to make parts designated
for specified equipment or machinery are not separately provided for under different
classification provisions, these rules remove the limits on the type of non-originating
inputs that can be used provided the regional value content is met.
New rule of origin:
| 8473.30 |
A change to subheading 8473.30 from any other heading; or
No required change in tariff classification to subheading 8473.30, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8504.90 |
A change to subheading 8504.90 from any other heading; or
No required change in tariff classification to subheading 8504.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8505.90 |
A change to subheading 8505.90 from any other heading; or
No required change in tariff classification to subheading 8505.90, provided
there is a regional value content of not less than: (a) 60 percent where
the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8506.90 |
A change to subheading 8506.90 from any other heading, except
from tariff item 8548.10.aa; or
No required change in tariff classification to subheading 8506.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8507.90 |
A change to subheading 8507.90 from any other heading, except
from tariff item 8548.10.aa; or
No required change in tariff classification to subheading 8507.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8509.90 |
A change to subheading 8509.90 from any other heading; or
No required change in tariff classification to subheading 8509.90, provided
there is a regional value content of not less than: (a) 60 percent where
the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8511.90 |
A change to subheading 8511.90 from any other heading; or
No required change in tariff classification to subheading 8511.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8514.90 |
A change to subheading 8514.90 from any other heading; or
No required change in tariff classification to subheading 8514.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8516.90 |
A change to subheading 8516.90 from any other heading; or
No required change in tariff classification to subheading 8516.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8517.90 |
A change to subheading 8517.90 from any other heading; or
No required change in tariff classification to subheading 8517.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8529.10 |
A change to subheading 8529.10 from any other heading; or
No required change in tariff classification to subheading 8529.10, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8529.90 |
A change to subheading 8529.90 from any other heading; or
No required change in tariff classification to subheading 8529.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8530.90 |
A change to subheading 8530.90 from any other heading; or
No required change in tariff classification to subheading 8530.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8531.90 |
A change to subheading 8531.90 from any other heading; or
No required change in tariff classification to subheading 8531.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8532.90 |
A change to subheading 8532.90 from any other heading; or
No required change in tariff classification to subheading 8532.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8533.90 |
A change to subheading 8533.90 from any other heading; or
No required change in tariff classification to subheading 8533.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8538.10-8538.90 |
A change to subheading 8538.10 through 8538.90 from any
other heading; or
A change to subheading 8538.10 through 8538.90 from any other subheading
within that group, whether or not there is also a change from any other
heading, provided there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8540.91 |
A change to subheading 8540.91 from any other heading; or
No required change in tariff classification to subheading 8540.91, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8540.99 |
A change to subheading 8540.99 from any other heading; or
No required change in tariff classification to subheading 8540.99, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 8543.90 |
A change to subheading 8543.90 from any other heading; or
No required change in tariff classification to subheading 8543.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9005.90 |
A change to subheading 9005.90 from any other heading;
or
No required change in tariff classification to subheading 9005.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used.
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| 9006.91-9006.99 |
A change to subheading 9006.91 through 9006.99 from any
other heading; or
A change to a good of any of subheading 9006.91 through 9006.99 from within
that subheading, whether or not there is also a change from any other heading,
provided there is a regional value content of not less than: (a) 60
percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9007.91 |
A change to subheading 9007.91 from any other heading; or
No required change in tariff classification to subheading 9007.91, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9008.90 |
A change to subheading 9008.90 from any other heading; or
No required change in tariff classification to subheading 9008.90,
provided there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9010.90 |
A change to subheading 9010.90 from any other heading; or
No required change in tariff classification to subheading 9010.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9013.90 |
A change to subheading 9013.90 from any other heading; or
No required change in tariff classification to subheading 9013.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9014.90 |
A change to subheading 9014.90 from any other heading; or
No required change in tariff classification to subheading 9014.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9024.90 |
A change to subheading 9024.90 from any other heading; or
No required change in tariff classification to subheading 9024.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9026.90 |
A change to subheading 9026.90 from any other heading; or
No required change in tariff classification to subheading 9026.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9027.90 |
A change to subheading 9027.90 from any other heading; or
No required change in tariff classification to subheading 9027.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9029.90 |
A change to subheading 9029.90 from any other heading; or
No required change in tariff classification to subheading 9029.90,
provided there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or(b) 50 percent
where the net cost method is used. |
| 9030.90 |
A change to subheading 9030.90 from any other heading; or
No required change in tariff classification to subheading 9030.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 9032.90 |
A change to subheading 9032.90 from any other heading; or
No required change in tariff classification to subheading 9032.90, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
| 90.33 |
A change to heading 90.33 from any other heading; or
No required change in tariff classification to heading 90.33, provided
there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
Thermostats - Subheading 9032.10
Explanation: The proposal allows for the use of a broader range of
non-originating components provided the regional value content is met.
New rule of origin:
| 9032.10 |
A change to subheading 9032.10 from any
other heading; or
A change to a good of subheading 9032.10 from within that subheading or
subheading 9032.89 through 9032.90, whether or not there is also a change
from any other heading, provided there is a regional value content of
not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
Toys - Subheading 9501.00-9505.90
Explanation: The proposed rule allows for the use of a broader
range of non-originating components provided that the toys satisfy the
regional value content requirement.
New rule of origin: |
| 9501.00-9505.90 |
A change to subheading 9501.00 through 9505.90
from any other chapter; or
A change to a good of any of subheading 9501.00 through 9505.90 from
within that subheading or any other subheading within Chapter 95, including
another subheading within that group, whether or not there is also a change
from any other chapter, provided there is a regional value content of
not less than:
(a) 60 percent where the transaction value method is used, or
(b) 50 percent where the net cost method is used. |
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