Frequently Asked Questions: General Preferential Tariff Review

What is the General Preferential Tariff?

In the early 1970s, the United Nations Conference on Trade and Development recommended that developed economies grant autonomous and non-reciprocal tariff preferences to imports from developing countries under a Generalized System of Preferences (GSP) in an effort to promote the industrialization of developing countries.

Canada’s program, the General Preferential Tariff (GPT), was implemented in 1974 and is legislated in the Customs Tariff on a 10-year cycle. Most developed economies, including the United States, the European Union and Japan, also have GSP schemes for developing countries.

Why do we provide unilateral tariff preferences to developing countries?

The GPT was put in place with the policy intent of encouraging imports from developing countries to increase their export earnings and promote their economic growth.

Canada also provides duty-free access to imports from 49 least developed countries under the Least Developed Country Tariff (LDCT). This review does not contemplate changes to the LDCT.

Why is the GPT being reviewed now?

The GPT is legislated in the Customs Tariff on a 10-year cycle and is set to expire on June 30, 2014. As a comprehensive review takes time, we are starting ahead of deadline.

In addition, the global economic landscape has changed considerably since the GPT was introduced in 1974, including significant shifts in the income levels and trade competitiveness of a number of developing countries. To better reflect the current global economy and to ensure that this form of development assistance is aligned with Canada’s development policy objectives, Economic Action Plan 2012 announced that the Government would undertake a comprehensive review of Canada’s tariff regime for developing countries. These consultations are part of that review.

What views are being sought in the consultations?

The Government is seeking the views of interested stakeholders on proposed changes to various elements of the GPT. Details of the proposed changes are outlined in a notice published in the December 22, 2012 edition of the Canada Gazette, Part I. Interested parties wishing to comment on the proposed changes should submit their views in writing by February 15, 2013.