WORLD TRADE G/L/100
4September 1996
ORGANIZATION(96-3475)
Original: English COUNCIL FOR TRADE INGOODS
19September 1996
CARIBCAN
Request forExtension ofWaiver
Thefollowing communication, dated 3September 1996, hasbeenreceived fromthePermanent
Mission ofCanada.
________________
I REQUEST:
Byaction oftheCONTRACTING PARTIES oftheGATT 1947 on28November
1986 (L/6102), Canada wasgranted awaiver ofitsobligations under paragraph 1ofArticle Iofthe
General Agreement, withrespect totheestablishment ofduty-free treatment toimports ofeligible
products intoCanada frombeneficiary Commonwealth Caribbean countries, asprovided inSection 53
oftheCustomsTariff,R.S.,c.41(3rdSupp.),inaccordancewiththeCARIBCANinitiative(hereinafter
referred toas"CARIBCAN"). Thiswaiver wasinitially granted fortheperiod 15June1986 until
15June1998.
Paragraph2oftheUnderstandinginRespectofWaiversofObligationsUndertheGeneral
Agreement onTariffs andTrade 1994provides thatanywaiver ineffect onthedateofentry intoforce
oftheWorld Trade Organization (WTO) Agreement shallterminate, unless extended inaccordance
withtheprocedures setoutintheUnderstanding andthose ofArticle IXoftheWTO Agreement, on
thedateofitsexpiry ortwoyears fromthedateofentry intoforce oftheWTO Agreement, whichever
isearlier. Under thisagreement, theCARIBCAN waiver granted toCanada bytheDecision of
28November 1986 willexpire on31December, 1996.
CanadarequeststhatMembersextendthe1986waiverfortenyearsinorderthatCanada
cancontinue toextend duty-free treatment totheimports ofCommonwealth Caribbean nations. This
request ismade inaccordance withtheGuiding Principles tobefollowed inconsidering applications
forwaivers adopted on1November 1956; theUnderstanding inRespect ofWaivers ofObligations
under theGeneral Agreement onTariffs andTrade 1994; andparagraphs 3and4ofArticle IXof
theMarrakech Agreement Establishing theWTO. Thecircumstances justifying therenewal ofthe
waiver andthepolicy objectives underlying CARIBCAN aredescribed below.G/L/100
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II BACKGROUND:
Canadian foreign policy haslongrecognized aspecial relationship between Canada
andtheCommonwealth Caribbean, stemming, inthefirstinstance, from trade andcommercial ties
which pre-date Canada 'sConfederation andcontinue tothepresent daybyjointmembership inthe
Commonwealth andsimilar democratic institutions. In1986, inrecognition ofthisspecial relationship,
Canada responded positively totherequest oftheCommonwealth Caribbean toinstitute apackage
oftrade anddevelopment assistance measures toassist them inmeeting theireconomic development
goals. Thecornerstone ofCARIBCAN, asthese measures areknown, wastheextension, beginning
onJune15,1986, ofpreferential, one-way duty-free trade formost imports originating within
Commonwealth Caribbean countries.
Theconsiderations thatledtheCONTRACTING PARTIES totheGATT in1986
togrant theGovernment ofCanada awaiver from itsobligations under paragraph 1ofArticle Iof
theGeneral Agreement remain relevant tothepresent request toextend thewaiver forafurther 10year
period. Inparticular:
1. Theobjective ofgranting preferential tariff treatment under CARIBCAN continues tobethe
enhancement oftheCommonwealth Caribbean 'sexisting tradeandexport earnings andthereby
promote economic development aswellastopromote newinvestment opportunities and
encourage enhanced economic integration andco-operation within theregion. InMarch of
1996, attheCanada-CARICOM Heads ofGovernment Summit heldinSt.George 's,Grenada,
theCARICOM Heads ofGovernment confirmed thattheycontinue toplace considerable
importance onthispreferential access forCaribbean products totheCanadian market.
2. Theduty-free treatment provided under CARIBCAN hasbeenshown topromote theexpansion
oftradeandeconomic development ofbeneficiaries inamanner consistent withtheobjectives
oftheGeneral Agreement andwith thetrade, financial anddevelopment needs ofthe
beneficiaries andhasnotraised barriers orcreated difficulties forthetrade ofanyother
contracting parties. Between 1986andtoday, nocontracting party totheGeneral Agreement
orWTO Member hasrequested consultations withCanada withrespect toanydifficulty or
matter arising outoftheimplementation oftheprovisions ofCARIBCAN.
3. There isnoevidence thattherehasbeenanydiversion ofCanada 'simports ofproducts eligible
forduty-free treatment under CARIBCAN originating inWTO Members whoarenot
beneficiaries.
4. CARIBCAN isnotanimpediment tothereduction oftariffs andother restrictions ontrade
onamost-favoured-nationbasis.Moreover,CARIBCANhasnotpreventedthefurtherreduction
ofCanadian General Preferential Tariff ratesavailable toalldeveloping countries.
III COVERAGE
Product andcountry coverage isspecified intheenabling legislation (Section 53of
theCustoms Tariff Act,R.S., c.41(3rdSupp)).
Theduty-free treatment isprovided inrespect ofallproducts, except:
• products ofHSChapters 50to65inclusive;G/L/100
Page3
• products ofHSheading 42.02, other thanleather luggage oftariff itemNo.4202.11.00 or
420291.90, orproducts ofHSheading No.46.02, other thanvegetable fibrebaskets oftariff
itemNo.4602.10.92;
• products oftariffitemNo.2710.00.20, 2905.11.00, 3403.11.10, 3403.19.10 or4203.10.00;
and
• products subject toMFN ratesofdutywhich aremore thanthirty-five percent(35%).
Toqualify forthedutyfreetariff treatment accorded toCommonwealth Caribbean countries, atleast
sixty percentoftheex-factory price ofthegoods aspacked forshipment toCanada mustoriginate
inoneormorebeneficiary countries orCanada. Thesixtypercentqualifying content maybecumulated
fromvariousCARIBCANbeneficiarycountriesorCanada.Thegoodsmustbefinishedinthebeneficiary
country intheform inwhich theyareimported intoCanada.
Thelistofcountrieseligibletoreceivetheduty-freebenefitsaccordedunderCARIBCAN
containsthefollowingcountries:Anguilla,Antigua-Barbuda,TheBahamas,Barbados,Belize,Bermuda,
theBritish Virgin Islands, theCayman Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat,
St.Christopher andNevis, St.Lucia, St.Vincent andtheGrenadines, Trinidad andTobago, andthe
Turks andCaicos Islands.
Inlightofthecontinuing relevance ofthese considerations andtaking intoaccount
informationpertainingtocoverage,CanadarequeststhattheMembersoftheWTOapproveitsapplication
forawaiver renewal.