WORLD TRADE  
ORGANIZATION  G/C/W/555 
4 July 2006 
 (06-3197) 
Council for Trade in Goods Original:   English 
  
 
CARIBCAN 
 
Request for Extension of Waiver
 
  
 The following communication, dated 1 July 2006,  is being circulated at the request of the 
delegation of Canada. 
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  I. REQUEST 
 By action of the CONTRACTING PARTIES of the GATT 1947 on 
28 November 1986 (L/6102), Canada was granted a waiver of its obligations under paragraph 1 of 
Article I of the General Agreement, with respect to  the establishment of duty-free treatment to imports 
of eligible products into Canada from beneficiar y Commonwealth Caribbean countries, as provided in 
Section 53 of the Customs Tariff
, R.S., c. 41 (3rd Supp.), in  accordance with the CARIBCAN 
initiative (hereinafter referred to as "CARIBCAN").  This waiver w as initially granted for the period 
15 June 1986 until 15 June 1998.  Paragraph 2 of the Understanding in Respect of Waivers of 
Obligations Under the General Agreement on Tariffs a nd Trade 1994 provides that any waiver in effect 
on the date of entry into force of the World Tr ade Organization (WTO) Agreement shall terminate, 
unless extended in accordance with the procedures se t out in the Understanding and those of Article IX 
of the WTO Agreement, on the date of its expiry or  two years from the date of entry into force of the 
WTO Agreement, whichever is earlier.   Under this agreement, the CARIBCAN waiver granted to 
Canada by the Decision of 28 November 19861 expired on 31 December, 1996." 
  
This original waiver was renewed by a D ecision of the General Council of 14 October 19962.  
This waiver is to expire on 31 December 2006.  Canada requests that Members extend this waiver for 
five years in order that Canada can continue to extend duty-free treatment to the imports of 
Commonwealth Caribbean nations.  This request is made in accordance with th e Guiding Principles to 
be followed in considering applications for wa ivers adopted on 1 November 1956; the Understanding 
in Respect of Waivers of Obligations under th e General Agreement on Tariffs and Trade 1994; and 
paragraphs 3 and 4 of Article IX of the Ma rrakech Agreement Establishing the WTO.  The 
circumstances justifying the renewal of the waiv er and the policy objectives underlying CARIBCAN 
are described below. 
 
II. BACKGROUND 
 Canadian foreign policy has long recognized a special relationship between Canada and the 
Commonwealth Caribbean, stemming, in the first instance, from trade and commercial ties which 
pre-date Canada's Confederati on and continue to the present da y by joint membership in the 
Commonwealth and similar democr atic institutions.  In 1986, in  recognition of this special 
                                                      
1 BISD 33S, p. 97. 
2 WT/L/185. G/C/W/555 
Page 2  
 
  relationship, Canada res ponded positively to the request of the Commonwealth Caribbean to institute 
a package of trade and development assistance me asures to assist them in meeting their economic 
development goals.  The cornerstone of CARI BCAN, as these measures are known, was the 
extension, beginning on June 15, 1986, of prefer ential, one-way duty-free trade for most imports 
originating within Commonw ealth Caribbean countries. 
 
 The considerations that led the CONTRACTIN G PARTIES  to the GATT in 1986 to grant the 
Government of Canada a waiver from its obligatio ns under paragraph 1 of Ar ticle I of the General 
Agreement remain relevant to the present request to extend the waiver for a further 5-year period.  In 
particular: 
 
1. The objective of granting preferential tariff treatment under CARIBCAN continues to be the 
enhancement of the Commonwealth Caribbean 's existing trade and export earnings and 
thereby promote economic development as well as to promote new investment opportunities 
and encourage enhanced economic integration and co-operation within the region.    
 
2. The duty-free treatment provided under CARIBCAN has been shown to promote the 
expansion of trade and economic development of beneficiaries an d with trade, financial and 
development needs of the beneficiaries while not raising barriers for the trade of any other WTO contracting parties.  Between 1986 and t oday, no contracting party to the GATT or a 
member of its successor, the WTO, has requested  consultations with Canada with respect to 
any difficulty or matter arising out of the impl ementation of the provisions of CARIBCAN.   
 3. There is no evidence that th ere has been any diversion of Canada's imports of products 
eligible for duty-free treatment under CARIBC AN originating in WTO Members who are not 
beneficiaries. 
 
4. CARIBCAN is not an impediment to the reducti on of tariffs and other restrictions on trade on 
a most-favoured-nation basis.  Moreover, CARI BCAN has not prevented the further reduction 
of Canadian General Preferential Tariff rat es available to all developing countries. 
 
III. COVERAGE 
 Product and country coverage is specified in  the enabling legislation (Section 53 of the 
Customs Tariff Act, R.S., c. 41 (3rd Supp)).     The duty-free treatment is provided in respect of all products, except:  
• products of HS Chapters 50 to 65 inclusive; 
 
• products of HS heading 42.02, other than leather luggage of tariff item 
No. 4202.11.00 or 420291.90, or products of HS heading No. 46.02, other than vegetable fibre baskets of tariff item No. 4602.10.92;  
 
• products of tariff item No. 2710.00.20, 2905.11.00, 3403.11.10, 3403.19.10 or 
4203.10.00; and, 
 
• products subject to MFN rates of duty which are more than thirty-five per cent (35%). 
 
 To qualify for the duty free tariff treatment acco rded to Commonwealth Caribbean countries, 
at least sixty per cent of the ex-factory price of the goods as packed for shipment to Canada must 
originate in one or more beneficiary countries or  Canada.  The sixty per cent qualifying content may  G/C/W/555 
 Page 3 
 
 
  be cumulated from various CARIBCAN  beneficiary countries or Canada.  The goods must be finished 
in the beneficiary country in the form in which they are imported into Canada. 
  The list of countries eligible to receive the duty-free benefits accorded under CARIBCAN 
contains the following countries:  Anguilla, Anti gua and Barbuda, Baham as, Barbados, Belize, 
Bermuda, the British Virgin Islands, the Cayman Islands, Dominica, Grenada, Guyana, Jamaica, 
Montserrat, St. Kitts and Nevis, St. Lucia, St. Vi ncent and the Grenadines, Trinidad and Tobago, and 
the Turks and Caicos Islands.     In light of the continuing relevance of these considerations and taking into account 
information pertaining to covera ge, Canada requests that the Me mbers of the WTO approve its 
application for a waiver renewal. 
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