WORLD TRADE  
ORGANIZATION   
G/C/W/657 
27 October 2011  
 
(11-5390) 
Council for Trade in Goods Original:   English 
  
 
CARIBCAN 
 
Request for Extension of Waiver 
  
 The following communication, dated 21 October 2011, is being circulated at the request of 
the delegation of Canada. 
_______________ 
 
 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 un der paragraph 1 of Artic le I of the General 
Agreement, with respect to the est ablishment of duty-free treatment to imports of eligible products 
into Canada from beneficiary Co mmonwealth Caribbean countries, as provided in Section 41 of the 
Customs Tariff, S.C., 1997 c. 36, in accordance w ith the CARIBCAN initiative (hereinafter referred 
to as "CARIBCAN").  This waiver was 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 and Trade 1994 provides that any wa iver in effect on the date of entry into force 
of the World Trade Organization (WTO) Agreement shall terminate, unless extended in accordance with the procedures set 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 in to force of the WTO Agreemen t, whichever is earlier. 
Under this agreement, the CARIBCAN waiver gran ted to Canada by the Decision of 28 November 
1986
1 expired on 31 December, 1996. 
 
The original waiver was renewed by a Deci sion of the General Council of 14 October 19962 
until 31 December 2006. On 15 December 2006, the WTO again extended the CARIBCAN waiver3, 
which is to expire on 31 December 2011.  Canada requests that Members extend this waiver for two 
years, until 31 December 2013, 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 the Guiding 
Principles to be followed in considering applica tions for waivers adopted on 1 November 1956; the 
Understanding in Respect of Waivers of Obliga tions under the General Agreement on Tariffs and 
Trade 1994; and paragraphs 3 and 4 of Article IX of the Marrak ech Agreement Establishing the 
WTO.  The circumstances justifying the renewal of the waiver and the policy objectives underlying 
CARIBCAN are described below. 
                                                      
1 BISD 33S, p. 97. 
2 WT/L/185. 
3 WT/L/677. G/C/W/657 
Page 2  
 
  II. BACKGROUND 
 Canadian foreign policy has long recognized a special relationship between Canada and the 
Commonwealth Caribbean, stemming, in the first in stance, from trade and commercial ties which pre-
date Canada's Confederation and continue to  the present day by joint membership in the 
Commonwealth and similar democr atic institutions.  In 1986, in  recognition of this special 
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 15 June, 1986, of pref erential, one-way duty-free trade for most imports 
originating within Commonw ealth Caribbean countries. 
 
 The considerations that led the CONTRACT ING 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 2-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 41 of the 
Customs Tariff, S.C., 1997 c. 36.   
  The duty-free treatment is provided in respect of all products, except:  
 products of HS Chapters 50 to 65 inclusive; 
 
 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/657 
 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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  G/C/W/657 
Page 4  
 
  ANNEX 
 
WORLD TRADE  
ORGANIZATION   
 
WT/L/XXX 
 
  
Council for Trade in Goods Original:   English 
   
CARIBCAN 
 
Draft Decision of....2011 1 
 
 
 The General Council, 
  Having regard to paragraphs 3 and 4 of Article IX of the Marrakesh Agreement Establishing 
the World Trade Organization ("WTO Agreement");    Conducting the function of the Ministerial Conference in the interval between meetings 
pursuant to paragraph 2 of Article IV of the WTO Agreement; 
  Taking note  of the request of the Government of Ca nada for a renewal of the waiver from its 
obligations under paragraph 1 of Ar ticle I of the General Agreement
2 for provision of duty-free 
treatment for imports of eligible products origin ating in beneficiary Caribbean countries as provided 
for in Section 41 of the Customs Tariff, S.C ., 1997 c. 36, in accordance with the CARIBCAN 
initiative (hereinafter referred to  as "CARIBCAN"); such waiver having been initially granted by the 
CONTRACTING PARTIES of the GATT 1947 on 28 November 1986 for the period from 15 June 1986 until 31 December 1996, renewed by the General Council on 14 October 1996 for a period 
from 1 January 1997 until 31 December 2006 and on 15 December 2006 for a period from 1 January 2007 until 31 December 2011; 
 
 Bearing in mind  the 1979 Decision on Differential and More Favourable Treatment, 
Reciprocity and Fuller Participation of Developing Countries;   Considering  that the objective of granting prefer ential tariff treatment under CARIBCAN is 
to enhance the Commonwealth Caribbean's existi ng 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; 
  Considering also that the duty-free treatment pr ovided under CARIBCAN is designed to 
promote the expansion of trade and economic devel opment of beneficiaries in a manner consistent 
with the objectives of the GATT 1994 and with the tr ade, financial and development needs of the 
beneficiaries and not to raise barriers or to cr eate difficulties for the trade of other Members; 
 
                                                      
1Adopted in accordance with the D ecision-Making Procedures under Articles IX and XII of the WTO 
Agreement agreed by the General Council (WT/L/93).  
2 G/C/W/657.   G/C/W/657 
 Page 5 
 
 
   Considering,  moreover, that the duty-free treatment provided under CARIBCAN should not 
prejudice the interests of other Members not benefit ting from such treatment and that it is expected 
that the extension of such duty-free treatment w ill not cause a significant diversion of Canada's 
imports of products eligible for duty-free treat ment under CARIBCAN originating in Members who 
are not beneficiaries; 
 
 Having regard  to the assurances that the Governme nt of Canada does not envisage the 
introduction of any discriminatory non-tariff meas ure, in pursuance of CARIBCAN, which would 
adversely affect the trade of Members who are not beneficiary countries;  
 Considering  that the duty-free treatment provided under CARIBCAN by the Government of 
Canada shall not constitute an im pediment to the reduction or e limination of tariffs and other 
restrictions to trade on a most-favoured-nation basis;   Considering , furthermore, that the duty-free tr eatment provided under CARIBCAN by the 
Government of Canada shall not adversely affect the maintenance, operation and improvement of the 
General Preferential Tariff (GPT) of Canada;   Noting , furthermore, the assurances given by the Government of Canada that it will, upon 
request, promptly enter into consultations with  any Members on matters falling under the provisions 
of the GATT 1994 and related to the applications of this Decision; 
 
 Having regard  to the Guiding Principles to be followed in considering applications for 
waivers adopted on 1 November 1956, the Understa nding in Respect of Waivers of Obligations under 
the General Agreement on Tariffs and Trade 1994, and paragraphs 3 and 4 of Article IX of the 
Marrakesh Agreement Establishing the World Trade Organization (hereinafter "WTO Agreement"); 
 
 Decides , in view of the exceptional circumstances set out above, that : 
 1. Subject to the terms and cond itions set out hereunder, the pr ovisions of paragraph 1 of  
Article I of the GATT 1994 shall be waived until 31  December 2013, to the extent necessary to permit 
the Government of Canada to provide duty-free treatment to eligible imports of Commonwealth 
Caribbean countries benefiting from the provision of  CARIBCAN, without being required to extend 
the same duty-free treatment to like products of any other Member.  2. Such duty-free treatment shall be designed not to raise barriers or create undue difficulties for the trade of other Members and provides no basis for establishing rights of access to the Canadian 
market on the basis of discriminatory non-tariff measures. 
 3. The Government of Canada will submit to  the General Council an annual report on the 
implementation of the trade-rela ted provisions of CARIBCAN with a view to facilitating the annual 
review provided for in paragraph 4 of Article IX  of the WTO Agreement.  The Government of 
Canada shall promptly notify Members of any chang es in the legislation covered by this waiver and 
any trade-related measure taken under CARIBCAN, in particular any modifications in the status of 
eligible imports and the duty-free treatment thereof,  and shall furnish them with all the information 
they may deem appropriate relating to such action. G/C/W/657 
Page 6  
 
  4. The Government of Canada will, upon request, promptly ente r into consultations with any 
interested Member with respect to any difficulty or  matter that may arise as a result of implementation 
of the trade related provisions of CARIBCAN; where a Member considers that any benefit accruing to 
it under the GATT 1994 may be or is being impaired unduly as a result of such implementation, such 
consultation shall examine the possibility of action fo r a satisfactory adjustment of the matter.  This 
Decision does not affect Members' rights as set forth in the Understanding in Respect of Waivers of 
Obligations under the GATT 1994.   
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