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Nervous About NAFTA? Know your other options

"Nearly all automotive parts and machinery can be imported into Canada duty free under these provisions."

My opinion on the future of NAFTA? The hysteria in most media coverage can be misleading for businesses. Instead, let’s focus on: what other options do I have for free trade? My trade compliance words to live by – anticipate the gap, plan a solution and launch when necessary. NAFTA is by no means the sole option for trade compliance savings. In fact, there are enough alternatives to fill four categories: relief, refund, reduce and resource.


Even without NAFTA, full duty elimination is still possible. For example, special classification provisions based on product end-use or industry can cancel duty. In fact, nearly all automotive parts and machinery can be imported into Canada duty free under these provisions. As well, free trade zones (FTZ) allow product to be imported duty free if it is later exported out of the country. Lastly, businesses operating a bonded warehouse may qualify for complete deferral of duties and taxes.


Duty drawback is one way businesses can have duty refunded. Importers, exporters, producers or owners may apply to recover the duties paid after the goods have been exported. Another option is duty recovery by filing an entry amendment. Your product may just be classified incorrectly; correcting the HS/HTS code may result in duty refund.


A remission order from the Governor in Council can reduce duty for certain imports. Once you determine if your shipment meets all the conditions of the order it’s as simple as stating the order number on your import entries.  As well, businesses can get temporary permits, import bonds and/or carnets to reduce duty and sometimes taxes on imports. Foreign Trade Zones (FTZ) can also be strategically positioned to reduce duty for goods that will be sold in the USA.


An often-overlooked strategy for trade compliance outside NAFTA is to consider alternate sourcing options.  Canada currently has 17 other free trade agreements and seven more in progress.  As well, Canada and the USA offer duty relief for imports from many developing countries.  Lastly, but certainly not least, is to consider a local vendor.  This may be a very viable option now considering the recent steel and aluminum tariff and the fact that traditional methods listed in this article of duty relief do not touch these non-exempt tariffs.

Move beyond borders. Borderflow Inc. is a Kitchener-based international trade solutions provider specializing in customs brokerage, international trade strategizing and supply chain optimization.  For more information on these free trade options download our whitepaper Secrets of Saving Duty or contact us.