LDCT Withdrawal: Cape Verde, Samoa, Tuvalu, Vanuatu

Summary#

The Least Developed Country Tariff Withdrawal (2023 LDCT Review) Order: SOR/2023-208 removes the tariff preference known as the Least Developed Country Tariff for goods originating in Cape Verde, Samoa, Tuvalu and Vanuatu. The change was made by the Governor General in Council on the recommendation of the Minister of Finance, and it comes into force on January 1, 2025; goods already in transit to Canada before that date are exempt.

What it does#

• Withdraws entitlement to the Least Developed Country Tariff for all goods that originate in Cape Verde, Samoa, Tuvalu and Vanuatu.
• Exempts goods that were already in transit to Canada before January 1, 2025 from the withdrawal.
• Amends the schedule to the Customs Tariff (the “List of Countries and Applicable Tariff Treatments”) by removing the LDCT marker for those four countries.
• Takes effect on January 1, 2025.

Who's affected#

• Importers and customs brokers who bring goods into Canada from Cape Verde, Samoa, Tuvalu and Vanuatu.
• Canadian businesses that source products from those countries, and the consumers who buy those products.
• The governments and exporters in the four countries named may also notice changes in trade with Canada.
• The order itself does not list the alternative tariff rates that will apply after the withdrawal; affected parties should check the Customs Tariff schedule or contact customs agents for the exact treatment after January 1, 2025.

Why it matters#

• Removing the LDCT benefit can raise import costs for affected goods. That can increase costs for businesses and, potentially, retail prices for consumers.
• Importers need to review shipment timing because goods already in transit before January 1, 2025 keep the old treatment.
• Businesses should update their customs paperwork, pricing and supply plans to reflect the change.