CETA Tariff Withdrawal for United Kingdom

Summary#

The Canada – European Union Tariff Withdrawal Order (United Kingdom) (SOR/2020-286) removes preferential tariff treatment under the Comprehensive Economic and Trade Agreement (CETA) for goods that originate in the United Kingdom. The change came into force on January 1, 2021, with an exemption for goods that were already in transit to Canada on that date.

What it does#

• Withdraws entitlement to the Canada–EU tariff preference (CETA) for all goods that originate in the United Kingdom.
• Defines "United Kingdom" for this order to include the Channel Islands, Gibraltar and the Isle of Man, but explicitly excludes a list of other British territories (for example, Bermuda, Cayman Islands, British Virgin Islands, Falkland Islands and others).
• Exempts goods that were already in transit to Canada on or before January 1, 2021; those goods can still get the CETA preference.
• Amends the schedule to the Customs Tariff by removing the CETA tariff treatment code (listed as “CEUT”) next to Channel Islands, Gibraltar, Isle of Man and United Kingdom so they no longer appear as CETA beneficiaries.

Who's affected#

• Importers and businesses that bring goods from the United Kingdom, the Channel Islands, Gibraltar or the Isle of Man into Canada.
• Small businesses that relied on CETA tariff cuts for UK-origin products may see higher costs.
• It is unclear from the order whether particular industries will be hit harder; the real impact depends on which products individual importers bring in and their current tariff rates.

Why it matters#

• The change reflects the United Kingdom leaving the EU customs union (Brexit). As a result, UK-origin goods no longer qualify for the tariff cuts Canada gives to EU member states under CETA.
• Practically, some imports from the UK may become more expensive because they lose preferential (lower) tariff rates. That can affect consumer prices, business costs, and supply chains that relied on the tariff break.
• The transit exemption means shipments already on their way by January 1, 2021 were spared the change.