LexSage

Say Cheese:  European Cheeses Will
Soon Be Available Under Canada-EU
CETA

March 24, 2017

Currently, European cheeses are available in Canada.  When the Canada-European Union Comprehensive Economic and Trade Agreement ("Canada-EU CETA") is provisionally implemented, more European cheese may be imported into Canada. Current Canadian importers of cheese and new importers of cheese (e.g., restaurants, specialty cheese retailers and others) need to get ready.

The Canada-EU CETA contains 5 sets of rules of relevance to those interested in cheese:

1. The duty elimination and duty reduction rules:  Canada's schedule of commitments (Annex 2-A) on duty elimination and duty reduction exempts some types of cheeses.  The exempted cheese may still be imported into Canada.  However, the applicable rate of duty will be the MFN rate (rather than the CEUT rate).  There is no preferential rates of duty for the identified cheese.
2. Over a 5 year gradual increase period, Canada has agreed to grant more quota for cheese over and above the WTO commitments:

3. Canada has made commitments regarding the allocation of the new cheese quota.  In Annex 2-B, "Declaration of the Parties concerning tariff rate quota administration", Canada has agreed to allocate cheese quota using an import licensing system on an annual basis.  The EU cheese quota allocation method must allow for new entrants each year. During the phase-in period from Year 1 to Year 5, at least 30 per cent of the tariff rate quota will be available to new entrants every year. After the end of the phase-in period from Year 6 and in subsequent years, at least 10 percent of the tariff rate quota quantity will be available for new entrants. This allows for retailers and specialty cheese stores and restaurants to apply for EU cheese quota.  Canadian importers must apply for quota on an annual basis. To be eligible, an applicant shall be, at a minimum, a resident of Canada and be active in the Canadian cheese sector regularly during the year.

It is anticipated that Canada will continue to require importers of cheese who are allocated quota to be required to apply for an import permit on an import-by-import basis (as required currently).  The Government of Canada undertook consultations with Canadians on cheese quota allocation and has not yet communicated the results of those consultations.  The EU cheese quota rules will have to be implemented prior to the provisional implementation of the Canada-EU CETA.  The EU cheese quota may slow down the process.  Be ready to apply as soon as the new program is announced.  30% of the Year 1 quota goes to new applicants. Get in earlier rather than later.

4. The Canada-EU CETA contains rules of origin for cheese.  The cheese must originate in the EU (according to the Canada-EU CETA rules of origin) in order to qualify under the EU cheese quota.  Rules of origin are based on H.S. classification numbers.  One of the rules of origin for cheese is:

"A change from any other chapter, except from dairy preparations of subheading 1901.90 containing more than 10 per cent by dry weight of milk solids, provided that:
(a) all the material of Chapter 4 used is wholly obtained, and
(b) the net weight of non-originating sugar used in production does not exceed 20 per cent of the net weight of the product."

Check the specific rules of origin for the type of cheese you wish to import.

5. Canada's commitments of geographic indications restricts the use of certain names of cheese.  Canadian distributors, retailers, restaurants, etc cannot use the name of certain cheese names unless it is in respect of the genuine product. Canadian companies should exercise caution when using these cheese names on products and in advertising.

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com. Alternatively, visit www.lexsage.com. This article was originally published on www.Canada-USBlog.com. Republished with permission.