Canada - Country Commercial Guide
Trade Barriers

Includes the barriers (tariff and non-tariff) that U.S. companies face when exporting to this country.

Last published date: 2021-08-20

Technical regulations and standards specify a product’s characteristics (such as size, functions, and performance), how it is labeled or packaged, and testing and certification requirements before it can enter a country’s market. These measures should serve legitimate public policy goals, but the requirements can be problematic when they are overly restrictive or discriminatory and are used to inhibit trade. In cases where they are more trade-restrictive or more burdensome than necessary, they are technical barriers to trade. The World Trade Organization (WTO) Agreement on Technical Barriers to Trade (TBT) and the United States-Mexico-Canada Agreement set rules aimed at preventing and addressing such barriers.

Identifying and Reporting TBTs to the United States Government

The United States Department of Commerce’s Office of Trade Agreements Negotiations and Compliance (TANC) is a vital part of the United States government’s efforts to reduce unfair foreign government-imposed trade barriers, including TBTs.

Barriers (tariff and non-tariff) U.S. companies face when exporting may include:

· Particularly high tariffs for certain products;

· Restrictions on selling to the government of the country;

· Import licensing requirements;

· Anti-dumping and countervailing duty measures;

· Product bans;

· Any quarantine measures for agricultural products;

· Foreign governments that prohibit participation in the rule-making process;

· Rules that discriminate against U.S. products or are unnecessarily trade-restrictive; and

· Rules that are inconsistent with relevant international standards.

What should you do when you identify a TBT?

For assistance with non-tariff barriers related to trade agreement non-compliance, such as standards and technical regulations-related barriers (i.e., technical barriers to trade), contact the United States Department of Commerce’s Office of Trade Agreements Negotiations and Compliance (TANC) at tanc@trade.gov, (202) 482-1191, or report a trade barrier online. Other trade agreement non-compliance areas that TANC provides assistance includes import licensing, trade facilitation, customs valuation, rules of origin, anti-corruption, government procurement, investment, and sanitary and phytosanitary non-tariff trade barriers.

Provide the following information from your organization to help assess the barrier:

· A translated copy of the technical regulation.

· Identification of the problematic areas, and explanation of why they are problematic.

· Background on how the standards and procedures differ from those to which your organization complies.

· Information about how your organization may be negatively affected, including the dollar value if possible.

Possible options for resolution

Seeking voluntary compliance through relevant trade agreements, diplomatic resources, and advocacy from high-level officials is the preferred option to remove trade barriers in a commercially meaningful time frame. The action plan will be tailored to the case and country, and always in concert with the reporting company/industry.

Resolving TBTs at the WTO

The TBT Committee meets three times a year and USTR leads the United States delegation to engage trading partners to remove specific TBTs, by raising these barriers either bilaterally or on the floor in front of other WTO members. This process gives a chance for the United States’ trading partners to come into compliance.

Technical Barriers to Trade

Cheese Compositional Standards

Canada’s regulations on compositional standards for cheese limit the amount of dry milk protein concentrate (MPC) that can be used in cheese making, reducing the demand for U.S. dry MPCs. The United States continues to monitor the situation with these regulations for any changes that could have a further adverse impact on U.S. dairy product exports.

Front-of-Package Labeling on Prepackaged Foods

In 2020, the United States continued to monitor any progress regarding Canada’s proposed regulation to implement requirements for front-of-package (FOP) labeling on prepackaged foods deemed high in sodium, sugars, and saturated fat, and updating requirements for other FOP information, including certain claims and labeling of sweeteners. The approach under consideration uses Canada’s nutrient content claim framework to determine whether a food would be required to carry a FOP symbol, including a nutrient content message. The United States submitted comprehensive comments on the proposed regulations notified to the WTO in April 2018. Since then, the United States has regularly consulted with Canada regarding its plans to produce an updated draft or final regulation. In 2020, U.S. exports of processed foods to Canada were valued at approximately $12 billion.

Corded Window Coverings Regulation on May 1, 2019, Health Canada published the new Corded Window Coverings Regulation, which is intended to help eliminate the strangulation hazard and to help reduce the rate of fatal strangulations associated with all corded window coverings, by specifying requirements for construction, performance, and labelling of window coverings. The proposed regulation raises industry concerns, as it creates unique national requirements, no longer aligns with the American National Standards Institute (ANSI) accredited standard, and creates national differences for regularly traded products across the border. The proposed regulation was notified to the WTO on August 2017, and the United States has engaged bilaterally with Canada on the development of this regulation, including in 2020, with requests to delay implementation of the measure. The new corded window coverings regulation came into force on May 1, 2021. In October 2020, Canada announced that from May 1, 2021, to April 30, 2022, Health Canada intends to prioritize promoting awareness of and compliance with the Corded Window Covering Regulation, while also monitoring progress towards compliance. Then, beginning May 1, 2022, Health Canada intends to increase its compliance monitoring activities and take appropriate enforcement actions.

Proposed Integrated Management Approach to Plastic Products

In June 2019, Canada signaled its intent to reduce plastic waste by banning certain single-use plastics. Canada then announced in an October 2020 discussion paper, entitled A Proposed Integrated Management Approach to Plastic Products to Prevent Waste and Pollution, that its proposed ban will include plastic checkout bags, straws, stir sticks, six-pack rings, cutlery, and food ware made from hard-to-recycle plastics. Canada’s plan to manage plastics also proposes improvements to recover and recycle plastic and establish recycled content requirements in products and packaging. Canada also published a proposed Order on October 10, 2020 to add “plastic manufactured items” to Schedule 1 (“the Toxic Substances List”) of the Canadian Environmental Protection Act (CEPA). Such a designation would provide the Canadian Government with the regulatory authority to manage plastic production, importation, and use. The United States commented on the discussion paper and the proposed Order on December 9, 2020 and requested any implementing measures be notified to the WTO. The United States will continue to engage with Canada on these issues and will closely monitor their impact.

Sanitary and Phytosanitary Barriers

Restrictions on U.S. Seeds Exports

For many major field crops, Canada’s Seeds Act generally prohibits the sale or advertising for sale in Canada, or import into Canada, of any variety of seed that is not registered with Canada’s Food Inspection Agency (CFIA). Canada’s variety registration gives CFIA an oversight role in maintaining and improving quality standards for grains in Canada. The registration is designed to facilitate and support seed certification and the international trade of seed; verify claims made, which contributes to a fair and accurate representation of varieties in the marketplace; and to facilitate varietal identity, trait identity, and traceability in the marketplace to ensure standards are met. However, there are concerns that the variety registration system is slow and cumbersome, and disadvantages U.S. seed and grain exports to Canada. Under the Canada Grain Act, only grain of varieties produced from seed of varieties registered under the Seeds Act may receive a grade higher than the lowest grade allowable in each class. The USMCA includes a commitment to discuss issues related to seed regulatory systems. The United States will continue to discuss with Canada steps to modernize and streamline Canada’s variety registration system.