What is a Free Trade
Agreement (FTA)?
An FTA is an agreement between
two or more countries designed to
facilitate trade by removing barriers
like tariffs and regulatory
disparities.
FTAs aim to:
Reduce landed costs (total cost
of moving goods from one place
to another)
•
Streamline trade processes
•
Safeguard intellectual property
•
Promote fair competition for
businesses
How do businesses
use FTAs?
To use an FTA, businesses
must first certify their
products to ensure that
customs agencies can
assess qualification for
preferential duty or duty
exemption.
Failure to effectively certify
goods and remain compliant
with the provisions of the
FTA can result in significant
penalties.
UP TO
The range of CBSA penalties per incorrect declaration
of origin documents in Canada.
$400,000
Free Trade
Agreements
Preparation and Optimization
The cost-saving potential of free trade agreements will become more
important with businesses across North America implementing
contingencies and redundancies in their supply chain.
Yet, many importers and exporters remain unprepared to handle the
administrative aspects of managing Free Trade Agreements (FTAs).
Three key factors
for
importers and exporters to
consider this quarter:
Complexities associated with
documentation and tracking supply
sources, including country of origin
Familiarity with special trade programs
and tools to lobby for supplier
partnerships
Ensuring timely regulatory
compliance to avoid costly fines
and delays
have used available FTAs to their advantage
*Reuters Survey-2022
~ 23% of businesses
1
2
3
Trade-management partners often help importers to:
Solicitation
Typically, businesses do not have time to verify whether suppliers meet relevant
Free Trade Agreement (FTA) origin requirements and standard requirements for
regulated goods.
When using FTAs such as the USMCA, CPTPP, and the CETA,
importers often:
• Overlook qualifying goods from suppliers
• Incur additional administrative costs associated with:
• Filing required documentation
• Following up with suppliers
• Addressing errors that occur
• Overburden internal resources
• Face hefty fines and charges due to non-compliance
Identify and validate materials used by suppliers
when producing goods for importation
1
Determine sources of material used
and verify with relevant FTAs
2
Collect and authenticate
Certificates of Origin
3
Advise on optimal
trade programs
4
•
Replay animation
50,000
100,000
150,000
200,000
250,000
300,000
350,000
375,000
$400,000
