In 1989, the Canada – U.S. Free Trade Agreement went into effect, phasing out all tariffs and many non-tariff barriers to trade.

The benefits of free trade are clear: two-way trade in goods and services between the two countries totaled $440 billion in 2002, the largest bilateral exchange in the world. The benefits of this free-trade agreement were expanded in 1994 when the North American Free Trade Agreement (NAFTA) opened the Mexican market to Canada and the United States.

In 1996, Canada and the U.S. implemented a comprehensive Shared Border Accord to deepen cooperation on border management issues. Since the September 11th attacks on the United States, Canada and the U.S. have accelerated these efforts to protect the security and enhance the prosperity of their citizens. The two governments continue to share more threat information, upgrade their crisis response abilities, and ensure that the Canada – U.S. border remains secure with an efficient flow of trade.

Customs officials from both governments have turned their attention from compliance and speed to security and compliance. U.S. exporters must provide accurate documentation and information to provide for a smooth entry into Canada.

1. The following documents will help ensure for a smooth entry:
2. Bill of Lading/Manifest/Waybill indicating the shipment contents.
3. Canada Customs Invoice (CCI) provides critical customs information (see my earlier article on the CCI) or your company’s invoice with the required information included.

NAFTA Certificate of Origin is required for proof of eligibility for preferential tariff treatment. Here is an example of a typical shipment. The truck driver picks up your shipment and takes the document package to the border (customs broker) or faxes them to the border prior to arrival. The data is reviewed and the release request prepared by the broker is sent to Canadian Customs.

Customs makes a decision to release the cargo or inspect the shipment. Duty is assessed and reported on a “B3” Customs Entry form. Canada Customs determines the duty based on the commodities’ country or countries of origin and the value of the shipment. A goods and services tax of seven percent, which is Canada’s federal sales tax, is applied to almost all commercial transactions.

To expedite the release of cargo at the Canadian border, U.S. exporters can provide the shipment information electronically to the broker prior to shipment. The information is reviewed and the release request is prepared and electronically sent to Canadian Customs. Customs makes a pre-arrival decision to release or inspect the shipment. When the truck driver arrives at the border, the driver receives a message to cross the border or stop for inspection.

The Canadian border’s impact on U.S. exporters is significant. It affects your ability to operate effectively in Canada, your relationships with your Canadian clients, the speed and reliability of your supply chain, and your costs. By providing the proper documentation and information, you will help eliminate unnecessary delays.