Following the free trade agreement CETA taking effect as of the 21st September, Canada will no longer tax chocolate confectionery that is imported from the EU, which is expected to see exports significantly rise.
The EU-Canada Comprehensive Economic and Trade Agreement (CETA) formally took place on the 21st September, which – amongst other things – got rid of custom duties on chocolate confectionery which had been imported from the EU to Canada, which had been up to 10% at one stage.
According to the European Commission, EU chocolate confectionery exports to Canada are worth a staggering €170.6m ($200.5m) each year, which in turn makes Canada the sixth top export destination across the globe for EU chocolate.
Currently – and in no particular order – Belgium, the UK, France, Poland and Germany are the top exporters of EU chocolate to Canada.
Zero custom duties only apply when a product specifically meets CETA’s rules on origin, which means that there will be some chocolate products – that contain more than a certain percentage of non-EU produced sugar – are excluded from this, and will be taxed appropriately.
With CETA rules in force, Canada can choose to measure the level of non-EU sugar by weight if they so please, with a 40% maximum, or by overall value, which will have a 30% maximum.
The CAOBISCO – Association of Chocolate, Biscuits and Confectionery – have been pushing for an EU-Canada free trade agreement since 2012, in order to base the percentage of non-EU sugar on value as opposed to weight, meaning that confectionery products have a fair bit of flexibility to use non-EU sugar, while retaining preferential status.
Previous EU trade agreements have generally calculated non-EU sugar based on weight, with a 40% maximum. However, recent deals – namely with Singapore and Vietnam – have seen a switch to weight based rules instead.
