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Notices

Textiles and Clothing

Administration Of The North American Free Trade Agreement Relating To Exports Of Textiles, Apparel And Made-Up Goods To The United States And The Application Of The Tariff Preference Levels

Tpl Allocation, New Entrants And Amendments To The Transfer Mechanism

Notice to Exporters
Export and Import Permits Act

Serial No. 123
Date: December 10, 1999

Table of Contents


Part I: General

1.0 Purpose

1.1 This Notice advises exporters of:

(1.1.1) TPL allocation policies for wool and non-wool apparel, cotton or man made fibre fabric and made-up goods, and cotton or man-made fibre spun yarn;

(1.1.2) wool and non-wool apparel TPL pools for new entrants; and

(1.1.3) amendments to the percentages of apparel TPL allocation that can be transferred out to other quota holders (see earlier Notices to Exporters 111 and 115).

1.2 This Notice to Exporters replaces Notice to Exporters No. 96, dated December 20, 1996 and Notice to Exporters No. 104, dated December 10, 1997.

2.0 Definitions

2.1 The Glossary included with this Notice explains the meanings of some words used in this Notice.

3.0 Duration

3.1 This Notice shall remain valid until further notice.

4.0 Authority

4.1 Tariff Preference Level or "TPL" means the special provisions set out in Annex 300-B, Appendix 6, Part B, of the NAFTA, that provides for the application of a customs duty at a preferential rate to non-originating goods up to a specified quantity, as adjusted under the Agreement, measured in square metre equivalents, and at a rate different from goods that exceed that quantity. The Minister of Foreign Affairs issues Certificates of Eligibility for TPL in accordance with the Issuance of Certificates Regulations which are, in turn, made under authority of the Export and Import Permits Act. The Minister allocates TPL quantities or "quota" to qualified applicants in accordance with policy expressed in the present Notice and Notices to Exporters Nos. 111 and 115.

4.2 Readers of the present Notice and other indications of policy referred to herein should know that Certificates of Eligibility for TPL are issued at the discretion of the Minister responsible for the EIPA; nothing in this or other Notices or other communications can be taken to guarantee the issuance of a Certificate. However, it is the Minister's intent normally to recognize TPL allocations in dispositions of applications for Certificates of Eligibility for TPL. Thus, the present Notice and other indications of policy referred to herein are presented as a guide to interested parties.

Part II: TPL Allocation

5.0 Wool Apparel

5.1 Wool apparel TPL allocation will continue to be made available to current quota holders on an historical basis to the extent of utilization. Depending on the overall level of utilization, up to one percent of each quota holder's wool apparel TPL allocation will be withheld to allow for the creation of a small TPL pool for new entrants.

5.2 For a subsequent year, an allocation to a TPL quota holder will be based on the holder's export performance for the entire current year and will depend on export shipments relative to the quota holder's available TPL allocation. This will be a percentage of the quota holder's original TPL allocation, adjusted for transfers out and returns (see paragraphs 6.2 and 6.3 in Notice to Exporters No. 111).

6.0 Non-wool Apparel

6.1 Non-wool apparel TPL allocation will be made available to current quota holders on an historical basis to the extent of utilization. Depending on the overall level of utilization, up to two percent of each quota holder's non-wool apparel TPL allocation will be withheld to allow for the creation of a small TPL pool for new entrants.

6.2 For a subsequent year, an allocation to a TPL quota holder will be based on the holder's export performance for the entire current year and will depend on export shipments relative to the quota holder's available TPL allocation. This will be a percentage of the quota holder's original TPL allocation, adjusted for transfers out and returns (see paragraphs 6.2 and 6.3 in Notice to Exporters No. 111).

7.0 Cotton or Man-made Fibre Fabric and Made-up Goods

7.1 Quota for cotton or man-made fibre fabrics and made-up goods will continue to be made available to all exporters on an historical basis to the extent of utilization. Any balance will be allocated on a first-come, first-served basis.

8.0 Cotton or Man-made Fibre Spun Yarn

8.1 Quota for cotton or man-made fibre spun yarn will be allocated to all exporters on a first-come, first-served basis, subject to availability.

Part III: Wool and Non-Wool Apparel TPL for New Entrants

9.0 Implementation

9.1 For the first five years the NAFTA provided growth rates for textile and apparel TPL levels. These growth rates will no longer be available after 1999. As such, TPL levels starting in the year 2000 will be in accordance with the Special Provisions in the NAFTA, Annex 300-B, Appendix 6:

Wool Apparel5,325,413 SME
- Wool suits5,016,780 SME
Non-wool Apparel88,326,463 SME
- From imported fabric63,060,603 SME
Cotton or Man-made Fibre Fabric and Made-up Goods71,765,252 SME
- Woven Fabric38,642,829 SME
- Knitted Fabric38,642,829 SME
Cotton or Man-made Fibre Spun Yarn11,813,664 Kilograms

9.2 To allow for a continuing capacity for new entrants, TPL pools for new entrants for exports to the United States of qualifying goods will be set at 1% and 2% of the respective wool and non-wool apparel TPL levels, in line with the previous growth rates provided for in the NAFTA. Beginning in the year 2000, the quantity of TPL for these pools will be 53,254 SME for wool apparel, and 1,766,529 SME for non-wool apparel.

9.3 Wool and non-wool TPL pools for new entrants may be allocated to: (a) new entrants that had no TPL allocation from these pools in the previous year, and (b) quota holders that had received access to and fully utilized the previous year's TPL, but had not reached a level in excess of 1,000 SME of wool apparel TPL, or a level in excess of 5,000 SME of non-wool apparel TPL.

9.4 Subject to the provisions of paragraph 9.3, an exporter is a "new entrant" if the exporter manufactures wool or non-wool apparel goods in Canada and is not affiliated with and is not a associated with a person who is a current apparel TPL quota holder (see the attached Glossary for related definitions).

9.5 New entrants, including existing holders of wool apparel TPL allocation not exceeding 1,000 SME, and non-wool apparel TPL allocation not exceeding 5,000 SME, must make a written request to the EICB by May 31 of each year to apply for the relevant TPL pool and provide a projection of requirements for the following year. New entrants may be considered for TPL allocation based on the availability of quota. TPL allocations for new entrants would normally be limited to 1,000 SME for wool apparel goods and 5,000 SME for non-wool apparel goods.

Part IV: Amendments to the Percentage of Apparel TPL Transfers

10.0 Restrictions to the Percentage of Apparel TPL Transfers

10.1 The percentage amount in Paragraph 5.2 in the Notice to Exporters No. 111 has been amended. Companies will be allowed to transfer out, without penalty, at any time during the year, up to 25% (formerly 50%) of their original TPL allocation.

10.2 The percentage amount in Paragraph 5.5 of the Notice to Exporters No.111 has also been amended. The combined amount of transfers out and returns (see paragraph 5.4 of that Notice) of TPL allocation by a company cannot exceed 25% (formerly 50%) of its original TPL allocation, except for companies that elect to transfer out up to 100% of their TPL allocation in accordance with paragraph 5.3 of the Notice to Exporters No.111.

10.3 For a company that holds both non-wool apparel (fabric) and non-wool apparel (yarn) TPL allocations (see paragraph 5.3 of Notice to Exporters No. 115), the transfer mechanism will consider them as separate quota holders for the purpose of TPL transfer policies. A quota holder wishing to transfer quota between non-wool apparel (fabric) and non-wool apparel (yarn) TPL allocations will be subject to the same transfer conditions described in both Notices to Exporters Nos.111 and 115.

Part V: Further Information

11.0 Certificate Cancellations

11.1 As indicated in Notice to Exporters No. 70, dated December 15, 1993, in cases where Certificates of Eligibility are subsequently not used (because of cancelled orders, or for any other reason), exporters must promptly return the pink copy of the Certificate of Eligibility to the EICB.

12.0 List of Quota Holders

12.1 A list of current quota holders and related Notices to Exporters can be found under the EICB web site:

English Textiles List - English

French Textiles Liste - Français

13.0 Inquiries

13.1 Inquiries concerning this Notice, or other administrative policies relating to NAFTA, may be addressed to:

Textiles and Clothing Section
Trade Controls Policy Division
Export and Import Controls Bureau
Department of Foreign Affairs and International Trade

Mailing address:

P.O. Box 481
Station A
Ottawa, Ontario
K1N 9K6

Courier address:

Tower C, 4th floor
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario
K1A 0G2

Telephone: (613) 996-3711
Facsimile: (613) 995-5137