Canada: Canada–EFTA Free Trade Agreement Comes Into Force On Canada Day

Copyright 2009, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on International Trade & Investment, May 2009

Bill C-2, the domestic legislation required to implement the Canada–EFTA Free Trade Agreement (Agreement) passed its third and final reading in the Senate on April 28, 2009. This development means that the much-anticipated free trade agreement between Canada and the European Free Trade Association (EFTA), which is comprised of Switzerland, Liechtenstein, Iceland and Norway, will come into effect on July 1, 2009. The Agreement will open new markets for exporters in the territory of the various parties, and will also alleviate or remove some of the burdens faced by those who import goods from any of the EFTA countries.


The Agreement is comprised of a free trade agreement (FTA) as well as three separate agricultural agreements between Canada and Switzerland, Norway and Iceland. The FTA establishes a free trade area among the contracting parties, similar to other trade agreements to which Canada is a party, with the objective being to promote the harmonious development of economic relations between Canada and the EFTA through the expansion of reciprocal trade. It is also intended to provide fair conditions of competition affecting trade between Canada and the EFTA states, and to establish a framework for further co-operation between Canada and the EFTA states, in particular with the aim of liberalizing trade in services and increasing investment opportunities.


The Agreement can be described as a basic FTA because its focus is almost exclusively on the elimination of customs duties on goods traded between the EFTA countries and Canada. Although it is therefore a relatively modest agreement in terms of its scope, it is significant because it is the first trade agreement by Canada with European countries. In addition, it is important to note that, for the most part, duties on originating goods are eliminated immediately upon implementation, rather than a phased elimination as was the case under the North American Free Trade Agreement. This means that Canadian importers and exporters will benefit immediately once the Agreement enters into force. It is a significant achievement for Canada because the EFTA countries are important trading partners with Canada, accounting for C$13.2-billion of two-way merchandise trade in 2008, a figure which includes C$4.2-billion in Canadian exports. Moreover, a total of C$18.4-billion in foreign direct investment into Canada flowed from Norway and Switzerland in 2008.

In summary, the Agreement provides for:

  • the elimination of tariffs in all non-agricultural sectors (i.e., goods classified in Chapters 25 - 97 of the List of Tariff Provisions) including aluminum and cosmetics, prefabricated buildings, coldwater shrimp and apparel products
  • the elimination or reduction of tariffs on selected Canadian agricultural and agri-food products (i.e., goods classified in Chapters 1 - 24 of the List of Tariff Provisions) such as durum wheat, frozen french fries, beer and Canadian crude canola oil
  • duty-free access to Canadian and EFTA markets for most industrial goods, fish and other marine products.

The primary exception to provisions providing immediate duty-free access is in the case of ships, boats and floating structures imported into Canada. In the case of such goods, customs duties are to be eliminated after a transitional period of up to 15 years. The Agreement also provides specific rules dealing with processed agricultural products. For items in this grouping, such as cocoa and confectionary sugar, the tariff rate will be reduced from 6% to zero immediately upon entry into force of the Agreement.

The Agreement includes provisions on subsidies, antidumping, services and investment, competition laws, and state-trading enterprises, among others, that are consistent with rules of the World Trade Organization (WTO). The Agreement also contains provisions that implement certain WTO agreements, including measures that affect sanitary and phytosanitary measures. Rules of origin under the Agreement will be determined using an approach that reflects a hybrid between the Canadian rules and the EFTA rules.


Bill C-2 also amends certain aspects of the Customs Act, the Customs Tariff and the Canadian International Trade Tribunal Act (CITT Act). In particular, the amendments that Bill C-2 makes to the CITT Act expands the CITT's current jurisdiction over emergency action (safeguard measures) to recommend safeguard measures in appropriate circumstances against any of the EFTA countries. In particular, the CITT, either on its own initiative or pursuant to a complaint from a domestic producer, may inquire into and, if appropriate, recommend that safeguard measures such as temporary surtaxes or quotas be imposed where the reductions in tariffs lead to increased volumes of imports that result in serious injury or pose a threat of serious injury to domestic producers of like or competitive goods.


One unique aspect of the Agreement, as reflected in Bill C-2, is its procedures in respect of country of origin verification, implemented into domestic legislation by way of amendments to the Customs Act. Most of the trade agreements to which Canada is a party empower the President of the Canada Border Services Agency to conduct an origin verification on imported goods, thereby confirming that imported goods are in fact eligible for a particular tariff treatment. Bill C-2, however, excludes goods imported from the EFTA states from this verification process and instead sets out a method that involves having the customs administrations in the various EFTA states, following a written request from Canadian customs officials, conduct the verification and determine whether the goods are "originating" within the meaning of the Agreement.


In addition to the Canada–EFTA Free Trade Agreement, Canada has implemented five other FTAs including the Canada-U.S. FTA, the NAFTA, the Canada-Chile FTA, the Canada-Costa Rica FTA and the Canada-Israel FTA. Canada has also signed FTAs with Colombia and Peru, implementing legislation which is currently proceeding through the parliamentary approval process. Canada is exploring additional trade agreements with the European Union as well as several other countries.

The Canada–EFTA Free Trade Agreement and the other ongoing negotiations are part of the federal government's Global Commerce Strategy, an aggressive trade negotiations agenda aimed at securing competitive terms of access in markets that offer significant potential for Canadian products and expertise. Trade agreements such as this Agreement give Canadian exporters additional tools to expand into other markets around the world. The Agreement also gives Canadian importers additional opportunities to source goods and materials from EFTA countries at reduced cost.

With the growing number of bilateral trade agreements to which Canada is a party, companies operating in Canada should implement or review their supply chains in order to take advantage of the opportunities afforded by these various agreements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
13 Dec 2017, Seminar, Toronto, Canada

Class actions across Canada continue to grow in volume and complexity, triggering significant policy and financial implications for businesses in Canada. With the Law Commission of Ontario’s recent announcement that it is reactivating its comprehensive review of class actions in Ontario, we may see important law reform on the horizon to evolve with the changing landscape.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions