The FTA eliminates all tariffs, reduces many non tariff barriers, liberalizes investment requirements, and provides a new framework for trade in services between the US and Canada, over time.72 Canadian tariffs will be reduced to a much greater extent than will American tariffs, because Canadian tariffs were much higher at the beginning. The mean Canadian tariff on dutiable imports from the US was 9.9 percent prior to implementation of the FTA, while the mean American tariff on dutiable imports from Canada was only 3.3 percent.73 A comparison of preFTA tariffs is presented in Table 4, which may be found on the following page.
The customs territory included in the FTA does not include the American territoriesPuerto Rico, the Virgin Islands, and so forth.74 Thus, goods from these territories shipped to Canda through the US will continue to be subject to Canadian tariffs.
72Communication From the President, H. Doc. 100216.
PreFTA Canadian and US Tariffs Applicable to
Dutiable Imports from the Other Country
Aircraft 0.0% 0.2%
Alcoholic beverages 3.4% 31.3%
Aluminum 0.7% 2.8%
Animal and vegetable fats 5.6% 5.9%
Apparel 15.8% 20.2%
Arms and ammunition 4.7% 2.7%
Autos, trucks, and parts 0.1% 0.4%
Cement, plaster, and stone 3.3% 7.6%
Ceramics 2.1% 2.8%