2. International Trade Agreements
▪ General Agreement on Tariffs and Trade ruled international Textile trade since 1948
▪ The Multi-Fiber Arrangement (MFA) governed international trade in textiles and clothing since
1974
▪ The WTO’s Agreement on Textiles and Clothing (ATC) to abolish MFA quotas marked a
significant turnaround in 2005
▪ The ATC provided for a stage-wise integration process within period of 10 years (1995-2004)
▪ Integration process divided into four stages starting with the implementation in 1995 as:
Each country was required to integrate :
(Stage i) 16 percent of the total volume of imports of 1990
(Stage ii) 17 percent at the end of first three year
(Stage iii) 18 percent at the end of third stage
(Stage iv) final integration of the remaining 49 percent of trade
3. Canadian Textile Industry
The Canadian apparel industry plays a key role in the Canadian economy
In 1994, the apparel industry contributed 2.2% of Canada's GDP
Accounted for 5.7% of total manufacturing employment
It is made up of some 2000 firms, mostly owned by Canadians
Most foreign-owned firms, are the US-based MNCs
Total employment in the industry is estimated at more than 1,00,000 people
The supporting textile mills and retail stores that employ over 2,00,000 people
Canadian Textile and Apparel imports:
• FTA with US in 1989 and 1992, caused high rise in imported textiles and apparels
• In 2004, 62% of Canadian textiles and apparels were imported
• In 2004, China, became highest exporter to Canada, with 15% share of total Canadian textile imports
• India accounted for 4% of Canada's total textile imports in 2004, double the proportion in 1992
• Other major textile exporters to Canada are UK, EU, Bangladesh and Mexico
4. HS Codes
HS Code Categories Chaptercontents
Chapter 50 (5001 to 5007) SILK, Raw and Spun, and Fabrics
Chapter 51 (5101 to 5113) WOOL, Animal hair, and Woven Fabrics
Chapter 52 (5201 to 5212) Cotton, fiber, yarn, and all types of fabric
Chapter 53 (5301 to 5311) Other vegetable fibers; paper yarn and woven fabrics
Chapter 54 (5401 to 5408) Man-made Filaments
Chapter 55 (5501 to 5516) Man-made staple fibers
Chapter 56 (5601 to 5609) Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables
Chapter 57 (5701 to 5705) Carpets and other textile floor coverings
Chapter 58 (5801 to 5811) Special woven fabrics; lace; tapestries; trimmings; embroidery
Chapter 59 (5901 to 5911) Impregnated, coated, covered or laminated textile fabrics; industrial use textiles
Chapter 60 (6001 to 6006) Knitted or crocheted fabrics
Chapter 61 (6101 to 6117) Articles of apparel and clothing accessories, knitted or crocheted
Chapter 62 (6201 to 6217) Articles of apparel and clothing accessories not knitted or crocheted
Chapter 63 (6301 to 6310) Other made up textile articles; sets; worn clothing and worn textile articles; rags
9. Indian Textile Export To Canada- Trends
▪ Export of textile items is be covered by bilateral agreements
▪ Currently, 79% of apparel in Canada is imported
▪ The demand is stable; manufacturing is decreasing while imports are increasing
▪ India is fourth largest textile and clothing supplier to Canada, ahead of Mexico, Bangladesh and
Turkey
▪ Of the total RMG exports from India, 3.8% goes to Canada
▪ India's major exports to Canada include readymade garments, textiles, cotton yarn, carpets and
floor spreads
▪ Problems related to exporting textiles to Canada:
– Strict labor safety and working environment laws
– High quality standards, hard to fulfill
– Time limits and restrictions
– Excessive documentation process
– High risk business, vulnerable to changes (economic, social and cultural)
– Risk of damaged or lost goods in transit
14. Canada Trade Policies
Canada’s Global Commerce Strategy
GCS looks at five areas:
• Access to key markets
• Access to trade promotion and partnership development support
• Access to capital
• Access to technology
• Access to talent
15. Canada Trade Policies
Comprehensive Economic Partnership Agreement
•The Indo-Canadian joint study for feasibility and benefits of CEPA started in November,
2009
•The study covered all bilateral trades in goods and services
•In November 2010, Canadian Prime Minister opened negotiations on importance of
cooperation in creating ambitious Free Trade Agreement
•Eighth round of negotiations on creating FTA concluded on June 2013
•The negotiations, including market access for goods, rules of origin, trade facilitation,
origin procedures, technical barriers to trade, sanitary and phytosanitary measures,
institutional provisions, and trade in services, including temporary entry for business
persons, telecommunications, and financial services
16. Canada Trade Policies
Foreign Investment Promotion and Protection Agreement
•A FIPA is an international treaty providing binding obligations on host governments
regarding their treatment of foreign investors and investments
•FIPA provides a stable legal framework to promote and protect foreign investment
•It sets out a range of obligations that host governments guarantee pertaining to non-
discriminatory treatment, expropriation, transfer of funds, transparency, due process and
dispute settlement
•Canada and India agreed to begin negotiations towards a FIPA in June 2013
17. Documentations for trade with Canada
Commercial documents Auxiliary documents Regulatory document Otherdocument
Commercial invoice Performa invoice Shipping bill Black list certificate
Inspection certificate Intimation for inspection Export application Freight payment
certificate
Marine insurance policy Declaration of insurance Vehicle ticket/gate pass Insurance premium
certificate
Certificate of origin Shipping instructions Bank certificate of
realization
Legal invoice
Bill of lading Bank letter for negotiation
of documents
Airway bill
Shipment advice to
importer
Packing list
Bill of exchange
