Supply Chain News / Risk & Compliance

U.S./Canada Strike Trade Deal

January 16, 2013
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Canadian and U.S. governments have announced a newer, harmonized customs ceiling for low value shipments. The higher ceiling aims to ensure that a higher volume of goods can move faster between the two countries to bolster the trade relationship.

Low value shipments between Canada and the U.S. qualify for expedited customs clearance. The new ceiling for Canada and the U.S. is $2,500. Canada raised its limit from $1,600 to $2,500 CAD while the U.S. has increased its threshold to $2,500 from $2,000 USD.

The change represents the Canadian government's successful implementation of a key item in the Beyond the Border Economic Action Plan, which aims to enhance trade through efficient movement of goods and regulation harmonization at the border.

UPS holds a unique perspective as one of the largest transporters of goods across the Canada-U.S. border.

"Canadian and U.S. businesses are the true beneficiaries of the Beyond the Border Action Plan and this change," said Mike Tierney, president, UPS Canada. "Each day, more than $1 billion worth of goods crosses our common border, bringing the annual value of traded goods to more than $580 billion. Yet, every year $16 billion in trade activity has been lost due to border delays. This change will allow for swifter movement of goods for importers and exporters of all sizes."

Since its original implementation, the program offering faster clearance for low value shipments has been successful in ensuring timely movement of shipments without compromising security. The program expedites release using the practice of reporting goods to the Canada Border Services Agency (CBSA), before goods arrive at the border, permitting Customs review/targeting and fostering a secure trade environment.

Low value shipments are specific to carriers authorized to use the provisions of the low value shipment processing system, such as UPS, allowing goods to be released for delivery on the day of arrival.

Canada's Minister for International Trade, Ed Fast, confirmed the government's commitment to continuing its timely implementation of the Beyond the Border Action Plan. "Items in the action plan focus on ensuring security at the Canada-U.S. border while improving processes to positively impact businesses, travelers, the economy and jobs. This low value shipment customs harmonization will enhance speed of goods to market, which is a critical component to a successful trade model."

The efficient and newly harmonized low value shipment process translates into significant benefits for Canadian importers, including:

  • Improved certainty for delivery of critical goods
  • Improved efficiencies for North American supply chain management
  • Better allocation of resources for CBSA toward higher risk priorities
  • Support of a trade-friendly environment which offers Canadian importers and exporters opportunities to grow trade activity with the U.S.
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