23 March 2000

23 March 2000

Request for Removal of Customs Duties on Rheological Additives

The Department of Finance is reviewing a request for removal of the customs duty on rheological additives for use in the manufacture of coatings and sealants.

The rheological additives are primarily organic derivatives of castor oil. They consist of a finely divided white powder that is incorporated during the dispersion process in the manufacture of coatings and sealants. It is noted that tariff item No. 1516.16.20.10 of the Customs Tariff currently provides for the duty- free entry of hydrogenated castor oil for use in the manufacture of sealants. The applicant is in effect requesting that this be broadened to cover such products used in the manufacture of coatings.

We understand that the subject rheological additives are otherwise classified under the following tariff item Nos. of the Customs Tariff and are currently subject to the corresponding rates of duty under the MFN tariff:

1516.20.90 11 per cent
3404.90.90 6.5 per cent
3824.90.90 8.5 per cent

The request for tariff relief in made on the grounds that the rheological additives are not available from Canadian production and that tariff relief of this nature would assist the Canadian producers in competing more effectively with coatings and sealants manufactured and exported from the United States.

Members with an interest in this matter should contact Ms. Sylvie Larose of the International Trade Policy Division, at 613-996-5887, or by fax at 613-992-6761, or via e-mail at [email protected], by 28 April 2000.