In Italy, granite is cut into a rectangular block or slab. This stone is then shipped to Canada where it is further cut, ground and polished to produce a granite countertop. The processing in Canada contributed over 60% of the transaction value of the finished product. Does the finished countertop qualify for preferential tariff treatment under the North American Free Trade Agreement (NAFTA)?
A. Yes, the countertop qualifies for NAFTA since over 60% of the value was added in a NAFTA country.
B. Yes, the countertop qualifies for NAFTA since it was cut and polished in a NAFTA country, and over 60% of the value was added in Canada.
C. The exporter’s NAFTA certificate of origin must be reviewed before a determination of NAFTA eligibility can be made.
D. No, the countertop does not qualify for NAFTA.
E. Yes, the countertop qualifies for NAFTA because there is a tariff shift from Chapter 25 to Chapter 68 in the NAFTA country.
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The Answer is: E
Citation: HTSUS Chapters 25 and 68 (tariff shift)
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