When you’re exporting products across borders, there are many factors to manage, including shipping, market entry, tariffs and compliance. One factor that can be overlooked but plays an important role in your export success is Country of Origin (COO).  

Let’s examine what COO means and why it matters. 

What is Country of Origin (COO)? 

Country of Origin refers to the country where a product is grown, produced or manufactured. According to the World Trade Organization, a product’s origin is generally defined as the place where it was wholly sourced, or the country where the last substantial transformation of the product occurred. Regulatory authorities and trade bodies determine COO through rules and regulations called Rules of Origin.  

While this seems straightforward, it can get more complex when your product includes ingredients or parts from multiple sources. For example, if you’re manufacturing a product for export, the origin of the ingredients or parts and where the final product is processed, can have an impact on your product’s COO. When determining the COO, there are factors to consider, such as how much of a product comes from a specific jurisdiction, what processes it has undergone and what components are included.  

This is also where trade agreements come into play, as they can offer preferential rules of origin to goods for export. These rules can offer Canadian businesses an advantage because your products could benefit from reduced tariffs or no tariffs at all when exported into markets with trade agreements in place.  

Why COO matters in exports 

If you’re looking to take advantage of trade agreements, you must declare the COO correctly to receive preferential rules of origin. Many international agreements – Canada-United States-Mexico Agreement (CUSMA), Canada-European Union Comprehensive Economic and Trade Agreement (CETA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – allow for preferential access to Canadian goods, but only if they meet specific rules of origin. 

Preferential access can include lower or no tariffs applied on goods, simpler operational set up outside of Canada, reduced border delays and/or easier access to sell in other countries.

If you misidentify your product’s COO, you can miss out on tariff exemptions or run into issues such as penalties or loss of market access. 

Customs and documentation 

COO also plays a crucial role in documentation required by customs. You may have to submit a Certificate of Origin (the legal documents that declare the origin of a product) to prove your products qualify for duty-free or reduced rate entry under a trade agreement. Customs authorities use these certificates to determine what tariffs, if any, apply to your goods and what your customer may have to pay.  

Mistakes, such as mislabeling or failing to provide supporting documentation, can lead to shipping delays, fines or even rejection of products at the border.  

Consumer demand 

At the same time, COO can also be a valuable marketing tool. Many consumers associate certain countries with preferred quality standards.  

According to Agriculture and Agri-Food Canada, market research shows that Canada is seen as “a model country” and foreigners associate Canada with safe, high-quality products.  

Because of Canada’s excellent reputation as a preferred source for well-made, reliable goods, there is a significant opportunity to showcase your products as “Made in Canada” or “Product of Canada.”  

To maximize this, ensure you know target market’s perceptions about Canadian goods. Different countries value Canadian products for a variety of reasons. Learn the consumer preferences in your markets and customize messaging and branding accordingly. 

Learn more about branding with “Made in Canada” and “Product of Canada.” 

Things to note 

Managing COO can be complex, especially if your supply chain involves multiple countries. Here are a few things to do: 

  • Track all component or ingredient origins in supply chains. 
  • Label products correctly and verify all applicable rules.  
  • Keep proper documentation that supports your COO claims. 

The Government of Canada provides excellent resources on Canada’s trade agreements, tariffs, rules and regulations. 

What you should do 

Understanding COO doesn’t have to be hard if you take the right steps.  

  • Know the rules of origin for every market you export to and remember they vary by country and trade agreement.  
  • Keep good records of your supply chain, sourcing and manufacturing processes.  
  • Work with a trade expert, like your Export Advisor, who can guide you through the requirements and help ensure you’re fully compliant.  

Next steps 

Correctly identifying and managing COO can help you access new markets, reduce costs and build trust with international customers.  

Contact Export Navigator to talk to an Export Advisor about how Country of Origin affects your export plans and how to get it right from the start.