Updates and Revisions to NAFTA in 2020 — What You Need to Know about USMCA
One of the latest developments in international trade is the implementation of the United States-Mexico-Canada Free Trade Agreement (USMCA), which will reshape trade in North America. USMCA will be effective on July 1st of this year. The new USMCA will affect rules of origin for certain industries, including automotive; disciplines on currency manipulation; food and agriculture trade; protections for intellectual property; digital trade; and regulatory practices. According to the Office of the United States Trade Representative, USMCA will “create more balanced, reciprocal trade that supports high-paying jobs for Americans and grows the North American economy.”
Hopefully, the USMCA will bring benefits across various industries, but what will this mean for you and how are Charter’s expert Customs Brokers addressing these changes?
Though the North American Free Trade Agreement (NAFTA) currently remains in effect while third-party administrator procedures are being completed, importers will not be able to use NAFTA preference after June 30, 2020. Our compliance specialists are committed to giving our clients the most up-to-date information, and though the full USMCA regulations and general notes are pending publication, there are a few things that you should be aware of now.
Certificates of Origin
A certificate of origin (COO) indicates the country in which the goods being exported were manufactured. Under the USMCA, COOs can be issued for qualifying merchandise entering U.S. commerce on or after July 1, 2020. It’s important to know that COOs issued under NAFTA will no longer be accepted after June 30, 2020 and a new certificate will need to be issued.
While there is no standard format and an electronic signature is allowed, there are some required elements for the certification. Prior to these new changes, the exporter was obligated to issue a NAFTA COO, however now, USMCA regulationsallow for the certificate to be executed by the importer, exporter, or the producer. The certifying document must be in the importer’s possession prior to claiming the preference.
Though new certificates are one of the requirements for exports to be compliant under the new USMCA, these can be created based on the underlying information provided under NAFTA if the Rules of Origin did not change, the importer feels confident that the product still qualifies, and the supplier confirms that the covered period is accurate.
Our duty drawback specialists are here to work with you to make sure your drawback claims can qualify under USMCA. The duty drawback process under NAFTA remains relatively unchanged in USMCA. However, records for duty drawback claimsmust be maintained for no less than five years to remain valid. Importers and exporters should ensure that their Certificates of Origin are updated, since they are among the records needed to support the drawback claim.
Licensed Customs Brokers for USMCA Compliance
As new regulations under USMCA become available, Charter Brokerage will continue to keep our clients updated with the most pertinent information. Our team of international trade attorneys, licensed Customs Brokers, and expert staff will make sure you understand your customs and export obligations and are able to adapt and implement the newest policies to ensure compliance, maximize duty refunds, and provide you with the best trade experience possible.
To learn more, contact us at: email@example.com