U.S. – Mexico – Canada(USMCA) Overview
USMCA (aka the New NAFTA) Commenced on July 1, 2020
The US-Mexico-Canada Agreement took effect on July 1, 2020 and fully replaced the North American Free Trade Agreement. US Customs & Border Protection (CBP) has posted Interim Implementation Instructions to their website while the industry awaits the final update to the Code of Regulations. Click to view the document
The USMCA is reflective of some minor changes to certain rudimentary elements such as the Certificate of Origin and the namesake itself (referred to as CUSMA in Canada), while other changes to certain rules of origin require importers to re-certify products under the new agreement.
Our FAQ document can be found Here.
Some noteworthy highlights:
- Customs form CBP434 expired on June 30th, 2020, and a new Certificate of Origin will be required in its place for any eligible product. Click for the Metro Customs Brokers’ template: Certificate of Origin
- Major Rules of Origin changes affect the automotive, dairy, agriculture and chemical industries.
- New requirements for textile apparel goods
- De minimis increases from 7% to 10%
- Requirement for component parts to be originating in a phased in schedule:
- Sewing thread – July 1, 2021
- Pocketing fabric – January 1, 2022
- TPL levels for cotton or manmade fiber apparel are significantly decreased by half of the current NAFTA limits. However, Merchandise Processing Fee is now fully eliminated for TPL eligible articles.
- Establishes a Tariff Rate Quota for certain autos and auto parts from Canada and Mexico, thereby excluding them from Section 232 Trade Remedy tariffs.
- Post Importation claims are still permitted to recover duties paid for otherwise eligible articles. However, MPF on these articles is non-refundable.
Metro Customs Brokers will be reaching out to our Blanket NAFTA holders to acquire new USMCA Certificates and review product eligibility.
For additional information, please contact our Technical Department.