Transition from NAFTA to USMCA

In May 2020, the Office of the US Trade Representative stated enough compliance measures had been taken by participating countries to allow the United States-Mexico-Canada Agreement (USMCA) to go into effect July 1, 2020. This will effectively end the North American Free Trade Agreement (NAFTA) on June 30, 2020.

Importers who have not claimed NAFTA on shipments made between July 2019 and June 2020 are still allowed to file post-entry claims for refunds based on NAFTA until June 30, 2020. However, starting July 1, 2020, importers must be prepared to claim USMCA if they wish to avoid paying Merchandise Processing Fees (MPF) and other duties at the time of import entry. New USMCA rules of origin and certification requirements should be carefully reviewed. In some sectors, such as the automotive industry, the changes to these rules of origin are significant.

While the USMCA will no longer require a certificate of origin, a minimum set of data must be submitted to prove origin. These include:

• Importer, Exporter or Producer (indicate which is certifier)

• Name and Address of Certifier

• Name and Address of Exporter

• Name and Address of Producer

• Name and Address of Importer (if known)

• Description and Harmonized System Tariff Classification of the good to the 6-digit level

• Specific Criteria under which the good meets USMCA originating requirements

• Blanket Period (certification is valid up to 12 months in the case of multiple shipments of identical goods)

• Authorized Signature and Date

While it is unlikely specific implementation regulations will be published by July 1, 2020, CBP has issued interim implementation instructions with some details, though much remains to be done. While there are some changes, many analysts say over 80 percent of the Free Trade Agreement remains the same.

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