Text of New NAFTA Agreement

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Text of New NAFTA Agreement

Agreed to by all 3 NAFTA countries!

Text of Agreement is released

Courtesy of Pisani & Roll LLP

Yesterday, Canada and the United States resolved their differences regarding Canada joining the recently completed US-Mexico Trade Agreement (aka “NAFTA 2.0”).  The USTR has now posted the text of the agreement (officially called the US-Mexico-Canada Agreement) to its website.

Importantly, regarding timing, NAFTA 2.0 must now be ratified and approved by each of the three NAFTA countries.  Once each country approves NAFTA 2.0, it will enter into effect on the 1st day of the third month following the last notification of approval (Article 34.5).  Thus, once all three countries approve and given notification of their approvals, the new agreement will take effect 3 months later.  The current NAFTA is anticipated to remain in effect until the new NAFTA is approved and implemented.

Among the many important NAFTA 2.0 changes to the customs operations of importers, exporters and producers are:

  • Updated/revised rules of origin (including many important changes to affecting the automotive industry – which are set forth in Appendix 4-B to Chapter Four of the new agreement)
  • Claims for NAFTA preferential treatment may now be made based upon certifications of origin issued by the exporter, producer OR the importer (see Articles 5.2 to 5.5).  Certifications of origin need not be on a prescribed customs form (such as the current CBP Form 434) but instead, per Article 5.2, may be in free form, provided they contain the minimum data elements set forth in Annex 5-A).
  • NAFTA verifications can be done by the customs authorities of one country visiting the producer or exporter located in another NAFTA country, but also by auditing the importer who made the claim (Article 5.10); short extensions of time to conduct the audit are also now explicitly permitted (Article 5.10, paragraphs 9 and 10).

The new NAFTA 2.0, like the prior NAFTA, allows for a one year time period to make a NAFTA claim if information sufficient to support the claim is not available at the time of entry (Article 5.12).  It also keeps the current 5 year record keeping rule (Article 5.9).

The new NAFTA continues to exempt originating goods from customs user fees (such as the Merchandise Processing Fee (“MPF”), Derecho de tramite aduanero (“DTA”).  Article 2.12.  It also maintains duty relief for repairs and alterations performed in North America.  Article 2.8.

The original NAFTA limitation on duty deferral and duty drawback (previous NAFTA Article 303) is incorporated in the new agreement in Article 2.5.

NAFTA 2.0 is set to self-terminate in 16 years unless each party indicates it wishes to renew the agreement (Article 34.7).

Categories: Customs Clearance

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