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From NAFTA to USMCA/CUSMA - What Now? – Frequently Asked Questions [PART ONE]

The United States-Canada-Mexico Agreement (USMCA/CUSMA) was signed on November 30th, 2018, and will eventually replace NAFTA. There are many things that USMCA/CUSMA will change, from country of origin rules, labour provisions, to digital trade.

In our recent webinar, From NAFTA to USMCA/CUSMA – What Now?, our attendees had numerous questions regarding different aspects of this new trade deal. In this two-part series, we will look at the frequently asked questions during our webinar that were addressed by our panelists. You can find part two here

1. What does USMCA mean for me now, in 2019? Does anything change for me right now? 
A: NAFTA is still in place. Nothing changes regarding the way things are being done today. When USMCA gets closer to coming into force, NAFTA will be transitioned out.

2. What do I have to do now to prepare for the USMCA in 2020?
A: Pre-qualify your goods under the USMCA rules of origin so that you are better prepared to claim goods under USMCA when it is brought into force.

3. Will I still have to pay a countermeasure surtax if my goods are qualified under the new USMCA agreement? How about if the goods do not qualify for USMCA?
A: The countermeasures will remain in place for now. No set resolution is discussed in the current USMCA agreement, but the matter will be addressed separately.

4. Will the countermeasure surtax be in place until the agreement takes effect in 2020?
A: There is currently no set resolution in place, nor has any word been provided regarding a resolution to the countermeasures. The USMCA agreement does not discuss countermeasures.

5. Will I have to requalify all of my goods that are already qualified under NAFTA?
A: Yes, as the rules of origin and qualification requirements may have changed under the new agreement, especially regarding automobiles. As well, the certification format of goods has been slightly modified.

6. Do I still need to keep my previous NAFTA certificates from prior years?
A: Yes – The obligation to maintain proper records for the prior 6 years is still in place. NAFTA certificates must be retained for any goods that have claimed a NAFTA preferential treatment within the last 6 years.

7. If there is no prescribed certificate, but certification is required, will the CBSA release an official certificate form to help guide importers?
A: The CBSA has not announced that they will be providing a certification form. Farrow has developed a certification of origin form for importers to use. You can find the USMCA form here, and the CUSMA form here.

8. In the certification of origin statement, does the statement need to include the preference criterion used?
A: Yes, it is a requirement of the Agreement that the certification of origin includes the Origin Criteria used.

9. In 2020 Will we need to change the titles of all of our NAFTA documents to be titled USMCA?
A: Unfortunately, it is not as simple as that. You will need to requalify all goods under the new Agreement. As well, the format of the certification has changed, and the NAFTA certificate format will not be allowed under the USMCA.

10. When do we expect the 25% aluminum tariff and alternate 10% product tariffs to be addressed by the US & Canada?
A: There is currently no set resolution in place, nor has any word been provided regarding a resolution to the countermeasures. The text of the USMCA agreement does not discuss countermeasures.  There are side letters within the Agreement discussing Section 232 Tariffs, but they do not discuss a timeline for eliminating the surtaxes. The side letters are located here

11. Will you provide a link to the new Rules of Origin for pre-qualification to review?
A: The new Specific Rules of Origin can be found within Article 4 of the Agreement

12. Is there a transition date between NAFTA and the USMCA, or does the USMCA allow for a transition period during which both NAFTA certificates and USMCA certificates will be considered valid?
A: When the USMCA gets closer to coming into force, NAFTA will be transitioned out. However, nothing has been stated regarding the transition timeline. The old NAFTA form will be invalid for USMCA purposes. It will still be retroactively valid for historic NAFTA claims and records.

13. In regards to dangerous goods (specifically 5.1 oxidizers and class 8 chemicals), how will the USMCA transition impact the exporting, importing, and documentation of said chemicals?
A: USMCA Article 12 – Sectoral Annexes – was created to regulate chemicals and mixtures. The countries shall endeavour to use a risk-based approach when assessing chemical substances. As of now, the processes regarding the exporting, importing, and documentation of chemicals will stay the same.

14. We ship different types of media formats (VHS, etc.) that provide a service and are not sold or resold. Even though these are not sold, should we still send a Certification of origin? 

A: If you would like for a good to be subject to the preferential treatment of the USMCA, a certification of origin must be created.

15. Do we still have to use the Certificate of Origin for Produce?
A: Yes, as of now under NAFTA. Under USMCA, the procedure will be to have a Certification of Origin (in no set format). The Certification of Origin can be shown on the commercial invoice or Canada Customs Invoice.

16. What is the difference between the origin criteria and preference criteria?
A: Preference criteria was how NAFTA referred to it, and origin criteria is how USMCA refers to it. The concept behind both is the same – however, they are different in that USMCA only goes from A to D, and that D has been modified.

17. You mentioned that the Canadian government has implemented some measures to combat the aluminum tariffs repercussions. Where can I find these?

A: The countermeasures are located here. The remission order is located here

18. If we want specific information on where the agreement has changed significantly, to whom should we direct our inquiries?
A. Please direct all inquiries to compliance.consulting@farrow.com

19. Once the USMCA is in force, will the old NAFTA form be invalid?
A: The old NAFTA form will be invalid for USMCA purposes. It will still be retroactively valid for historic NAFTA claims and records.

20. Is there a hard start date to USMCA? Transition Period?
A: When USMCA gets closer to coming into force, NAFTA will be transitioned out, however, nothing has been stated regarding the transition timeline, as of yet.

21. Will they be updating tariff codes under the new agreement?
A: When the new agreement comes into force, the CBSA will release a new Customs Tariff, which will have the new tariff treatment codes and duty rates for the USMCA.

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