![]() ![]() This increase by three percentage points will mean that certain goods that did not qualify as originating under the NAFTA could qualify as originating under the USMCA. The de minimis threshold of 7% under the NAFTA has been raised to 10% in the USMCA. One key change is with respect to the de minimis rule, which provides that if the value of all the non-originating materials used in the production of a good that do not undergo the specified change in tariff classification is less than a specified percentage, the good nevertheless is deemed to be an originating good. Yes, in certain circumstances goods that were not originating under the NAFTA may be originating under the USMCA rules of origin. Should I conduct a rules of origin analysis for goods previously determined are not originating under the NAFTA and can you give examples of how changes to the rules of origin might change origination status? For example, significant changes have been made to the rules of origin applicable to the automotive and textile sectors. While broadly the USMCA rules of origin are similar to the NAFTA rules of origin, there are important differences that will impact whether or not a good is originating under the USMCA. Does it mean my goods will automatically qualify as originating under the USMCA?īusinesses cannot assume that goods that were originating under NAFTA will continue to originate under the USMCA. My goods qualify as originating under the NAFTA. Set forth below are some common questions and their answers, which are worthy of your immediate attention: This client alert focuses on the implications of the USMCA that relate to the importation of goods. The uniform regulations will provide further guidance as to how the USMCA rules of origin are to be applied. The uniform regulations, which will need to be adopted by the laws or regulations of each Party, will be a comprehensive and detailed set of rules that are agreed to by all parties. ![]() Furthermore, given the significant disruptions to businesses and their supply chains caused by the COVID-19 pandemic, immediate action is required by businesses to assess the impact of the implementation of the USMCA taking into account such supply chain changes.Īs of the date of publication of this client alert, the USMCA uniform regulations have not been published by the parties. While many of the principles and rules in the USMCA are similar to those found in the NAFTA, there are important differences that must be taken into account to ensure that the benefits of the USMCA can be maximized. Consequently, it is important that businesses take immediate steps to review and understand the implications of the implementation of the USMCA, and the termination of the NAFTA, effective 1 July 2020. Most provisions in the USMCA will take effect upon entry into force. The USMCA (for brevity we refer to the agreement only as the USMCA) will replace the North American Free Trade Agreement (NAFTA), a free trade agreement that has been in place among the Parties for more than 25 years. Pursuant to formal notifications issued by Mexico, Canada and the United States ("Parties"), the United States-Mexico-Canada Agreement, referred to as the USMCA in the United States, the CUSMA in Canada, and the T-MEC in Mexico, will enter into force on July 1, 2020. ![]()
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