A new Canada-United States-Mexico Agreement

Canada, the United States and Mexico signed a new North American trade agreement to replace NAFTA on November 30, 2018. The CUSMA (or USMCA in the U.S.) came into force in Canada in July 2020. This new agreement goes by a different name in each of the three countries that signed it. While known as CUSMA in Canada, it is called the United States-Mexico-Canada Agreement, or USMCA, south of the border. In Mexico, people call it T-MEC, reflecting the Spanish name of the treaty.

Many think of CUSMA as NAFTA 2.0—and with good reason. CUSMA and NAFTA are very similar agreements in terms of general concepts. CUSMA continues the work of NAFTA and was negotiated using NAFTA as a baseline. That said, the two agreements do differ in significant ways. It is not for nothing that CUSMA runs to 1500 pages—more than double NAFTA’s page count of 741.

Since July 1, 2020, NAFTA has been replaced by a new free trade agreement CUSMA. As an importer, exporter and manufacturer, for your shipments which will be customs cleared on or after July 1, 2020, you are no longer be able to claim the NAFTA preferential treatment in Canada, the United States or Mexico. From this date on, for products “originating” in North America, you will have to claim a preferential treatment under the new CUSMA treaty.

AS OF JULY 1, customs authorities (e.g. CBSA and U.S. CBP) will not accept a NAFTA Certificate of Origin to claim the CUSMA “duty-free” treatment. For your 2020 blanket certificates of origin, prepared according to NAFTA, these will apply up to June 30, 2020, only. Effective July 1, the product must be certified as an “originating” good per a CUSMA Certification of Origin.

Unlike NAFTA, the new agreement does not call for a prescribed form. Instead, CUSMA requires a Certification of Origin, which can be included on a commercial invoice or a separate document, insofar as this new Certification contains all the mandatory minimum data elements set out in Chapter 5 / Annex 5-A of CUSMA.

Previous sample of the trilaterally agreed upon form used by Canada, Mexico, and the United States to certify that goods qualify for the preferential tariff treatment accorded by CUSMA. The Certificate of Origin must be completed by the exporter.

To allow W2C to apply the “duty-free” treatment under CUSMA to your products that will be customs cleared on or after July 1, W2C must be in possession of a valid CUSMA Certification of Origin, included either on the commercial invoice, Canada Customs Invoice or Proforma Invoice; or included on a CUSMA Certificate of Origin template of any format that contains all of the prescribed minimum data elements.

See also additional information on the CUSMA Certification of Origin, as published by the CBSA.

W2C has developed a CUSMA Certification of Origin template which you can access via the “Resources” tab available on our website: https://w2c.ca/en/resources/.

Also be advised that the “Rules of Origin” (NAFTA vs. CUSMA) for several products (HS Codes), have changed. Before goods produced in Canada, the United States or Mexico can be certified on a Certification of Origin, they must qualify as an “originating” product under the “Rules of Origin” of the new CUSMA agreement. A product previously certified under NAFTA is not valid if imported/exported on or after July 1. Such a product must be re-qualified and re-certified under the new CUSMA rules.

Donald J. Trump‏ Verified account@realDonaldTrump  4:04 PM · Jun 9, 2018·

PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy! – 

NORTH AMERICAN FREE TRADE AGREEMENT

Click here to return to NAFTA Index page

NAFTA – Chapter One: Objectives PART ONE: GENERAL PART

Article 101 : Establishment of the Free Trade Area
Article 102 : Objectives
Article 103 : Relation to Other Agreements
Article 104 : Relation to Environmental and Conservation Agreements
Article 105 : Extent of Obligations
Annex 104.1 : Bilateral and Other Environmental and Conservation Agreements

Article 101: Establishment of the Free Trade Area

The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade , hereby establish a free trade area.

Article 102: Objectives

1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment and transparency, are to:

• a) eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties;
• b) promote conditions of fair competition in the free trade area;
• c) increase substantially investment opportunities in the territories of the Parties;
• d) provide adequate and effective protection and enforcement of intellectual property rights in each Party’s territory;
• e) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and
• f) establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.

2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law.

Article 103: Relation to Other Agreements

• 1. The Parties affirm their existing rights and obligations with respect to each other under the General Agreement on Tariffs and Trade and other agreements to which such Parties are party.
• 2. In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.

Article 104: Relation to Environmental and Conservation Agreements

1. In the event of any inconsistency between this Agreement and the specific trade obligations set out in:

• a) the Convention on International Trade in Endangered Species of Wild Fauna and Flora , done at Washington, March 3, 1973, as amended June 22, 1979,
• b) the Montreal Protocol on Substances that Deplete the Ozone Layer , done at Montreal, September 16, 1987, as amended June 29, 1990,
• c) the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal , done at Basel, March 22, 1989, on its entry into force for Canada, Mexico and the United States, or
• d) the agreements set out in Annex 104.

• 1, such obligations shall prevail to the extent of the inconsistency, provided that where a Party has a choice among equally effective and reasonably available means of complying with such obligations, the Party chooses the alternative that is the least inconsistent with the other provisions of this Agreement.
• 2. The Parties may agree in writing to modify Annex 104.1 to include any amendment to an agreement referred to in paragraph 1, and any other environmental or conservation agreement.

Article 105: Extent of Obligations

The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement, including their observance, except as otherwise provided in this Agreement, by state and provincial governments.

Annex 104.

1 Bilateral and Other Environmental and Conservation Agreements

• 1. The Agreement Between the Government of Canada and the Government of the United States of America Concerning the Transboundary Movement of Hazardous Waste , signed at Ottawa, October 28, 1986.
• 2. The Agreement Between the United States of America and the United Mexican States on Cooperation for the Protection and Improvement of the Environment in the Border Area ,

signed at La Paz, Baja California Sur, August 14, 1983.

These agreements electronically are a public service for general reference. Every effort has been made to ensure that the text presented is complete and accurate. However, copies needed for legal purposes should be obtained from official archives maintained by the appropriate agency.

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