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NAFTA Certificate of Origin

North American Free Trade Agreement (NAFTA) was in effect from January 1st, 1994 to July 1st, 2020. This treaty was in charge of trade across North American borders. The NAFTA Certificate of Origin is a document that enabled international commerce throughout North America including the USA, Canada, and Mexico. Rules of Origin are required for permitting products for duty-free benefits.

Although, free trade was already in effect between the United States and Canada since the late 1980s. When NAFTA was instated, it lifted restrictions allowing Mexico into the trading system. over 15 years NAFTA has phased out over 50 percent of tariffs while the rest are targeted to also be eliminated over some more time. With how problematic prior trade plans were regarding tariff barriers and taxes, NAFTA was brought into play to eliminate those extra expenses for cross-border North American shipments.

Why is A Certificate of Origin Needed?

The Certificate of Origin is used by NAFTA countries (USA, Canada, and Mexico). This document is to show where the goods come from and check eligibility for reduced or eliminated taxes for imported goods. For transportation of the goods, this document must be completed by the exporter or producer and be in the possession of the shipper by the time, it is ready for transport.

A product can qualify for tariff treatment due to value added from non-NAFTA countries. NAFTA rules of origin apply when there is a:

  • Change in tax class
  • Regional value content requirement
  • Both

But, this certificate is not needed if the shipment does not qualify for tariff treatment.

When is it Required?

The certificate is required for shipments valued at:

  • USD 1,000 for goods being sent to Mexico from Canada or the U.S.
  • CDN 2,500 for goods being sent to Canada from Mexico or the U.S.
  • USD 2,500 for goods being sent to the U.S. from Canada or Mexico
  • Shipments valued at less than the above do not require the certificate

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