NAFTA: US's New Trade Agreement

If you manufacture, produce, or sell your products or services across borders, then the USMCA will affect your shipping strategy. There are some significant changes to know, and they are:

Digitized Regulations

One of the biggest challenges in cross-border trade has been the lack of easily accessible, accurate trade regulation information and documents. Inaccurate information and documents make it nearly impossible for small businesses to expand their shipping across borders.

The USMCA requires the U.S., Mexico, and Canada to provide free, accurate, and easily accessible online documentation that addresses each country’s regulations, laws, trade procedures, duties, charges, and documentation requirements for enhanced transparency.

Online Document Processing

When you are a small business owner trying to get your shipments out on time to your customers, you don’t have extra time to search for the cross-border shipping documents you need for each specific country. In the USMCA, you won’t have to search anymore.

The new trade agreement has directed the U.S., Mexico, and Canada to create a digital platform that is both simple and easy to use. The goal of digital media is to streamline commerce and shipping. Shippers can submit customs declarations within each country’s forum and any other country-specific forms or documents. Thus, the digital medium must be easily accessible to all shippers.

Streamline Compliance

Having too many rules makes it incredibly challenging for shippers to know which compliance rules to follow and when to follow them. In the USMCA, each country must adhere to uniform trade rules for exports and imports and consistent regulations. The goal is to make it easier for anyone shipping across the border to know which laws they must follow and when.

Updated Origin Procedures

Origin procedures have been updated in the USMCA as well. Updating origin procedures aim to improve modern trade and limit administrative costs to shippers and traders. Here’s how things have been updated:

–Provide electronic processes.
–Increase trader or shipper participation in verification and certification processes.
–Make it easier to certify the origin of goods.
–Bolster collaboration and cooperation between customs administrations while following the new rules.
–Maintain a balance between compliance and trade facilitation.

Certificate of Origin

In the USMCA, anyone importing goods must no longer complete a formal certification document. You can prove your origin with informal documentation, such as invoices or an informal origin certificate.

Under the USMCA, you will need to have the following information to show proof of origin:

–Organization’s information, including name, title, address, phone number, and email.
–Names of the exporter, producer, and importer.
–Description with details of goods and the tariff classification.
–Origin criteria.
–Blanket period (if applicable).
–Authorized signature and date (e-signatures are now accepted).
–Exact closing statement:

“I certify that the goods described in this document qualify as originating, and the information contained in this document is true and accurate. I assume responsibility for proving such representations and agree to maintain and present upon request or to make available during a verification visit, documentation necessary to support this certification.”

Remember, you must keep your certification documents for at least 5 years.

Increase in De Minimis

An increase in de minimis in the USMCA means that low-value goods can enter a country duty-free, so you won’t have to worry about paying more. This increase in de minimis is suitable for small businesses and shippers because it can increase your trade with the other nations in the agreement without you having to pay additional fees, such as duties or taxes. Here’s a breakdown of the de minimis update:

–United States: USD 800.
–Canada: CAD 150 for duties (customs) and CAD 40 for taxes.
–Mexico: USD 117 for duties (customs) and $50 U.S. for taxes.

Express Shipments

To ease the strain and keep shipments moving more smoothly, all express shipments in the USMCA must be processed by customs before the arrival of the shipment. The load can be released quickly if all the necessary documents and essential data are there. That’s good news for your small business and your customers!

Single Window Clearance

As with most of the updates in the USMCA, the goal of this update is to speed up and streamline the shipping process. Having everything you need in one place is very important, which goes for cross-border shipping. In the USMCA, new provisions have been made that require a technology-based single window clearance system to be set up that informs all importers, exporters, and others in the shipping process to keep track of the shipment’s status.