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n the beginning of June, US Customs and Border Protection (CBP) released the updated Interim Implementation Instructions, an informal guide to the new requirements under the US-Mexico-Canada Agreement (USMCA). These instructions included guidance regarding rules of origin, regional value content calculation methods, de minimis rules, transshipment, eligibility for textiles and apparel, making preference claims, and certification and record keeping rules and requirements. These were to be followed until the July 1, 2020 when the USMCA would be entered into force.
With USMCA beginning this will mark the end of the almost 30-year-old North American Free Trade Agreement (NAFTA). Although USMCA will bring some changes, much of the agreement will stay the same. A few changes the new agreement brings is it will now require 75% of a vehicles parts to be made in one of the three countries in order to remain tariff free as well as requiring more vehicle parts to be made by workers earning at least $16 per hour. The USMCA will keep tariffs at zero for most agricultural products as well as further opening up Canadian markets to US farmers. The agreement moves to address environmental problems in the region by providing $600 million and makes these regulations easier to enforce by getting rid of the requirement to prove a violation affects trade. These are just some of the differences that will now be brought to effect on July 1, 2020.
While there have been changes made transport of goods across borders will look similar once the agreement goes into effect. The key change will be in the documentation that companies will use to claim USMCA compliance. The USMCA does not require a specific compliance form, as NAFTA does, and instead allows companies to make a claim in multiple formats, including electronically. Many customers will rely on customs brokers and freight forwarders to guide them through this process and change. Be sure to contact your ChemCeed Sales Representative if you have any questions.