Say bye-bye to the North American Free Trade Agreement NAFTA! As we know as of 2018 the NAFTA was being pushed out by President Trump. The NAFTA was to be replaced by a new agreement, U.S.-Mexico-Canada Agreement (USMCA). But without Canada jumping on board it was at a stand still. As of July 1, 2020 the USMCA trade agreement is a go!
Now what does this mean? There are six major areas of improvement as cited on the https://www.trade.gov/ website. Intellectual Property Rights, Agriculture Customs and the Trade Facilitation Financial Services, Textiles Advanced Rulings are some. I recommend doing research on their site and find out how this can benefit you as a business owner or investor.
With this trade agreement paperwork will be uniform going across all three countries, so documents like certificate of origin. A new set of guidelines will be enforced, which can be completed electronically. (I’m guessing online). The new guidelines only require nine key elements to claim certificate of origin under the USMCA include the following Importer, Exporter or Producer (indicate which is certifier) Name and address of Certifier Name and address of Exporter Name and address of Producer Name and address of Importer Description and Harmonized System Tariff Classification of the good to the 6-digit level Specific Criteria under which the good meets USMCA originating requirements Blanket Period (certification is valid up to 12 months in the case of multiple shipments of identical goods) Authorized Signature and Date But a certificate is not required for imports valued $2,500.00 or less within its regulations and meeting the needs of record keeping. With that alone is a win for small businesses.
Now De Minimis! (Latin for about minimal things) No duties or tariffs will be collected with de minimis thresholds in place. Which allows for faster, cheaper trade between three parties in agreement. With America and Mexico keeping its values from prior negotiations, Canada will increase its level from C$20 to C$40 on taxes. (items pass through duty/tax free) Also as of today Canada will expand and adjust its tariffs on a few of its dairy products including milk, cheese, cream to name a few. Products under the original NAFTA will remain the same with zero tariffs. Canada will also drop tariffs on whey and margarine. (I wonder if that includes butter?) As the SBA has stated this is a move forward for small businesses. With lower trading cost small and mid size businesses can now expand. With less paperwork and no need for a foreign office or foreign representative we should see better prices and growth in this sector. This is also great for e-commerce with higher de minimis, more money is saved. Prices could be reflected on merchandise and goods, or business owners can make a profit. With covid looming businesses of all sizes are taking a hit. With that being said every dollar saved is a dollar earned. Please visit: https://www.sba.gov/about-sba/sba-locations/headquarters-offices/office-international-trade/international-saleshttps://www.trade.gov/usmca