NAFTA 2.0: What's in a name?

North American trucking

The United States, Mexico, and Canada have reached an agreement to modernize the 24-year-old NAFTA into a 21st century, high-standard agreement. After many rounds of negotiations, the US and Canada decided on a new trade agreement, aka NAFTA 2.0 or more formally, the United States Mexico Canada Agreement (USMCA).

While the 3 nations have agreed to the new deal, each one has some additional steps to take until the deal will be “official”. The countries all need to have agreements pass through regulatory administration for full acceptance. Once each country approves NAFTA 2.0, the agreement will go into effect on the 1st day of the third month following the last notification of approval. Thus, once all three countries have given their official notice of formal approval, the new agreement will take effect 3 months later.

The current NAFTA is anticipated to remain in effect until the new NAFTA is approved and implemented. As of yet, we do not have any transition dates on when current NAFTA regulation will cease to exist and when NAFTA 2.0 or USMCA will start.

Rotunda of US Capitol Building

A notable change in NAFTA 2.0 is the elimination of the current certificate of origin form (CBP Form 434). The new agreement will not have a specific form; instead, shippers will need to prove that the goods qualify under the new rules of origination. This can be included on the commercial invoice or a separate document. The 12-month certification will still stand to support the continuous flow of goods between all countries.

If you would like to view the agreement in full please click here.

As always, if you have any questions or concerns regarding NAFTA 2.0 and what this means for your business, please reach out to BDP’s Corporate Compliance Team.