The U.S., Mexico, and Canada are faced with many issues relating to security, environmental concerns, trade, immigration, transportation, and infrastructure. In 2018 we posted a few blogs about the new/proposed or modified Free Trade agreement now known in the US as US, Mexico, Canada Agreement or USMCA (Canada and Mexico have different names for this agreement).
Now is the time to review the Free Trade Agreement that is open for discussion, NAFTA 2.0. If you have not done so yet please take the time now to understand the details that this new agreement puts forth for your business.
Let's take this time to understand what changes in this agreement so that we can learn about what works for us or what might need to change.
One of the first items that we need to understand is that many of the provisions are the same as in the original agreement; for instance, the preference criteria under the rules of origin. However, many new provisions contained were part of the negotiations of the TPP agreement (which was never approved by Congress) like digital trade, SME, and labor obligations by all parties.
A welcomed improvement to the new agreement states that no specific certificate of origin form will be needed, however certification and supporting documents are required and responsibility does shift from the previous agreement from the exporter to the importer of the goods.
It is very important to understand that all parties may not be 100% satisfied at all times with an agreement, and as such, NAFTA 2.0 serves as a reminder. While we may not like all that is put forth we need to make adjustments and find a way to make this fit into our supply chain.