USMCA..passed!

North America globe

With the House of Representatives and US Senate voting to pass the USMCA (NAFTA 2.0) last week, the bill is now one step closer to ratification as it now heads to President Trump’s office for the official signing. Mexico has already ratified the agreement, and it is also in review with Canada’s government before it is officially ‘passed’. Barring any unforeseen issues, USMCA should be fully reviewed and passed by the enf of January. 

As you may recall from one of our previous blogs on the subject, 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.

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.

So, let’s ask the question, What steps should I take now to help a smooth transition to the new FTA?

I would like to suggest that you review the most current details on USMCA and take note of those sections that apply to your products/business. Some of the rules of origin are different under USMCA versus NAFTA 1.0, so you may need to review the changes and how your product now qualifies.

The second question to review, What about my current certificates of origin? Do I need to pull them back? Yes, when the time comes for the implementation of the new agreement you will need to make changes to your program and the supporting documents that you have with your customers and/or suppliers.

If you have any questions regarding the new agreement or changes that may need to be made in your supply chain please do not hesitate to contact me.