Comprehensive FAQ Guide
for CUSMA and USMCA

The Canada-United States-Mexico Agreement (CUSMA) and the United States-Mexico-Canada Agreement (USMCA) are trade agreements designed to replace the North American Free Trade Agreement (NAFTA). These agreements aim to facilitate trade between the three countries, providing numerous benefits and simplifying processes for importers and exporters. This comprehensive FAQ guide will cover everything you need to know about CUSMA/USMCA, including the benefits, requirements, and steps to take advantage of the agreements.

CUSMA/USMCA

What is CUSMA/USMCA?

CUSMA (Canada-United States-Mexico Agreement) and USMCA (United States-Mexico-Canada Agreement) are modernized trade agreements that replaced NAFTA. They aim to promote fair and reciprocal trade, foster economic growth, and create jobs in the three member countries. The agreements came into effect on July 1, 2020.

Benefits

Who benefits from CUSMA/USMCA?

  • Manufacturers: Reduced tariffs and streamlined customs procedures.
  • Farmers and Ranchers: Improved market access for agricultural products.
  • Consumers: Increased availability of goods at competitive prices.
  • Service Providers: Enhanced market opportunities in various sectors.
  • Small and Medium-Sized Enterprises (SMEs): Simplified trade rules and reduced barriers.
Advantages

What are the advantages of CUSMA/USMCA?

  • Tariff Elimination: Duty-free treatment for qualifying goods.
  • Simplified Rules of Origin: Easier to determine if a product qualifies for preferential treatment.
  • Improved Customs Procedures: Streamlined processes for faster clearance.
  • Intellectual Property Protections: Enhanced IP rights enforcement.
  • Digital Trade: Robust rules for cross-border data flows and digital trade.
Key Provisions

What are the key provisions of CUSMA/USMCA?

  • Rules of Origin: Criteria for determining the country of origin of goods.
  • De Minimis Thresholds: Increased thresholds for duty-free shipments.
  • Labor and Environmental Standards: Stronger labor and environmental protections.
  • Dispute Resolution Mechanisms: Procedures for resolving trade disputes.
  • Sector-Specific Rules: Specific provisions for industries like automotive, dairy, and pharmaceuticals.
How to qualify

How do I qualify for CUSMA/ USMCA benefits?

To qualify for benefits under CUSMA/USMCA, your goods must meet the specific rules of origin outlined in the agreements. These rules determine whether a product is eligible for preferential tariff treatment based on its components and where it was produced.

certificate of origin

What is a certificate of origin, and how do I obtain one?

The Certification of Origin is a document used to certify that a product meets the specific rules of origin under the Canada-United States-Mexico Agreement (CUSMA), the United States-Mexico-Canada Agreement (USMCA), or the Tratado entre México, Estados Unidos y Canadá (T-MEC). This certification is essential for claiming preferential tariff treatment, ensuring that goods can enter the member countries duty-free or at reduced tariff rates. To obtain one:

  1. Determine Eligibility: Verify that your goods meet the rules of origin.
  2. Complete the Certificate: Use the template provided by the CBSA or FedEx.
    CBSA Certificate of Origin Instructions
    BorderBuddy CUSMA Certificate of Origin Form
  3. Sector-Specific Rules: Specific provisions for industries like automotive, dairy, and pharmaceuticals.
Get started

How do I get started with CUSMA/USMCA?

Follow these steps to get started:

  1. Review the Agreement: Understand the key provisions and benefits.
  2. Determine Product Eligibility: Check if your products meet the rules of origin.
  3. Complete Required Documentation: Prepare and submit a Certificate of Origin.
  4. Consult with a Trade Expert: Seek advice from a customs broker or trade consultant.
  5. Stay Informed: Keep up-to-date with any changes or updates to the agreement.
duty & tax liabilities

What are My Duty and Tax Liabilities under CUSMA/USMCA?

Duty and tax liabilities depend on whether your goods qualify for preferential treatment under the agreement. If they do:

  1. Duty-Free Entry: Eligible goods can enter the member countries duty-free.
  2. Reduced Tariffs: Some goods may have reduced tariffs instead of complete elimination.
  3. Tax Responsibilities: You are still responsible for paying any applicable taxes (e.g., GST/HST in Canada).
steps

Steps to Fill Out the Certification of Origin

Filling out the Certification of Origin accurately is crucial to avoid delays and ensure compliance. Here are the detailed steps to complete this document:

1. Exporter Information

An EIN is a unique number assigned by the IRS to identify a business entity. It is required for all businesses that file taxes or conduct business in the U.S. Your EIN can be your 3PL warehouse if necessary.

Name, Address, and Contact Details:

Include the complete name, address, and contact information of the exporter.

Tax Identification Number:

Provide the exporter’s tax identification number.

2. Certifier Information

Name, Address, and Contact Details:

The certifier can be the exporter, producer, or importer. Include their complete name, address, and contact details.

Certifier’s Statement:

A declaration stating that the information provided is accurate and that the goods qualify for preferential treatment under CUSMA/USMCA/T-MEC.

3. Importer Information

Name, Address, and Contact Details:

Provide the importer’s complete name, address, and contact information. This section may be left blank if unknown at the time of certification.

4. Description of Goods

Detailed Description:

Describe the goods in sufficient detail to relate to the invoice and the Harmonized System (HS) code.

HS Code:

Include the HS code for each good. This code helps determine the applicable tariff.

5. Origin Criteria

Specify the Origin Criteria:

Indicate the applicable rule of origin for each product (e.g., wholly obtained, produced entirely, regional value content, etc.).

6. Blanket Period

Effective Date Range:

If the certification covers multiple shipments of identical goods, specify the period the certification covers (up to 12 months).

7. Authorized Signature

Signature and Date:

The certifier must sign and date the document. The signature certifies that the goods qualify as originating and that the information provided is accurate.

errors

Common errors to avoid

  1. Incomplete Information: Ensure all sections are filled out completely and accurately.
  2. Incorrect HS Codes: Double-check HS codes for accuracy.
  3. Misstated Origin Criteria: Verify that the correct origin criteria are applied to each product.
  4. Lack of Supporting Documentation: Maintain records and documentation that support the claims made in the certification.
Resources

Additional resources

For detailed instructions and a step-by-step guide on how to fill out the Certification of Origin under CUSMA/USMCA/T-MEC, visit the comprehensive guide provided by the CBSA. Read more.

why us

How can BorderBuddy help?

Filling out the Certification of Origin accurately can be complex and time-consuming. BorderBuddy offers expert assistance to ensure your certification is completed correctly and efficiently. Our services include:

  • Certification Guidance: Step-by-step assistance in completing the Certification of Origin.
  • Compliance Review: Verification that your goods meet the origin criteria under CUSMA/USMCA/T-MEC.
  • Documentation Management: Helping you maintain proper records and supporting documentation.

For more information and personalized assistance, contact BorderBuddy today.

By ensuring your Certification of Origin is filled out accurately and completely, you can take full advantage of the benefits offered by CUSMA/USMCA/T-MEC and streamline your import processes. BorderBuddy is here to help you every step of the way.