Nafta Agreement Rules

Apr 11, 2021 |

NAFTA allows your company to send qualified goods to customers in Canada and Mexico duty-free. Goods can be challenged in different ways depending on NAFTA`s rules of origin. This may be because the products are fully obtained or manufactured in a NAFTA party, or because, according to the product`s rule of origin, it takes enough work and equipment in a part of NAFTA to make the product what it is when it is exported. The rules of origin (ROO) are contained in the final text of the free trade agreement. From time to time, a particular roo may be revised. You`ll find the latest version of ROC in the U.S. Harmonized Tariff Plan, General Notes — General Note 33. In addition to the above rules of origin, there may be other ways to qualify your product: Section 412 also indicates that the product is not considered originating if an overload of evidence shows that a production or pricing practice was used to circumvent the intent of the Chapter 4 rules of origin. The rules of origin aim to ensure that the processing and costs of products are economically significant and product-friendly, as defined by the rules of tariff modification and, if necessary, by the rules on value content. NAFTA`s rules of origin contain the necessary measures to determine whether your products are eligible for the NAFTA preference.

Since there is no way to memorize all the terms of the agreement, you need to know how to use the rules to determine if your products are considered original products and put in place a system to check your company`s products. The rules of origin are very complex and you cannot make assumptions without a careful reading of the rules. For example, NAFTA`s rules of origin allow native products when products are “fully acquired or manufactured in the territory of one or more parties.” The rules of origin listed in Chapter 4 of NAFTA are used to determine whether the goods originate from a NAFTA area (in the United States, Canada or Mexico). NAFTA`s rules of origin take into account where the products are made and the materials used to manufacture them. Only goods originating under NAFTA are entitled to duty-free tariff treatment or a reduced tariff regime. (These rules should not be confused with the country of origin used for identification, quotas, anti-dumping or compensation cases.) NAFTA covers services other than air, marine and basic telecommunications. The agreement also provides protection for intellectual property rights in a wide range of areas, including patents, trademarks and copyrighted material. NAFTA`s procurement provisions apply not only to goods, but also to contracts for services and work at the federal level.

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