The Challenge Exporters Face in Complying with Free Trade Agreements

When exporters download our free export forms, I am often asked the question: What is the appropriate way to fill out a certificate of origin (COO) if the exporter isn’t the producer of the goods?

And it’s a good question. If you’re not the producer of the goods, it’s highly likely that the only way you’ll know if the goods qualify for preferential treatment accorded by a free trade agreement (FTA) is by getting a COO or a manufacturer’s affidavit from the producer of the goods. Without that assurance, you shouldn’t fill out a certificate of origin.

Think of a FTA COO like your income tax returns. By signing at the bottom of the form, you are legally certifying that the information on the form is correct, and you can prove it in the event of an audit.

The most common certificate of origin is the NAFTA COO, so we’ll use that example here. But the same guidelines apply to all 14 free trade agreements the U.S. has entered into with 20 countries.

Complying with FTAs

If your company is selling goods to a foreign customer, you are the exporter and your supplier may be the producer of the goods. Or perhaps your supplier is a distributor and someone else is the producer—you'll have to check and see. (And remember, just because the goods are manufactured in the United States doesn't necessarily mean they qualify for NAFTA!)

If the goods do, in fact, qualify for NAFTA, your supplier (or their supplier) can fill out a NAFTA Certificate of Origin and enter their contact information in the Producer field (leaving the Exporter field blank). Or, they can fill out a Manufacturer's Affidavit form, also known as a Manufacturer's Certificate. (We discuss defining and using a Manufacturer’s Affidavit in detail in this article.) Essentially, the producer needs to indicate that their goods qualify for NAFTA and under which preference criteria.

Remember, participation in NAFTA is voluntary. There is no way to compel a supplier to provide a COO or Manufacturer's Affidavit, and sometimes getting one can be difficult, particularly if the producer is not an exporter themselves, isn’t familiar with export regulations, or just doesn’t think it’s a worthwhile endeavor.

There is work required to prove that an item actually qualifies under NAFTA or any other free trade agreement. If they choose to forego filling out the form, you might consider finding a different supplier who is more cooperative. 

How to Create COOs More Easily

For many exporters, this isn’t the straightforward answer they were hoping for. Unfortunately, that's because it isn’t always easy to take advantage of NAFTA. But if you do determine it’s beneficial to use a COO for free trade agreements, there is a way to produce them that makes the process faster and more accurate.

Shipping Solutions software simplifies the certificate process. Each time you create a certificate of origin, the information is stored within the software. It then uses the information from the pre-existing certificate to help you create new ones. You can easily copy information to a new record, change the date, and quickly review the information for accuracy in order to create your new COO. This ensures you always use the correct information when you’re filling out a form.

Shipping Solutions software saves you lots of time creating certificates of origin (and all other forms, too) and spares you costly errors. Don't just take our word for it, though. Click here to watch a short introductory video about the Shipping Solutions software, or follow this link to schedule a private online demo of the Shipping Solutions software.