International Trade Blog

The United States-Mexico-Canada Agreement (USMCA) went into effect just over one year ago, replacing the North American Free Trade Agreement (NAFTA) and promising to increase North American trade. NAFTA created a solid foundation for trade liberalization. It reduced most tariffs to zero, subsequently bringing trade levels up by $1 trillion. Now its successor updates and tweaks several of its provisions. 

In honor of the USMCA’s first birthday, we thought we’d look at how implementation has gone. What, if anything, has changed over the past year?

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Now that Brexit is finalized, many are wondering what this means for trade between the United States and the United Kingdom. Both countries were restricted from formerly negotiating a trade pact while the U.K. was part of the European Union (EU). However, unbeknownst to many, the U.S. and the U.K. held informal talks for some time prior to Brexit so that a structure would be ready when the time came.

Former President Trump was very much in favor of a deal with the U.K., even though conceptually he did not like bilateral trade agreements. Part of this was his affinity for U.K. Prime Minister Boris Johnson and some antipathy for EU leaders. President Biden is also expected to pursue a trade deal with the U.K.

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Importers and exporters know that trade has become part of the lifeblood of the American economy.

The numbers are astounding: 39 million jobs—including 6 million manufacturing positions—depend on trade, according to a 2019 study by Trade Partnership Worldwide. In 2018, American farmers exported $139.6 billion worth of agricultural products. And small- and medium-sized businesses make up 98% of U.S. exporters.

This is largely owing to the buildup of trade relationships with other countries. The United States is currently working on its 15th free trade agreement with its 21st trading partner, and it's hard to imagine a world without these partnerships. But less than a century ago, the landscape looked completely different.

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If your company is importing goods duty free from Mexico thanks to the United States-Mexico-Canada Agreement (USMCA), you need to ensure your vendors are following Mexican labor laws or you could find yourself staring at a big bill for overdue duties.

The USMCA went into effect on July 1, replacing the North American Free Trade Agreement. NAFTA ushered in a new era for North American trade, and the USMCA looks to build on that momentum, mostly keeping NAFTA’s tariff structure, while addressing aspects of the economy that weren’t big priorities in 1994, like e-commerce and digital trade.

Some of the updates in the new agreement got a lot of media play, like new rules of origin requirements and the sunset clause. There’s another important change, though, that’s less talked about: the Rapid Response Labor Mechanism. It may have garnered less attention than some of the other policies, but it matters just as much to importers and exporters.

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The certificate of origin is a document issued by an exporter that confirms and certifies the country of origin of its products.

Alternatively, it might be a separate letter or form that incorporates a statement indicating the country of origin is as stated on the commercial invoice and certifies the document is true and correct; it is then signed by the exporter’s employee.

It is issued by the exporter, stamped by a Chamber of Commerce, and supported by a commercial invoice declaring the same information.

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As an exporter, you are required to provide documents to accompany your international shipments. The number and kinds of documents that you must prepare will vary depending on where, what and how you are shipping.

A certificate of origin (COO) may be one of the export forms you need to produce.

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If you spend any time on the web (and who doesn't), I think you can relate to one of my pet peeves. It seems like every website I visit wants a unique password and username—one I have to either memorize or write down, so I can refer to it each time I log in.

If you don’t have that information handy, or you’re working on a different computer (say, a laptop vs. your desktop), you have to reset your password.

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On July 1, 2020, the North American Free Trade Agreement, or NAFTA, expired, and the United States-Mexico-Canada Agreement (USMCA) took its place. NAFTA had a good run. It went into effect in 1994 and created the world’s largest free trade zone between the United States, Canada and Mexico.

The goal of NAFTA was to bolster trade by reducing or eliminating most trade barriers (primarily in the form of tariffs), which it did. Between 1993 and 2017, trade between the three countries rose from $290 billion to more than $1.3 trillion.

Now, the USMCA takes its place. The new agreement modernizes NAFTA and addresses topics that were less relevant in 1994, such as e-commerce and the flow of international data.

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On April 24, 2020, the U.S. Trade Representative announced that the United States-Mexico-Canada Agreement (USMCA) will enter into force and replace NAFTA on July 1, 2020. In this announcement, the Trade Representative said this new free trade agreement will provide "significant improvements and modernized approaches to rules of origin, agricultural market access, intellectual property, digital trade, financial services, labor, and numerous other sectors."

While the new agreement is no surprise, the timing of its implementation caught many companies off guard coming in the midst of a pandemic and economic turmoil. These companies are now rushing to prepare for July 1.

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If you’ve been paying attention to the news, you’ve probably seen or heard something (maybe a lot of things) about the end of NAFTA, the North American Free Trade Agreement, and the beginning of a new trade agreement called the United States-Mexico-Canada Agreement or USMCA.

Well, after years of talk, it's finally happened. On July 1, 2020, NAFTA was replaced by USMCA.

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