With the new USMCA North American free trade agreement scheduled to come into effect on July 1, a consultant firm is advising exporters on both sides of the border – including those in B.C. - to get their operations in order to avoid last-minute disruptions.
Analysts with Minnesota-based C.H. Robinson Worldwide also noted in a webinar held this week that – even if an exporter is completely up-to-date with their sector’s new requirement under the USMCA (also known as CUSMA in Canada) – it is imperative for companies to keep an eye out for constant changes to trade rules, since an element in the USMCA not present in the NAFTA agreement it replaces is the presence of renegotiation provisions.
“The review and sunset clause [of the USMCA] says agreement will be reviewed every six years,” said Kevin Doucette, C.H. Robinson’s director of North American trade policy and compliance. “So unlike NAFTA, the USMCA is scheduled for review every six years... So every six years, this program will likely change in some way, and therefore you will need to ensure compliance with the changes for your organization.”
Company freight policy manager Jeff Simpson added that – now with less than a month to the implementation of USMCA – exporters have to learn the frameworks for their specific sectors right away, and the qualification process for needed certifications should be undertaken immediately.
The most significant changes from NAFTA, he noted, are provisions in the automotive sector (where the North American content rules have been revised), the textile/apparels sector (tariff rule changes), de minimus rule changes (which affects e-commerce shipments that can cross the border without triggering duties) and things like digital trade and intellectual property.
“I was in school during the time of drafting of NAFTA.... we had no Internet,” Simpson said. “I was lucky to have a dot-matrix printer at my disposal to use. So can you imagine the lack of digital downloads of any sort, let alone the massive scale we have now... NAFTA was a product of its time; it needs to evolve. That’s where the spirit of why the discussions around the USMCA took place.”
Doucette also noted that – with the USMCA’s requirement for companies to keep records up to five years in the past – exporters cannot forget about their documentation under NAFTA, because much of it will be required in the first years of the USMCA if trade authorities request it.
“You need to understand the agreement,” he said. “You really need to understand how it pertains to your particular industry and fully comprehend what your responsibilities are if you intend to take part in the USMCA – as importer, exporter or producer. If you have questions, now is the time to reach out... to obtain assistance. If you are sourcing materials within North America, verify their origins by reaching out to your suppliers. Don’t assume.”
