April 23, 2020

COAC Recommends Delaying CUSMA’s Entry Into Force Until 2021

The Commercial Customs Operations Advisory Committee, which advises the heads of the Homeland Security and Treasury departments on CBP operations, has recommended delaying USMCA’s (also referred to as CUSMA) entry into force until next year. The working group was launched in March under COAC to help solicit guidance from the private sector on the deal’s implementation.

“COAC recommends that CBP, the USTR and its USMCA partners should delay USMCA’s entry into force until no earlier than January 1, 2021 and provide a transition or implementation period for the year where NAFTA qualifying goods with appropriate certificates of origin will be considered to comply under the USMCA,” the advisory panel said in a presentation delivered at the meeting, according to Brenda Barnes, a member of the USMCA working group.

Governments had originally hoped for the agreement to go into affect as early as June 1, however, are now facing pressure from the auto industry, lawmakers, and others to push back of the date as companies attempt to grapple with the impact of the COVID-19 pandemic. Companies are saying that they need more time to comply with USMCA’s new rules of origin.

USMCA will have numerous impacts on import and export activity, including changes to low value shipments, requiring a formal certificate, and de-minimis. Click here to read more about those changes.

Despite recommendations from COAC, John Leonard, Executive Director of Trade and Policy Programs in CBP’s Office of Trade, stated that CBP was still tracking for entry into force on June 1, adding that any change would be announced by USTR.

The advisory group said that should USMCA “enter into force as scheduled, at the very least, CBP and its USMCA partners should grant enforcement discretion by way of an informed compliance period until the trade has had reasonable time to implement each administration’s regulatory and automation requirements.”