April 8, 2020
CUSMA — What You Need to Know About The Newest Free Trade Agreement
After almost three years of discussion between Canada, Mexico, and the United States, a deal was struck in the ongoing CUSMA negotiations. The new agreement was ratified by all three governments, however, all three governments must give their notice of readiness to comply with the new measures. Both Canada and Mexico have given their notice, while the United States has yet to send a similar notice to the other two partners. With the current COVID-19 pandemic impacting countries across the globe, the United States has now placed CUSMA at a lower priority.
If the United States provides their notice by the end of April, the earliest the new agreement could take effect is July 1, 2020.
In anticipation of CUSMA coming into effect, here is how CUSMA will impact your import and export activity:
- Low Value Shipments (LVS)
The Government of Canada has raised the threshold for Low Value Shipments to $3,300 CAD. This allows for expedient release of shipments under this program. Click here to learn more.
- Requirement for Formal Certificate
Under the previous NAFTA agreement, you were required to complete the formal NAFTA Certificate of Origin form. CUSMA aligns with recent agreements like CETA with the European Union and allows importers and exporters to provide a statement of origin.
During negotiations, the Government of Canada moved to increase the De-Minimis threshold to allow Canadian importers to import goods without any duty or tax implications. The De-Minimis threshold is as follows:
- Canada – $150 CAD for Duties and $40 CAD for Taxes
- Mexico – $117 USD for Duties and $50 USD for Taxes
- United States – $800 USD for Duties and Taxes
To review the full agreement, click here. We will share all future information about the new CUSMA agreement as they become available. Carson is committed to supporting our clients throughout this process to ensure compliance, and are happy to answer any questions you may have. Please do not hesitate to reach out to the team at Carson at any time.
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