What is USMCA and how do I fill it out?

If you’re involved in importing or exporting goods within North America, you must understand the USMCA (United States–Mexico–Canada Agreement). This modern trade pact replaces NAFTA and streamlines cross-border commerce, offering significant tariff benefits for eligible products. However, to claim these benefits, you must correctly complete a USMCA Certificate of Origin, which proves that your goods comply with the rules of origin. Not sure where to start? Don’t worry — this guide will talk you through the USMCA and how to complete the form, step by step, to help you stay compliant and save on duties.

What is USMCA?

The United States-Mexico-Canada Agreement (USMCA) is a trade agreement that came into effect on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). It aims to facilitate trade between the U.S., Canada, and Mexico by ensuring tariff-free access for most goods and services, provided they meet specific rules of origin and compliance standards.

Key features of the USMCA include:

• Tariff-Free Trade: Most goods can be traded without tariffs if they comply with the agreement’s rules.
• Labor and Environmental Standards: The agreement includes updated provisions to enhance labor rights and environmental protections.
• E-commerce and Digital Trade: It addresses modern trade issues, including digital commerce, which is increasingly essential in today’s economy.
• Automotive Industry: Stricter rules on automotive parts and vehicles to encourage production in North America.

How to fill out a USMCA Certificate of Origin

Completing a USMCA Certificate of Origin is crucial for qualifying for preferential tariff treatment under the agreement. Here’s a step-by-step guide to help you complete it accurately:

Steps to Fill Out the USMCA Certificate of Origin

1. Certifier Information:
   • Indicate whether you are the Exporter, Producer, or Importer by marking the appropriate box.
   • Provide your company name, address, email, and phone number.
2. Exporter Details (if different from the certifier):
   • Include the exporter’s name, address, email, and phone number. If unknown, you can state “Unknown.”
3. Producer Details:
   • List the producer’s name, address, and contact information. If there are multiple producers, you can state “Various.”
4. Importer Details (if known):
   • Provide the importer’s name, address, email, and phone number. If unknown, state “Unknown.”
5. Description of Goods:
   • Write a clear description of the goods being exported. This should be sufficient to identify the products.
6. HS Tariff Classification:
   • Include the Harmonized Tariff Schedule (HTS) code for the goods, typically to the 6-digit level.
7. Origin Criterion:
   • Specify the origin criterion that applies to the goods (A, B, C, or D) based on the USMCA rules of origin:
     • A: Wholly obtained or produced in North America.
     • B: Produced using non-originating materials but meets specific requirements.
     • C: Produced exclusively from originating materials.
     • D: Specific conditions for certain goods.
8. Period Covered by Certification (if applicable):
   • If the certificate covers multiple shipments, indicate the date range (up to 12 months).
9. Certification:
   • Sign and date the certificate. Include your title and company information. By signing, you confirm that the goods meet the requirements under the USMCA rules.

Common Mistakes to Avoid

• Incorrect HTS codes or origin criteria.
• Leaving sections incomplete.
• Misusing blanket periods for non-identical goods.

How To Meet USMCA Origin Criterion

To meet the USMCA origin criterion, your goods must comply with specific rules of origin defined in the agreement. Here’s how to ensure your products qualify:

Four Origin Criteria

1. Criterion A:
   • Products that are wholly obtained or produced entirely in the territory of one or more USMCA countries. This includes goods like agricultural products or minerals extracted from the land.
2. Criterion B:
   • Products that are produced entirely in one or more USMCA countries using non-originating materials. This means that, although the product is manufactured in North America, some components may be sourced from outside the region.
3. Criterion C:
   • Products that are produced in North America exclusively from originating materials. This means all components used in the product must come from USMCA countries.
4. Criterion D:
   • Products that are produced entirely in the territory of one or more USMCA countries and meet specific regional value content requirements. For example, a product must have a regional value content of at least 60% if using the transaction value method.

How to check if goods qualify for USMCA?

To check if your goods qualify for the USMCA (United States-Mexico-Canada Agreement), follow these steps:

Steps to Determine Qualification

1. Understand the Rules of Origin:
   • Review the rules of origin outlined in the USMCA. Your goods must meet specific criteria to be considered “originating.” This includes being wholly produced in the USMCA region or meeting the regional value content (RVC) requirements.
2. Check the Origin Criteria:
   • Identify which of the four origin criteria applies to your goods:
     • Criterion A: Wholly obtained or produced in North America.
     • Criterion B: Produced using non-originating materials but meets specific requirements.
     • Criterion C: Produced exclusively from originating materials.
     • Criterion D: Meets regional value content requirements.
3. Calculate Regional Value Content (RVC):
   • Determine the percentage of the product’s value that originates from USMCA countries. Different products have different RVC requirements, so consult the specific rules for your product category.
4. Review Documentation:
   • Ensure you have the necessary documentation to support your claim. This includes invoices, production records, and any supplier declarations that demonstrate compliance with the origin criteria.
5. Use the USMCA Certificate of Origin:
   • While a specific certificate is not mandatory, you can use a USMCA Certificate of Origin to document compliance. This certificate should include the required data elements, such as the description of the goods, HTS classification, and the origin criterion.
6. Consult Customs Resources:
   • Utilize resources from the U.S. Customs and Border Protection (CBP) and other trade organizations for guidance on compliance and to clarify any uncertainties.
7. Seek Expert Advice:
   • If you’re unsure about your product’s eligibility, consider consulting with a customs broker or trade advisor who can provide tailored guidance based on your specific situation.

What are the key provisions under USMCA?

The United States-Mexico-Canada Agreement (USMCA) includes several key provisions designed to modernize trade relations among the three countries. Here are the most significant ones:

1. Rules of Origin: To qualify for tariff-free treatment, a product must meet specific rules of origin. For example, 75% of automotive parts must be made in North America, and textiles must use regional yarns and fabrics.
2. Labor and Environmental Standards: The agreement strengthens labor rights and environmental protections, requiring countries to uphold specific standards to ensure fair competition and sustainable practices.
3. Digital Trade: USMCA includes provisions that promote e-commerce and digital trade, facilitating the flow of data across borders and reducing barriers to online trade.
4. Intellectual Property Rights: Enhanced protections for intellectual property, including patents, copyrights, and trademarks, to encourage innovation and creativity.
5. Agricultural Trade: The agreement expands market access for U.S. agricultural products in Canada and Mexico, allowing for greater exports of dairy, poultry, and eggs.
6. Automotive Industry: Stricter requirements for the automotive sector, including higher regional content requirements and labor value content thresholds, are to ensure that a significant portion of vehicle production occurs in North America.
7. Certificate of Origin: Businesses must provide a Certificate of Origin to prove that their products meet the USMCA requirements, which includes specific data elements about the product and its production.
8. Documentation Retention: Companies are required to maintain documentation related to USMCA claims for a minimum of five years in the U.S. and six years in Canada and Mexico.