New trade agreement, USMCA, replaces NAFTA

Learn how the United States-Mexico-Canada Agreement (USMCA) affects your FedEx® shipping.

On July 1, 2020, a new trade agreement between the United States, Mexico, and Canada will replace the 25-year-old North American Trade Agreement (NAFTA). Each participating country has its own name for it.

  • In the United States, it is the United States-Mexico-Canada Agreement    (USMCA).
  • In Mexico, it is the Tratado entre Mexico, Estados Unidos y Canada      (T-MEC).
  • In Canada, it is the Canada-United States-Mexico Agreement (CUSMA).

How is it different from NAFTA? And how will it affect your FedEx shipments? Find answers to these questions and others, and learn what you need to do to prepare shipments under the new agreement.

 

Please note that all information is subject to change depending on, among other things, issuance of final regulations. Updates will be provided as more information becomes available. 

Comparison of NAFTA vs. USMCA/T-MEC/CUSMA

What changed from NAFTA to USMCA/T-MEC/CUSMA?

Shipments for customs clearance on and after July 1, 2020 are eligible for the USMCA/T-MEC/CUSMA.

Who can certify? 

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NAFTA 

Shipper and importer

USMCA 

Importer, exporter, and producer

NAFTA 

Exporter and producer

USMCA/T-MEC/CUSMA

Importer, exporter, and producer


Low-value shipment

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NAFTA 

Canada: CAD $2500

Mexico: USD $1000

United States: USD $2500

 

USMCA 

Canada: CAD $3300

Mexico: USD $2500

United States: USD $2500 (no change) 

 

Canada: CAD $2,500

Mexico: USD $1,000

United States: USD $2,500

 

Canada: CAD $3,300

Mexico: USD $1,000

United States: USD $2,500 (no change) 

 


De minimis 

(value below which goods are not charged duties and taxes) 

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NAFTA 

Canada: Less than CAD $20 subject to duties and taxes

Mexico: Less than USD $50 subject to duties and taxes

United States: Less than USD $800 subject to duties and merchandise processing fees (MPF)

 

USMCA 

Canada: Less than CAD $40 subject to taxes and less than CAD $150 subject to customs duties and taxes

Mexico: Less than USD $50 subject to taxes and less than USD $117 subject to customs duties and taxes

United States: Less than USD $800 (no change) 

Canada: CAD $20 and less not subject to duties and taxes

Mexico: USD $50 and less not subject to duties and taxes

United States: USD $800 and less not subject to duties and merchandise processing fees (MPF)

 

Canada: CAD $40 and less not subject to duties and taxes and CAD $40.01-$150 not subject to duties; taxes apply

Mexico: USD $50 and less not subject to duties and taxes and USD $50.01-$117 not subject to duties; taxes apply

United States: USD $800 and less (no change) 


Proof of origin

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NAFTA 

NAFTA Certificate of Origin 

USMCA 

USMCA Certification of Origin 

Set of 9 data elements including a statement on a commercial invoice or as a separate document 

Certification is required* for: 

  • Shipments to Canada valued at greater than CAD $3,300
  • Shipments to Mexico valued at greater than USD $1000**
  • Shipments imported to the U.S. valued at greater than USD $2,500

NAFTA Certificate of Origin 

USMCA Certification of Origin 

Set of 9 data elements that does not have to be in a particular format and can appear on a commercial invoice or separate document. Annual blanket certifications are permitted

Certification is required* for: 

  • Shipments to Canada valued at greater than CAD $3,300
  • Shipments to Mexico valued at greater than USD $1,000**
  • Shipments imported to the U.S. valued at greater than USD $2,500

Automotive industry - content and components 

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NAFTA 

No requirements specified 

 

USMCA 

Zero customs duties for qualifying goods

75% of auto content and components manufactured in one of the USMCA countries, and 40-50% of auto content made by workers earning at least $16 per hour 

No requirements specified 

 

Zero customs duties for qualifying goods

75% of auto content and components manufactured in one of the USMCA countries, and 40-50% of auto content made by workers earning at least $16 per hour 


Even though a certification of origin may not be required for the above categories of goods to claim USMCA/T-MEC/CUSMA, it is still an importer's legal responsibility to maintain all valid proof of origin when using free trade agreements. You must ensure that all goods that benefit from the preferential tariff treatment do, in fact qualify - origin applicability can be requested/required by the applicable customs during a verification. Declaring preferential duty rates without a valid proof of origin at the time of import can expose your company to substantial retroactive duties, interest and penalties. Where CUSMA declarations are made in error, importers are required to file amending entries (corrections) post clearance. The audit trail (records) for the proof of origin for trade agreements are to be retained for seven years: the year of the import/clearance plus an additional six years. 

*The agreement states that the value of the importation does not exceed USD $1,000 or the equivalent amount in the importing party's currency or any higher amount as the importing party may establish. 

**FedEx Trade Networks, when serving as Importer of Record (IOR), will require a certification statement on commercial invoices for shipments below USD $1,000. 

USMCA benefits

USMCA makes North American trade easier and addresses recent and emerging critical issues, including compliance of regulatory systems, e-commerce and the protection of intellectual property. When it comes to day-to-day shipping for FedEx customers, USMCA offers several advantages over NAFTA: 

  • The de minimis, or duty and tax exemption threshold, increases for imports into Canada and Mexico, potentially reducing overall shipping costs. 
  • Value limits increase, reducing the amount of documentation necessary 
  • Volumes of full clearance decrease, lowering costs and increasing efficiencies
  • Quicker clearance for more shipments will result in higher customer satisfaction 

Maintaining higher integrated North American supply chains will continue to benefit all three economies and make them more competitive around the world. 

 

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USMCA rules and benefits also apply to U.S. businesses that are Canadian non-resident importers. Learn more about becoming a non-resident importer. 

The new Certification of Origin

Requirements for Certification of Origin change with the new agreement. Here's what you need to know. 

Data elements

The new USMCA Certification of Origin is a set of 9 mandatory data elements and a statement. This information may be provided on any existing shipping document (e.g., commercial invoice) or on a separate stand-alone document, not in any particular order. They include two new elements. 

1. Indicate the certifier (importer, exporter, or producer) NEW 

2. Certifier name, address (including country) and contact             information NEW 

3. Exporter name, address and contact information (add if          different from certifier)

4. Producer name, address and contact information (add if          different from certifier)

5. Importer name, address and contact information (add if          different from certifier)

6. Description of goods 

7. HS tariff classification number 

8. Origin criterion 

9. Blanket period (date range up to 12 months) 

 

Certification of Origin 

We have prepared an easy to use fillable PDF Certification of Origin form to use as a stand-alone document. All of the required data elements are included. The certifier should fill it out, sign and date it and then either upload it using Electronic Trade Documents or print and apply it directly to the shipment. 

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Blanket certification 

The certification of origin can be applicable to a single shipment or can be a blanket certification for multiple shipments and be valid for up to 12 months. 

Blanket certifications currently being used for preferential tariff treatment under NAFTA will become invalid and expire on June 30, 2020. 

As of July 1, to continue use of a blanket certification of origin, a new document will be required. Contact your FedEx Account Executive to begin using a blanket certification of origin or to arrange for a replacement. 

Use of commercial invoices

The commercial invoice can be used as long as it contains the nine data elements and the required certification statement: 

"I certify that the goods described in this document qualify as originating and the information contained in this document is true and accurate. I assume responsibility for proving such representations and agree to maintain and present upon request or to make available during a verification visit, documentation necessary to support this certification." 

The certification statement for low value shipments is:

"I hereby certify that the goods covered by this shipment qualifies as an originating good for the purposes of preferential tariff treatment under USMCA/T-MEC/CUSMA." 

This statement can be included on the commercial invoice as long as shipment values fall below these thresholds: 

  • Equal to or less than USD $2,500 - Imports into the U.S. 
  • Equal to or less than USD $1,000 - Imports into Mexico   
  • Equal to or less than CAD $3,300 - Imports into Canada 
USMCA Commercial Invoice Image

Commodity restrictions 

There are no commodity restrictions specific to USMCA. The current commodities prohibited from import into the US, Mexico and Canada still apply:

  • Items prohibited by CBP (19 CFR Part 12, examples include threatened animal species, counterfeit money/coins and merchandise under economics sanctions.) 
  • Items prohibited by FedEx Express terms and conditions (examples include firearms, weaponry and parts, perishable foods, money, live animals, and items resembling a bomb.) 

Shipping with FedEx under USMCA

To be ship-ready when the new agreement takes effect July 1, 2020, reference the information under your automation platform below. You'll be able to easily prepare labels and Certificate of Origins and ensure your shipments benefit under USMCA/T-MEC/CUSMA. This section will be updated regularly, so check back often. 

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FedEx Ship Manager® (FSM) at fedex.com and FedEx Ship Manager® Lite

Beginning July 1, 2020: 

1. When USMCA Certification of Origin is required, follow the prompts to create shipping labels

2. Download and complete the USMCA/T-MEC/CUSMA Certification of Origin document online

3. Sign (electronic signatures accepted), and date the document

4. Upload the completed document using  Electronic Trade Documents  by selecting “attach additional trade documents”, or print and attach to your package

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FedEx Ship Manager® Software, FedEx Ship Manager® Server and ShipFast

Beginning July 1, 2020:

1. Dispose of the now invalid NAFTA Certificate document (prints automatically when auto generate is selected with shipping label)

2. Download and complete the USMCA/T-MEC/CUSMA Certification of Origin document online

3. Sign (electronic signatures accepted), and date the document

4. Upload the completed document using Electronic Trade Documents by selecting “attach additional trade documents”, or print and attach to your packages
 

Beginning with the 2020 FSMS General Release, FedEx will replace the NAFTA COO and generate the USMCA/T-MEC/CUSMA Certification of Origin document.

Beginning with the 2020 FSM General Release, FedEx will replace the NAFTA COO with an editable USMCA/T-MEC/CUSMA Certification of Origin document.

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FedEx Web Services

Beginning July 1, 2020:

1. Download and complete the USMCA/T-MEC/CUSMA Certification of Origin document online

2. Sign (electronic signatures accepted), and date the document

3. Upload the completed document using Electronic Trade Documents by selecting “attach additional trade documents”, or print and attach to your packages

Still using paper shipping labels and supporting documents?

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Ship online

Save time by using one of our automated shipping tools. 

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Upload customs paperwork online

Upload and submit trade documents using our Electronic Trade Documents solution. 

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Additional resources

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