Canada and Mexico ready for new NAFTA implementation.

Canada and Mexico have notified the United States that they have completed their domestic ratification process of the Canada-United States-Mexico Agreement (CUSMA, the new NAFTA). It will now be up to the U.S. to notify Canada and Mexico of the completion of its domestic ratification process, to set the entry into force of the new agreement.

According to the text of the agreement, it will take effect on the first day of the third month after all three partners have notified the others they’ve changed their relevant laws, regulations and other administrative systems and are ready to comply.

In a statement to the press, Canada’s Deputy Prime Minister, Chrystia Freeland, said: “The Canadian government will continue to work with the United States and Mexican governments to determine an ‘entry into force’ date that is mutually beneficial. We want to ensure the new NAFTA will support a strong economic recovery once we have put the COVID-19 pandemic behind us – which we will. (…) With this step, I am hopeful that the new NAFTA will enter into force later this year.”

The CUSMA preferential tariff treatment will be based on satisfying the rules of origin requirements of the new agreement. For many goods there will be no difference between the NAFTA and CUSMA rules of origin.

Since only one agreement will apply at any given time (a before/after cut-off) it will not be possible for a NAFTA certificate of origin to be used when CUSMA comes into force.

It should be noted that the CUSMA somehow simplifies the certification of origin with respect to forms, process and information compared to the NAFTA certificate of origin.

For additional information see the CBSA’s Customs Notice 20-14 Implementation of the Canada – United States – Mexico Agreement (CUSMA)