<![CDATA[
You most likely heard of NAFTA and the USMCA agreements. Chances are, you probably were wondering how these agreements affect the export and import of your goods. Here are the most frequent questions asked:



<ul><li>How do I know if my product qualifies for duty-free treatment?</li><li>What is “digitally traded property”?</li><li>How will this new rule benefit digitally traded property?</li></ul>



In this article, we will answer all the questions above and also, will give you more details about the new agreement – USMCA. So let’s start.



According to the Office of the United States Trade Representative, NAFTA ended on June 30, 2020. USMCA has replaced the NAFTA agreement. Companies that were under NAFTA need to make sure that their policies follow the terms of USMCA.



<ul><li>How do I know if my product qualifies for duty-free treatment?</li></ul>



As it was mentioned above, USMCA has replaced the NAFTA agreement, and here are the new export and import policies.



Duty-free treatment means that the shippers can send their products without paying duties or tariffs.



Under USMCA, Canada allows exports of goods up to CAD 150 to enter duty-free. The U.S., on another side, accepts goods up to $800 to enter without being charged. Mexico allows free shipments up to the equivalent level of USD 117.



If you are sending it to the U.S, here is what you should know. The U.S. tariff has 2 columns labeled “General” and “Special”. In the Canadian Tariff, the columns are “MFN Tariff” and “Applicable Preferential Tariffs”. If you’re sending a product and its rate is listed in the “General/MFN” column, then it is “free,” the duty rate is zero.



&nbsp;The Mexican tariff column is labeled “Tariff applied to rest of the world countries.” If the rate listed here is “Ex”, the duty rate is zero. All products categorized under these labels or tariff numbers are eligible for duty-free treatment.



•&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; What is “digitally traded property”?



Under NAFTA, there were no rules for the digital traded property.



In the USMCA agreement, digitally traded property means any e-commerce products and services both tangible and intangible. Tangible products are products that have a physical appearance and intangible are the products that can be perceived indirectly, such as e-books, music, movies, and so on.



Here are some measurements for the digitally traded property.



&nbsp;(ustr.gov, 2021).



<figure class="wp-block-image size-large"><img src="https://blog.shipvista.com/wp-content/uploads/2021/07/picture-1-1.png" alt="Image" class="wp-image-569"/></figure>



<ul><li>How will this new rule benefit digitally traded property?</li></ul>



The agreement exempts digital products from customs and other fees, while businesses can collect domestic taxes (such as GST/HST).



To sum up, USMCA makes export and import easier. It helps to protect e-commerce, intellectual property as well as agricultural products.



Reference



Ustr.gov, 2021. Retrieved from:



<a href="https://ustr.gov/sites/default/files/files/Press/fs/USMCA/USMCA-Digital_Trade.pdf">https://ustr.gov/sites/default/files/files/Press/fs/USMCA/USMCA-Digital_Trade.pdf</a>



Purolator.com. 2021. Retrieved from:



<figure class="wp-block-embed-wordpress wp-block-embed is-type-wp-embed is-provider-purolator"><div class="wp-block-embed__wrapper">
https://resources.purolator.com/understanding-the-usmca-agreement-your-top-questions-answered/
</div></figure>




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NAFTA and USMCA: Weighing the Impact

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