North American Free Trade Agreement (NAFTA) (Customs Glossary)

This article is part of the Customs Glossary Guide

The North American Free Trade Agreement (NAFTA) was a trade agreement between Canada, the United States, and Mexico. It came into force on January 1, 1994, and was replaced on July 1, 2020 by the Canada-United States-Mexico Agreement, known as CUSMA in Canada, USMCA in the United States, and T-MEC in Mexico.<ref name="gac">Global Affairs Canada: Canada-United States-Mexico Agreement</ref><ref name="cbp">CBP: United States-Mexico-Canada Agreement</ref>

For current shipments, carriers, importers, and brokers should use CUSMA/USMCA/T-MEC procedures rather than NAFTA procedures when claiming preferential treatment.

What NAFTA did

NAFTA created a regional trade framework for qualifying goods, services, and investment among Canada, the United States, and Mexico. For goods, its most practical customs effect was the reduction or elimination of duties on goods that qualified under NAFTA rules of origin.

NAFTA also helped establish many cross-border supply-chain practices that continued under CUSMA/USMCA, including origin documentation, preferential tariff treatment, and regional-content rules for some sectors.

Replacement by CUSMA/USMCA/T-MEC

NAFTA no longer applies to new preference claims. For qualifying goods moving after July 1, 2020, the relevant agreement is:

CUSMA in Canada;
USMCA in the United States; and
T-MEC in Mexico.

The new agreement kept the broad North American free-trade framework but changed several compliance details, including rules of origin for some goods and the origin-certification process.

Certificate of origin changes

Under NAFTA, many preference claims used a prescribed NAFTA certificate of origin form. Under CUSMA/USMCA, there is no single required certificate form; instead, the certification of origin must contain the required minimum data elements and may be provided on an invoice or another document.<ref name="cbp" />

If a shipper provides an old NAFTA certificate for a current shipment, the importer or broker should confirm whether a valid CUSMA/USMCA certification of origin is required. A carrier should not assume that a NAFTA certificate is acceptable for a post-July 1, 2020 preference claim.

BorderConnect usage

In BorderConnect and other customs software, the term NAFTA may still appear in historical documents, archived shipments, old training material, or customer paperwork. For current shipments, users should follow the broker's instructions and use the current CUSMA/USMCA/T-MEC documentation and tariff-treatment information supplied by the importer or broker.

Carriers should not decide origin eligibility on their own. Preferential treatment is normally handled by the importer and broker using the shipper's origin certification and supporting documentation.

References