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CUSMA (Canada-United States-Mexico Agreement) (Customs Glossary)

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🔖 This article is part of the Customs Glossary Guide

USMCA / CUSMA / T-MEC

The modernized free trade agreement between the United States, Mexico, and Canada that replaced NAFTA.

Overview

File:USMCA-CUSMA-TMEC-Flags.jpg
The agreement has different acronyms in each member country.

The United States-Mexico-Canada Agreement (USMCA) is a trilateral free trade agreement that modernized the 25-year-old NAFTA. It entered into force on July 1, 2020, governing the vast majority of trade between the three nations.

Naming Conventions: The agreement is referred to differently in each jurisdiction:

  • United States: USMCA (United States-Mexico-Canada Agreement)
  • Canada: CUSMA (Canada-United States-Mexico Agreement)
  • Mexico: T-MEC (Tratado entre México, Estados Unidos y Canadá)

Sunset Clause: Unlike NAFTA, USMCA has a 16-year "sunset" clause. The three countries must meet every 6 years to review the agreement and decide whether to extend it.

Key Changes from NAFTA

While USMCA maintains the core duty-free status for qualifying goods, it introduced stricter rules of origin and new chapters on digital trade.

Sector Key Updates
Automotive

Regional Value Content (RVC): Raised to 75% (up from 62.5% in NAFTA).
Labor Value Content (LVC): Requires 40-45% of auto content be made by workers earning at least $16 USD/hour.
Steel & Aluminum: Requires 70% North American purchasing.

Dairy & Agriculture Increased U.S. access to the Canadian dairy market (up to 3.6%) and eliminated Canada's "Class 7" milk pricing system.
De Minimis (Courier) Raised the threshold for low-value shipments to facilitate e-commerce:

Canada: $150 CAD (Duty Free) / $40 CAD (Tax Free).
Mexico: $117 USD (Duty Free) / $50 USD (Tax Free).
USA: Remains at $800 USD.

Digital Trade Prohibits customs duties on digital products (e-books, music, software) and limits data localization requirements.

Certification of Origin

Under USMCA, the formal "Certificate of Origin" (CBP Form 434) was eliminated. It was replaced by a flexible Certification of Origin that can be placed on any document (e.g., Commercial Invoice) as long as it contains the 9 Minimum Data Elements.

The 9 Minimum Data Elements

  • 1. Importer, Exporter, or Producer: Who is making the certification?
  • 2. Certifier: Name, title, and contact info of the person certifying.
  • 3. Exporter: Name and contact info.
  • 4. Producer: Name and contact info.
  • 5. Importer: Name and contact info.
  • 6. Description & HS Code: Description and 6-digit Harmonized System code.
  • 7. Origin Criteria: The rule the good qualifies under (A, B, C, or D).
  • 8. Blanket Period: Date range (up to 12 months) if applicable.
  • 9. Signature & Date: Authorized signature and statement of truth.

Usage in BorderConnect

To claim preferential treatment under USMCA/CUSMA in BorderConnect, users must select the correct Tariff Treatment codes, as "NAFTA" codes are obsolete.

For Canadian Imports (ACI)

  • Tariff Code: Use Tariff Treatment 10 (United States Tariff) or Tariff Treatment 11 (Mexico Tariff).
  • Documents: Upload the "Certification of Origin" in the Document Storage tab.

For U.S. Imports (ACE)

  • SPI Code: The Special Program Indicator (SPI) for USMCA is "S" (Ordinary) or "S+" (Ag/Textile).
  • Replaces: Do not use "CA" or "MX" (the old NAFTA indicators).

Official Resources

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