The North American Free Trade Agreement (NAFTA) was negotiated among the United States, Mexico, and Canada and came into effect on January 1, 1994. It provides for the elimination of tariffs on most goods originating in the three countries over a maximum transition period of 15 years.
Tariffs will be eliminated only on goods that originate in one of the four ways defined in article 401 of the NAFTA:
- Goods wholly obtained or produced entirely in the NAFTA region
- Goods meeting a specific Annex 401 origin rule
- Goods produced entirely in the NAFTA region exclusively from originating materials
- Unassembled goods and goods whose content does not meet the Annex 401 rule of origin but contains NAFTA regional value of 60 percent according to the transaction value method or 50 percent according to the net-cost method
Article 502 of the NAFTA requires that importers base their claims of the country of origin on the exporters’ written certificate of origin, which may be the U.S.-approved certificate of origin, the Canadian certificate of origin, or the Mexican certificate of origin. The certificate may cover a single shipment, or it may be used as a blanket declaration for a period of 12 months. In either case, the certificate must be in the importer’s possession when the importer is making the claim.