New CUSMA video series for Canadian businesses
For many Canadian businesses, the first step in selling internationally is finding buyers in the United States. To help Canadians in their pursuits, Canada’s Trade Commissioner Service (TCS) has released a series of videos and other resources on the Canada-United States-Mexico Agreement (CUSMA) free trade agreement. Here’s what you need to know about the chapters on digital trade, rules and certification of origin and temporary entry of businesspersons within this multilateral agreement.
The Canada–United States–Mexico Agreement (CUSMA) (sometimes characterized as NAFTA 2.0) is celebrating its third anniversary since it came into force and to mark the event, Canada’s Trade Commissioner Service (TCS) has released a series of animated videos and infographics that explain the following three topics:
- Digital trade
- Rules and certification of origin
- Temporary entry of businesspersons
Developed in collaboration with Global Affairs Canada (GAC) and the Canada Border Services Agency (CBSA), these animations and infographics provide Canadian businesses more information about the benefits of CUSMA and key steps to take if they wish to export goods or services, temporarily work in the United States or Mexico, or to learn more about the Digital Trade chapter – a new addition compared to NAFTA.
CUSMA and Digital Trade
Digital trade refers to the wide range of e-commerce activities involving tangible and non-tangible products, which includes anything from basic e-commerce to streaming services.
As part of the digital trade chapter, CUSMA member countries have agreed to a set of rules that will facilitate economic growth and trade opportunities using the Internet, as well as address potential barriers to digital trade. These rules include, but are not limited to, commitments not to apply customs duties to digital products transmitted electronically, to protect personal information, and to cooperate on important security issues in electronic communications.
Under CUSMA, there are five regulated components of digital trade.
- Customs on digital products: Prohibit customs duties and other discriminatory measures from being applied to digital products distributed electronically (e-books, videos, music, software, games, etc.).
- Data localization laws: Data localization requirements are minimized.
- Civil liability for Internet platforms: Limits the civil liability of Internet platforms for third-party content that such platforms host or process, outside of the realm of intellectual property enforcement, thereby enhancing the economic viability of these engines of growth that depend on user interaction and user content.
- Cybersecurity, privacy, spam prevention, and consumer protection: Protection and cooperation while seeking to promote industry best practices to keep networks and services secure.
- Proprietary software: Limit governments’ ability to require disclosure of proprietary computer source code and algorithms, to better protect the competitiveness of digital suppliers.
The CUSMA digital trade chapter ensures that Canadian companies, including small and medium-sized enterprises, will be able to take advantage of expanding online commercial opportunities, while also seeking to continue ensuring an online environment that builds consumer confidence and trust.
Read the CUSMA digital trade chapter summary by Canada’s TCS to learn more.
CUSMA and Rules and Certification of Origin
The CUSMA rules of origin are a set of criteria that describe the level of production that needs to be done to a good in North America for it to be eligible for preferential tariffs. For example, it may need to be grown or harvested in North America or assembled from imported parts or have a certain amount of North American value added.
Unlike NAFTA, there is no determined format. With CUSMA, the certification process is simplified as only a set of elements are required, indicating that the good meets the rules of origin, which may be placed on an invoice or any other document. According to the CBSA, elements to certify the origin include:
- Identification and address of the certifier including whether the certifier is the exporter, producer, or importer of the good, the certifier’s name, title, address (including country), telephone number, and e-mail address.
- Exporter name, address (including country), email address, and telephone number if different from the certifier.
- Producer name, address (including country), email address, and telephone number if different from the certifier or exporter.
- Importer name, address, email address, and telephone number.
- Description and HS classification of the good to the 6-digit level. The description of the good should be sufficient to relate it to the good covered by the certification.
- The rule of origin under which the good qualifies, as set out in Article 4.2 (Originating Goods). Please see CUSMA Chapter 4 (Rules of Origin).
- Signed statement by the certifier.
The CUSMA origin procedures better support today’s trade environment and limit the administration costs by providing for electronic processes, increasing trader participation in certification and verification, providing a simpler means by which to certify the origin of the good, and enhancing cooperation amongst the customs administrations in the application of the rules of origin.
Read the CUSMA origin procedure chapter summary by Canada’s TCS and Certifying the origin of goods by the CBSA to learn more.
CUSMA and Temporary Entry of Businesspersons
Temporary entry commitments have supported economic growth and development, ensure that investors can see their investments first-hand and get a feel for the local environment and allows service suppliers have greater certainty that they will be able to enter the market to fulfill contracts on-site.
The modernized temporary entry chapter maintains the market access commitments negotiated under the original NAFTA agreement. It also removes obstacles encountered at the border and facilitate temporary travel and relocation for Canadian, American and Mexican business visitors, professionals, traders/investors and intra-company transferees.
The temporary entry provisions do not remove the requirement to obtain a work permit, but they do waive the need for a Labour Market Impact Assessment or equivalent requirement, helping level the playing field across North America.
Read the CUSMA temporary entry chapter summary by Canada’s TCS to learn more.
If you have questions or comments about CUSMA agreement, contact Global Affairs Canada at [email protected] or ask a trade commissioner.
If you are looking to sell to the United States Department of Defense or to other government customers around the world, talk to CCC about how we can support your bid and export goals.
This post was last updated on July 26, 2023.
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