The North American Free Trade Agreement (New NAFTA, USMCA, T-MEC, CUSMA/ ACEUM) helps shipping to Canada and Mexico. It is especially helpful to e-commerce parcel shippers from Mexico and the USA.
Thanks to the USMCA/ CUSMA / T-Mec, securing suppliers and customers between Mexico, Canada and the USA has never been easier.
QUICK FACTS ABOUT MANUFACTURING SECTOR INTERDEPENDENCE IN NORTH AMERICAN COUNTRIES, ACCORDING TO THE NATIONAL MANUFACTURERS ASSOCIATION OF AMERICA:
- Canada and Mexico purchase 20% of the value of U.S. manufacturing output
- American and Mexican companies are looking North to Canada the benefit of online platforms.
- The agreement updates include provisions to facilitate e-commerce orders shipped from the US to Canada (most notably the de minimus values)
In this post, we review the follow benefits, features and limitations of the "new NAFTA:
- Shipping goods between Canada from the US and Mexico
- The many names of the New NAFTA free trade agreement
- New low value duty free thresholds to Canada and Mexico
- Certification of origin explained
- USMCA rules of origin
- Common import fees to Canada for goods shipped from the US and Mexico
- Additional resources
- About Jet Worldwide
Best Shipping Options between Canada, Mexico and USA
There are several shipping options available for sending goods in North America. The best option for you will depend on your specific needs and preferences, such as the type and size of the goods you are shipping, the speed of delivery you require, and your budget. Here are some common shipping options that you might consider:
- Air freight: This is the fastest shipping option with door to door integrated solutions.
- Road and Rail: This is a slower but more economical option for shipping full container load (FCL), full and partial truck load.
- Commercial carriers such as FedEx, DHL, UPS and their partners.
- Postal services are generally the best option for individuals shipping small shipments and personal items.
E-commerce Orders to Canada under USMCA
It is important to note to goods shipped from the USA and Mexico do not automatically benefit from duty free import. In many cases, USMCA give benefits for duty free import for goods valued under CA$150 (see below) only.
Shipped from ≠ country of origin
E-commerce orders from the US and Mexico valued over CA$150 are not automatically granted preferential duty free import to Canada. Goods can qualify for duty free import to Canada only if they were manufactured in the USA (and otherwise qualify as US or Mexican origin).
Different Names, one North American Free Trade agreement
- Updated NAFTA
- USMCA: The US insisted on a new name with the US being listed first
- T-MEC: Tratado entre México, Estados Unidos y Canadá (Mexican Spanish)
- CUSMA: Canada–United States–Mexico Agreement (English Canadian)
- ACEUM: Accord Canada–États-Unis–Mexique (French Canadian)
Read More: Country from where goods were shipped versus country of origin
The CUSMA facilitates the movement, release and clearance of good via a simplified framework and standardized customs procedures. Trade facilitations includes fewer clearance formalities for “express shipments” valued under CA$3,000 (to Canada) and US$2,500 (to the USA and Canada).
The origin‑certification process (that is no longer a prescribed form) is to include a set of data on the shipping paperwork (most commonly including on the invoice).
The data elements required at a minimum to claim origin underCUSMA:
- Importer/exporter or producer (indicate which is certifier)
- Name and address of certifier or
- Name and address of exporter or
- Name and address of producer
- Name and address of importer (if known)
- Description and harmonized system (HS) tariff classification of the good
- Specific origin of criteria
- Blanket period (certification is valid up to 12months in the case of multiple shipments of identical goods)
- Authorized signature and date
Check out the Canadian Border Services Agency (CBSA) page that describes the new requirements for more information and an example of a valid CUSMA certification of origin.
Benefit form having a certificate of origin
A certificate of origin used by Canadian customs to determine if preferential duty free import can be applied. The country of origin is also a data point used to support regulatory actions such as quarantine, import quotas, to ensure that the goods being imported comply with relevant regulations.
Read more: Understanding a certificate of origin.
Key provisions of CUSMA USMCA for parcels shipped courier include:
- Duty free and tax free entry for most US and Mexican parcels shipped courier valued under CA$40
- Duty free entry for most Mexican and US parcels shipped courier valued under CA$150
- Simplified "Certification of Origin" for shipments shipped courier valued under CA$3,300
For a shipments shipped via USPS for import via Canada Post, duty is assessed differently than for parcels shipped via parcel carriers/ courier:
- CA $20 (around US$14.75) and under: duty and tax free
- Above CA $20 duties and taxes apply
For professional insights, a comparison quote or "out of the box" solution, Contact Jet's logistics professionals.
Read in more depth about Canadian Import Fees.
Canadian duty free import from Mexico and the US is possible under the new NAFTA as well as the CPTPP Free Trade Agreement.
Note: We use the words USMCA, CUSMA and T-MEC interchangeably as they represent the same agreement.
READ MORE: IMPORT CUSTOMS DUTY EXPLAINED
New Certificate of origin updates of CUSMA
Shippers will benefit from new rules of CUSMA that replace the need for a separate Certificate of Origin with a "Certification of Origin" that can be more easily implemented into existing shipping documents such as the commercial invoice. This easier administrative aspect is already available for US shippers sending goods to Canada valued under CA$3,300.
CUSMA statement of origin for direct order parcel shipments to Canada, US and Mexico
For low value shipments (under CAD $3,300 to Canada) a certifying statement added to the commercial invoice or any shipping document
“I hereby certify that the goods covered by this shipment qualifies as an originating good for the purposes of preferential tariff treatment under USMCA/T-MEC/CUSMA.”
This statement can be included on the commercial invoice as long as shipment values fall below these thresholds:
- Equal to or less than CAD $3,300 for imports into Canada
- Equal to or less than USD $2,500 for importing to the U.S.
- Equal to or less than USD $1,000 for imports to Mexico
Contact Jet's Canadian Logistics team for LTL quote to Canada.
Shipping to Canada from the US via low cost express with customs entry included can be the best solution for US origin goods valued under $3,300 CAD with a CUSMA certification of origin statement.
Shipments valued at less than the above amounts do not require a NAFTA Certificate of Origin. Instead, the customer should type the following statement on the shipment's invoice:
"I hereby certify that the good covered by this shipment qualifies as an originating good for purposes of preferential tariff treatment under the NAFTA."
The certifying document must be completed in full by the exporter and be in the possession of the importer at the time of import (when the declaration is made). This document may also be completed voluntarily by the producer for use by the exporter.
Although the rules of origin can be complex, many parcels shipped from the US often contain orders for goods that qualify as being US origin. We advise Canadian companies to work with Canada customs CBSA to get a definitive determination prior to shipping. And American companies to do the same as, once the origin has been certified, the product becomes more attractive to Canadian companies.
Duty free for Shipments valued under $150 CAD from the USA to Canada!
As part of the USMCA (the "new NAFTA), Canada has raised their low value duty threshold ( de minimis threshold) to $150 CAD (around $110 USD). Local sales taxes will still apply (but often times, businesses can claim this charge back). This higher duty free threshold helps businesses and e-commerce merchants in the United States ship to Canadian customers.
Important note for USPS/ Mexican Post/ Canada Post Imports to Canada
There are different duty assessment for goods shipped via USPS versus Courier (as mentioned above).
For a shipments shipped via USPS for import via Canada Post, duty is assessed differently than for parcels shipped via parcel carriers/ courier:
- CA $20 (around US$14.75) and under: duty and tax free
- Above CA $20 duties and taxes apply
Common Canadian Import Fees for Shipments from the USA and Mexico
Duty: Items that do not otherwise qualify for preferential duty free import are assessed duty.
Canadian Sales Tax: Consignments imported to Canada are subject to both federal and provincial sales tax.
Entry preparation fee:This fee is included for most shipments sent via express courier to Canada but consignments that require non-standard entries may be subject to additional preparation fees.
Disbursement Fee:When duty and taxes are assessed, carriers charge a fee for prepayment of such fees prior to final delivery. This type of fee averages between 2-3% of the fees paid on behalf of the consignee with a minimum fee between CA$10-$20.
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