Mexican companies are increasingly looking "more north" to Canada with a huge opportunity created by the potential of duty free import. Even with the uncertainty of NAFTA/ CUSMA, Mexican shippers can benefit preferential treatment thanks to the newer CPTPP.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership presents newer free trade options for goods shipped Mexico from Canada that companies are considering in lieu of NAFTA.

Canadian duty free import is possible via either T-MEC CUSMA  or CPTPP for Mexican origin goods.

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The new NAFTA/ USMCA/ CUSMA/ T-MEC.

Disclaimer:   The information in this blog is for general information only.   Producers, shippers, exporters, importers should confirm their processes with their customs brokers, carriers and regulating authorities.

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CUSMA/ T-MEC:  Shipping Mexico to Canada duty free under $150 CAD

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 Mexico ship to Canadian customers.

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T-MEC CUSMA for direct order parcel shipments

While the North American Free Trade Agreement  is primarily written to accommodate major commodity trading - such as auto parts, energy, and agriculture - it now benefits for smaller direct online orders.

At Jet Worldwide, we encourage our customers to consider taking advantage of the preferential duty free treatment when goods qualify as Mexican origin.   

Good shipped to Canada that the qualify of Mexican origin that are valued under CA $3,300 can be cleared duty free with a simpler certification statement.

Here is a sample  statement that can be included on the commercial invoice requesting preferential tariff duty free treatment:

"I hereby certify that the good covered by this shipment qualifies as an originating good for purposes of preferential tariff treatment under the CUSMA/T-MEC."

Although the rules of origin can be complex, parcels shipped from Mexico often contain orders for goods that easily qualify as being Mexican origin. We advise Canadian companies to work with Canada customs CBSA to get a definitive determination prior to shipping as information presented in the blog is for general information only.

CUSMA T-MEC Shipping to Canada from Mexico

The key provisions of CUSMA T-MEC (i.e. new NAFTA) include:

  • Duty free and tax free entry for most Mexican parcels valued under CA$40
  • Duty free entry for most Mexican parcels valued under CA$150
  • Simplified "Certification of Origin" for shipments valued under CA$3,300

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Shipping Mexico duty free to Canada via CPTPP

The benefits CPTPP are starting to materialize and the benefits are increasingly being realized by Mexican and Canadian companies. Most experts agree that CPTPP provides easier administration and the certificate of origin rules are less burdensome than CUSMA.

The rules of origin in the CPTPP generally say your product must have between 30% and 40% regional value content, which is slightly more lenient than CUSMA.    

Only one method of preferential duty treatment (CPTPP vs CUSMA T-Mec) can be used at the time of importing to Canada or Mexico.   This must clearly noted on the supporting paperwork.

CPTPP Proof of origin statement:

The required proof of origin is referred to as a certification of origin and consists of a set of data elements contained in Annex 3-B of Chapter 3, that may be placed on any document. Additional information concerning the CPTPP certification of origin is contained in Article 3.20 of Chapter 3.

Proof of origin for Commercial Mexican goods:  Low Value Exeption

Commercial goods. Products valued less than US$1000 (equivalent in local currency)do not require a certification of origin to Mexico in order to  claim CPTPP preferential tariff treatment.  For qualifying Mexican origin goods to Canada,   the proof of origin / certificate of origin is waived.

The requirement on the importer to maintain records (for example, commercial invoice and B3) applies even if the CBSA does not require a certification of origin or if a requirement for a certification of origin has been waived.

Disclaimer:   The information in this blog is for general information only.   Producers, shippers, exporters, importers should confirm their processes with their customs brokers, carriers and regulating authorities.

Instead, only a signed statement completed by the importer, exporter or producer certifying that the goods originated from a CPTPP country, is required on the commercial invoice or any other supporting document.


CPTPP Proof of Origin for qualifying Mexican goods to Canada
In order to claim the preferential tariff treatment, a set a data elements referred to as a ‘certification origin’ must be provided by the exporter, producer or importer of the goods by adding the information to any document (e.g., Commercial Invoice) accompanying the shipment or if preferred, by providing it on a separate document. The data elements do not have to follow a prescribed format but must contain the minimum data elements listed below. In addition, the imported goods must originate and be exported from a CPTPP ratified country.

  1. Indicate the Certifier (Importer, Exporter or Producer)
  2. Name, Address and Contact Information of the Certifier
  3. Name, Address and Contact Information of the Exporter (if different from the certifier)
  4. Name, Address and Contact Information of the Producer (if different from the certifier, or exporter)
  5. Name, Address and Contact Information of the Importer
  6. Description and HS Tariff Classification for the Goods
  7. Origin Criterion for the Goods
  8. Blanket Period
  9. Authorized Signature and Date

Note: The certification of origin must be signed and dated by the Certifier and accompanied by the following statement:

“I certify that the goods described in this document qualify as originating and the information contained in this document is true and accurate. I assume responsibility for proving such representations and agree to maintain and present upon request or to make available during a verification visit, documentation necessary to support this certification”

DUTY FREE ≠ TAX FREE:

It is important to understand that free trade agreements CPTPP/CUSMA/T-MEC apply to duty assessments but not taxes.    All goods - even those cleared duty free - are subject to Mexican taxes (including 16% Value Added Tax)

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Disclaimer:  The information provided in the blog is for general information purposes only.   Importers,  exports producers and sellers are advised to check with their local authorities, customs broker and official websites prior to shipping.  

Written by Timothy Byrnes