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Practice Areas

Industry Advisors Offer Recommendations for NAFTA Changes

Tuesday, March 07, 2017
Sandler, Travis & Rosenberg Trade Report

The Commercial Customs Operations Advisory Committee approved March 1 a number of recommendations to U.S. Customs and Border Protection on improvements to NAFTA. The U.S., Canada, and Mexico are expected to launch negotiations on updating the agreement within the next few months.

Advances from other FTAs. CBP should work with the Office of the U.S. Trade Representative and the private sector to review the text of more recent trade agreements to adopt modernized provisions, particularly in the areas of simplified rules of origin, importer self-certification, trade facilitation, enforcement, supply chain security, and non-tariff trade barriers.

Continuity in trade preferences. CBP should work with USTR and the private sector to ensure there is a continuity of trade preferences that provide a significant economic impact to U.S. workers and the long-term investments of U.S. companies, that tariffs and non-tariff barriers remain minimal, and that positive U.S. trade and investment persists with Canada and Mexico.

Consistency in implementation. To improve the consistency of NAFTA treatment to the same goods within the NAFTA region, CBP should work with Canada and Mexico to establish standardized processes in NAFTA trade preference qualification, consistent enforcement, and other applicable areas.

North American Single Window. CBP should work with Canada and Mexico to collaborate on cross-border data sharing and data harmonization and remove or modernize unnecessary regulatory barriers within North America through the use of a single window.

Regulatory cooperation. For products that are subject to partner government agency regulations, CBP should work with PGAs in the U.S., Canada, and Mexico to streamline and harmonize those regulations to create alignment in regards to documentation and data requirements, inspections, and enforcement.

E-commerce. CBP should work with USTR and the private sector to ensure that NAFTA reflects the need for modernized regulations affecting e-commerce, including in the areas of admissibility, targeting, and PGA regulations.

Small business. The U.S. has a de minimis value (i.e., the value at which companies pay no duties or tariffs) while Canada’s is $20 and Mexico’s is $50. CBP should work with Canada and Mexico to achieve a commercially significant de minimis level that reflects inflation and the modern reality of e-commerce.

Express delivery services. CBP should work with USTR to ensure that NAFTA includes modern provisions that specifically focus on the facilitation of EDS shipments and break down the barriers for all businesses, particularly small and medium-sized companies.

Trade facilitation. CBP should work with Canada and Mexico to utilize prior FTAs’ trade facilitation chapters as a baseline to create a high standard in trade facilitation, including stronger language for commitments to reach a commercially significant standard and deliverables for how modern borders should operate in the NAFTA region.

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