In addition to the above rules of origin, there may be other ways to qualify your product:. Once you have determined that your product qualifies for NAFTA, read below section for how to declare that the product qualifies for preferential tariff treatment.
The issuer of a written declaration of origin is required to have it available, in addition to other supporting documentation used in demonstrating that the good qualifies as originating under the NAFTA rules of origin, for a period of FIVE years from the date of importation of the good for products going to Canada and for a period of TEN years from the date of importation of the good for products going to Mexico. In addition to the above rules of origin, there may be other ways to qualify your product: Accumulation may allow the producer to reduce the value of the non-originating materials used in the production of the good.
De Minimis allows the exporter to disregard a very small percentage of non-originating materials the do no meet a tariff shift rule. Fungible Goods and Materials refers to goods or materials components that are interchangeable for commercial purposes and whose properties are essentially identical.
Indirect Materials are goods used in the production, testing or inspection of a good but not physically incorporated into the good. In these cases, the exporter simply needs to make a written declaration on the commercial invoice stating that the product is NAFTA qualifying.
This new treaty — known as the United States-Mexico-Canada Agreement — still needs to be ratified for by every nation and will not go into effect for several more years. Under NAFTA, tariffs on imports and exports have been eliminated for products that are made in one of the three nations. NAFTA also grants most-favored-nation status, which means that all parties must receive equal treatment, including in foreign direct investment.
NAFTA also outlines the procedures required to resolve trade disputes. When the Mexican debt crisis broke out in , US president Clinton announced a multi-billion dollar aid plan and Mexico repaid the loan early. These cooperative efforts were perceived as necessary to preserve the NAFTA system and as such were instructive for future regional financial institutionalization.
In addition to financial cooperation, greater cooperation on regional energy, terrorism, health, emergency management, and a competition commission have all been developed since. As the size of cross-border transactions increases, actors lobby their governments for more regional cooperation to lock in their positions.
Similar forces are at work in many industries previously sheltered from international competition. The cumulative effect of these forces creates a demand for institutionalization. This offers poorer countries in Latin America an important path to development and support for national democratization. By gaining access to larger markets and opening economic and political institutions, development is also enhanced. However, without basic infrastructural development many countries in Latin America will still find it difficult to compete.
This indicates successful regional integration for poorer countries requires development funds similar to those the EU provided southern and eastern European countries. If the goal of Mexican president Vincente Fox of a common market is to be realized, fiscal transfers will have to precede the free movement of goods, services, and people in order to make it politically palatable. According to Fox: "Our forecast and our idea is to sell a long-term project where we can move upwards from a trade agreement to a community of nations agreement or a North American common market.
To move in that direction implies more than just trading, more than just facilitating the transit of merchandises, products, services, and capital. It has to imply the free flow of citizens, and it has to imply long-term monetary policies, maybe a common currency 20, 30, 40 years from now.
Should this path for NAFTA materialize, it is sure to influence the rest of the Western Hemisphere and further integration may depend on it. While there are many benefits of NAFTA, there are problems that pose challenges to the legitimacy of the regional experiment in North America. Further north in Canada, the main complaint is cultural domination by the United States and the loss of independent Canadian media firms. As with the freedom that democracy grants, costs and benefits are associated with regional cooperation.
Loss of independence is not necessarily a negative when it is replaced by a system of interdependence. A regional institutional demand is now being created by problems caused by NAFTA that demand resolution from affected persons. If regional democratic institutions do not arise to address these problems, there is a danger of dependence and domination which leads to undemocratic and unstable outcomes.
The day-to-day work of the FTC is carried out by expert working groups and committees. These powers are enforced annually at trilateral cabinet-level meetings as prescribed by Article , or in actions that review national court decision affecting North American Trade. The powers of the FTC can be characterized as technical, specific, and obligatory.
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