Importing into the United States - Indo-American Chamber Of ...

Egypt and certain other countries have
accepted the ATA convention but have not
implemented the use of carnets. As countries
are being continuously added to the carnet
system, please check with the U.S. Council if a
country you wish to visit is not included in the
above list.
16. THE NORTH AMERICAN FREE TRADE
AGREEMENT (NAFTA)
The provisions of the North American
Free Trade Agreement were adopted by the
United States with enactment of the North
American Free Trade Agreement Implementation
Act of 1993 (107 Stat. 2057, Public Law
103-182). Nineteen CFR Parts 10, 12, 123, 134,
162, 174, 177, and 178 were amended and new
parts 102 and 181 of the Customs Regulations
were developed to implement the duty provisions
of the NAFTA.
The NAFTA eliminates tariffs on most
goods originating in Canada, Mexico, and the
United States over a maximum transition period
of 15 years. Under the schedule to eliminate
duties previously established in the
Canada-United States Free Trade Agreement,
goods originating in Canada have been free of
duty since 1998. For most Mexico-United States
and Canada-Mexico trade, the NAFTA will
either eliminate existing customs duties immediately
or phase them out in five to ten years. On a
few sensitive items, the Agreement will phase
out tariffs over 15 years. NAFTA-member countries
may agree to a faster phaseout of tariffs on
any goods.
During the transition period, rates of
duties will vary depending upon which
NAFTA country the goods were produced in.
That is, the NAFTA may grant Canadian goods
entering the United States a different NAFTA
rate than the same Mexican goods entering the
United States. For most goods imported into
Canada, there will be three NAFTA rates; the
rate depends on whether the goods are of U.S.
origin, Mexican origin or produced jointly with
U.S. and Mexican inputs.
Generally, tariffs will only be eliminated
on goods that “originate” as defined in Article
401 of the NAFTA. That is, transshipping goods
made in another country through Mexico or
Canada will not entitle them to preferential
NAFTA rates of duty. The NAFTA does provide
for reduced duties on some goods of Canada,
Mexico, and the United States that do not originate
there but that meet specified conditions
outlined in the Agreement. The NAFTA grants
benefits to a variety of goods that “originate”
in the region.
“Originating” is a term used to describe
those goods that meet the requirements of
Article 401 of the Agreement. Article 401 of the
Agreement defines “originating” in four ways:
■
■
■
Goods wholly obtained or produced
entirely in the NAFTA region;
Goods produced entirely in the NAFTA
region exclusively from originating materials;
Goods meeting a specific Annex 401 origin
rule;
■ Unassembled goods and goods classified
with their parts which do not meet the
Annex 401 rule of origin but contain 60
percent regional value content using the
transaction method (50 percent using the
net cost method.)
Goods that qualify as originating will lose
that status if they subsequently undergo any
operation outside the NAFTA region other than
unloading, reloading, or any other operation
necessary to preserve them in good condition
or to transport the goods to Canada, Mexico or
the United States.
ENTRY PROCEDURES
Existing entry procedures will continue to
be used under the NAFTA. As with other
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