The North American Free Trade Agreement (NAFTA) came into effect in 1994, creating one of the world’s largest free trade zones and laying the foundations for strong economic growth and rising prosperity for Canada, the United States, and Mexico.
NAFTA and the Canadian Economy
Today NAFTA has a combined output of US$17.0 trillion across North America. The most popular exports to our US neighbours include: mineral oil, fuel, motor vehicles, machinery, wood, and electrical machinery.
The agreement helps provide Canadian businesses with better access to materials, technologies, investment capital, and talent available across the rest of North America. Helping to provide a real competitive advantage for Canadian businesses compared to Non-NAFTA suppliers.
Qualifying for NAFTA’s Preferential Rules
As part of the free trade agreement, Canada, the US and Mexico will receive favourable, if not duty free terms of trade. For the products to be classified as duty free by Customs, you will require a certificate of origin to confirm the product was made in a NAFTA country. This enables customs officials to quickly decide which goods qualify for these preferential tariffs and undergo only minimal processing.
In order to benefit from these rules it is important that you clearly outline the origin of the raw materials in your product. If you fail to do this, you risk your business being charged a penalty and your goods being charged duty at a later time. These duties can be up to 20% of the value of the goods.
