Now that NAFTA negotiations are complete, it is time to review what every Canadian business needs to know about the updated trade agreement, known formally as the USMCA (United States-Mexico-Canada Agreement), but is more generally called "NAFTA2.0".
Status quo.Nothing changes until the governments of the three participating countries (Mexico, United States and Canada) approve the update.Canada and Mexico are expected to give a thumbs up, but U.S. approval rests on the results of the upcoming mid-term election (November6, 2018), which will determine whether the U.S. Congress is controlled by the pro-Trump Republicans or the anti-Trump Democrats, who may oppose the deal because they want to reverse anything done by the U.S. President.
Key points of interest:
Facilitating trade in goods:
The original NAFTA eliminated virtually all tariffs between Canada, the U.S. and Mexico, with very few exceptions. The USMCA maintains these benefits and ensures that the vast majority of USMCA trade will continue to be duty-free. Additionally, a new Customs Administration and Trade Facilitation Chapter, standardizes and modernizes customs procedures throughout North America to facilitate the free-flow of goods.
Automotive country of origin rules:
To qualify for zero tariffs, automobiles must have 75 percent (previously 62.5 percent) of their components manufactured in Mexico, the U.S. or Canada, including 70% North American steel and aluminum.
Labour provisions: By 2023, an increased percentage of automobile parts (40 to 45 percent) has to be made by workers who earn at least $16 an hour.
Canada has agreed to give U.S. farmers more access to the Canadian market, a key issue for Trump, in the form of tariff rate quotas for dairy, poultry and egg products.
New market access in the form of tariff rate quotas for refined sugar and sugar-containing products.
A modernized Committee on Agriculture Trade, which will provide a forum for Parties to address issues and trade barriers.
Obligations for agricultural biotechnology that will increase innovation, transparency and predictability.
Preserving the use of binational panels to resolve disputes on countervailing and anti-dumping duty matters, which is critically important to preserving market access outcomes and defending Canada’s interests in trade remedy cases.
Preserving the state-to-state dispute settlement process of the original agreement, and to improve elements of this process with respect to transparency and expediency.
The web. The digital economy, which did not exist when the first agreement was done, is covered with new provisions on products such as digitally recorded music and e-books.There are also new protections for internet companies.
Tariffs.The trade loophole that Trump used to impose steel and aluminum tariffs on Canada and Mexico remains, but a side agreement prohibits him from imposing auto tariffs, a key demand by Canada and Mexico. The Deputy Commerce Minister of Mexico has warned Mexico will not ratify the deal as long as the steel and aluminum tariffs are in place.
Duration. The new deal has to be extended every six years by all three countries and expires in 16 years
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
Time to renew NAFTA Blanket Certificates
Although NAFTA is being replaced with the new deal, USMCA, NAFTA Certificates of Origin will still be required until the new agreement takes effect (likely late 2019 or 2020).
Don’t forget to get your Blanket NAFTA Certificates of Origin renewed for 2019. Or simplify your life by taking advantage of our NAFTA Management Service, the fast, easy way to ensure your NAFTA Certificates of Origin are fully compliant.
This is important because significant AMPS (Administrative Monetary Penalty System) transactional penalties could apply if you make a claim for preferential treatment without a valid NAFTA Certificate.
Being in the global logistics business means our executives and senior managers need to get out of the office regularly to attend important industry and partner meetings. Most recently, we sent groups of employees to two key events:
Premier Cargo Alliance (PCA) Annual Conference. PCA is a top freight forwarder network with members in 85 countries across five continents. This year’s conference was held in Niagara Falls, Ontario from September 25-27, and Universal was the host and lead sponsor. Being in Canada this year presented an opportunity to have more of our people involved. "We had no fewer than 35 partner-to-partner meetings," said Chris Barnard, Vice President – Projects & Market Development, one of six executives and senior managers from Universal attending the conference. "Some were with existing partners, where we discussed ways to strengthen our existing trade lanes, and some were with new partners, who will help introduce us to new markets."
Canadian Society of Customs Brokers (CSCB) National Annual Conference. This year’s event, held in Puerto Vallarta, Mexico from September 29 – October 2, was attended by Michael Glionna, President and Mark Glionna, Vice President – Client Relations & Business Development. The theme was “A North American Perspective for Customs Brokers: Turning Expertise and Experience into Profit”, illustrating the steps customs brokers need to take to remain the key providers of information on trade policy and practice in an increasingly complexworld.
New regulations for shipments of food in Canada coming soon
In three months, many businesses will require a license when the Safe Food for Canadians Regulations (SFCR) come into force. In order to apply for a SFCR license, businesses will need to attest that they have preventive controls in place.
Food businesses can enrol now in My CFIA to apply for a licence, once licence applications are available. The Canadian Food Inspection Agency (CFIA) will not accept SFCR licence applications sent by email or fax.
Find out if your business will need a licence or be required to meet other SFCR requirements by January 15, 2019 by visiting the CFIA’s interactive tools and timelines. The CFIA has also created a new advanced search tool called the Guidance Finder, which lets users find information about SFCR requirements by specifying activity type, food commodity, method of production and document type.
If you currently hold a registration or licence issued under the Canada Agricultural Products Act, Fish Inspection Act, or Meat Inspection Act and it is expiring soon, continue your normal process to renew your registration, as needed. It will remain valid until it expires, provided there is a statement on it that it is also a licence issued under the Safe Food for Canadians Act. Once expired, you will be required to apply for a licence under the SFCR.
The CFIA has proposed a $250 fee for the SFCR licence. The fee amount will be confirmed prior to coming into force on January 15, 2019.
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
Raising our game to help the homeless
Our long-term support of
HockeyHelpstheHomeless (HHTH) is rising to an all-new level in 2018. We have established seven internal Universal fundraising teams, six teams will be comprised of employees, the seventh will be a corporate team, dubbed the Universal Canucks, created to promote donations from sources other than employees (i.e. vendors, partners, etc.). On the corporate level, we are helping out by being, for the second consecutive year, the official Game Day & Participant Gift Sponsor, plus we have agreed to make a matching donation for every dollar raised by our employee fundraising teams, to a maximum of $10,000.
Universal Logistics has supported the Hockey Helps the Homeless fantasy
hockey fundraiser for seven consecutive years and will do so again this year.
Everything began September 19 with a kick-off Lunch ‘N Learn event in our corporate head office, highlighted by presentations from HHTH and 360°kids, a local organization that gives a helping hand to homeless and underprivileged youth. We also distributed flyers and brought in our branch offices by videotaping the presentations.
Formed in 1996, HHTH is a Canadian registered charity, established to raise awareness and financial support for the homeless through education, fundraising, and partnering with local homeless support agencies. It is best known for running fantasy hockey tournaments across Canada. We are supporting the Markham event, where proceeds go directly to 360°kids, whose mission is to help youth overcome crisis and transition to a state of safety and stability. Across Canada, about 30,000 people are homeless on any given night.
“Our goal is to reach a new high for funds raised and, based on the enthusiasm I saw over the first month of our campaign, I am very confident that we will be successful,” said Michael Glionna, President – Universal Logistics.
Global Spotlight Quiz
How many clues do you need to name the world’s most northern megacity?
Where modules for space stations arebuilt.
Regularly named one of the most expensive cities in the world.
The total number of people who live in this city equals the entire population of Norway and Switzerland.
During the coldest months, up to 500 stray dogs live in the subway system and some ride the trains.
To avoid flooding, a river was diverted into a tunnel that runs under the city.
When the first McDonalds opened in 1990, the line to the restaurant ran for several kilometres.
Number 4 on the list of cities with most billionaires (69).
For more information about shipping freight to or from this city, contact Debbie McGuire, Manager – Freight Solutions.
Create a load plan to save time and money
Here is a quick, effective way to reduce transportation costs and minimize the time it takes to load a shipment: use cargo loading optimization software to build optimal load plans which assists in achieving the most effective arrangement of freight in a container or trailer.
Pardis Molaei, Ocean Imports
At Your Service: Pardis Molaei, OceanImports
An employee of Universal Logistics since the beginning of the year, Pardis Molaei has a solid understanding of both import and export freight shipments, qualifications that make her the ideal person to handle ocean imports (LCL/FCL/Consolidations) from all around the world.
Pardis can be reached by phone (905) 882-4880, ext. 269 or by email.
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