USMCA Could Save Companies Millions, but Supply Chain Reviews Needed, Ujczo Says
Claims that NAFTA was ripped up or that it was just a rebranding are wrong and paying attention to the changes could mean big savings for businesses, said Dickinson Wright Cross-Border Practice Chair Dan Ujczo during a March 17 Global Chamber webinar. Ujczo said that one polymer and chemicals company he talked to saw that changes from NAFTA to the U.S.-Mexico-Canada Agreement “are going to save us $17 million.” He urged businesses that use NAFTA to convene their purchasing, accounting and either in-house customs teams or customs brokers to investigate their supply chains, because he predicted that CBP will pay closer attention to rules of origin, and he said many companies are relying on slapdash rules of origin certificates from suppliers (see 2002190028).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Not only do they need to examine their suppliers, but they should look at their suppliers' suppliers, and makes sure that items are properly classified, that valuations are right and that origin is accurate. “Engage in an independent customs self-assessment,” he advised. “Saying, 'We just let customs brokers do that' is not enough.”
Although Ujczo had thought a date of entry into force on Sept. 1 was more likely than a summer date, given that the Office of the U.S. Trade Representative is telling Congress it is shooting for June 1, he's now thinking June or July 1, even though he said it would be a miracle if uniform regulations were done by then. The text says the treaty cannot enter into force without uniform regulations, but he thinks it may happen anyway, because the administration says “this is good for the economy, it's a political win.”
“There's a lot of pushback on the Hill, [asking] how are we going to get uniform regs done, especially with COVID,” he said (see 2003160039). “There's going to be a lot of pushback from industry, because Customs isn't going to be ready June 1.”