Focus on Free Trade

One of the more deceptively confusing fields on the NAFTA Certificate of Origin is Field 10 “Country of Origin,” the completion instructions for which read as follows:

Identify the name of the country (“MX” or “US” for agricultural and textile goods exported to Canada) to which the preferential rate of customs duty applies, as set out in Annex 302.2, in accordance with the Marking Rules, or in each Party’s schedule of tariff elimination.

For all other originating goods exported to Canada, indicate appropriately “MX” or “US” if the goods originate in that NAFTA country, within the meaning of the NAFTA Rules of Origin Regulations, and any subsequent processing in the other NAFTA country does not increase the transaction value of the goods by more than 7%; otherwise indicate as “JNT” for joint production.

The “marking rules” in this respect should not be confused with the NAFTA rules of origin. NAFTA rules of origin are used to determine whether or not a product has sufficient North American content to qualify for NAFTA tariff preference. A second set of rules, the “marking rules,” also known as the “non-preferential” rules of origin, are used to determine country of origin. Marking rules are based entirely on tariff-shifts — there are no value content requirements.

If an exporter or producer has qualified his/her products for NAFTA tariff preference based on production and inputs that originate in just one of the three NAFTA countries, then the country of origin in Field 10 would be the country in which the production has taken place.

However, if production has taken place in one or more NAFTA party, (for example, a good is assembled in Mexico, with inputs from the United States), then exporter/suppliers may need to refer to the “marking rules” in order to be able to fill out the country of origin field of the NAFTA Certificate of Origin.

For imports into Canada, the marking rules are used only to determine the tariff treatment for some agricultural and textile goods. For more information concerning the Canadian marking rules, please refer to CBSA Memorandum D11-3-1. Canada does not use the marking rules to determine the country of origin (tariff treatment) of any other goods.

For imports into Mexico, refer to the Acuerdo por el que se establecen reglas de marcado do pais de origen para determinar cuando una mercancia importada a territorio nacional se puede considerar una mercancía estadounidense o canadiense de conformidad con el Tratado de Libre Comercio de América del Norte.

For imports into the United States, the marking rules used to determine the country of origin are set forth in 19 CFR Part 102.