The NAFTA customs regulations have been put into place in order to help ensure the process works smoothly.
Imagine: all of the forms, certifications, and other administrative confetti that accompanies travelling between countries. Now, triple that for otherwise simple transactions between three economies fashioned to coincide; it’s enough to render even those who aren’t merchants shudder. This is precisely why one of the main alterations applied by the ratification of NAFTA is uniform customs policies between the United States, Mexico, and Canada. As a result, verification, record keeping, and rules of origin are determined by NAFTA for all three countries so that there are no conflicts or confusion. Thus, not only are procedures now less strenuous, but the exporting process in general is more efficient.
Verification
Part of the exporting process is verification that persons can legally travel between country lines (usually in the form of passport, travel visa, or other form of verification often accompanied by paperwork) and that the goods being exported or imported can legally enter the country. Under NAFTA, this has been expedited to the effect that those exporting (or importing, but it’s not required by both) must simply apply for a Certificate of Origin. Once this process is completed, the exporter can legally transfer the goods with the benefit of NAFTA sanctions between the United States, Canada, or Mexico with no further need for verification.
NAFTA also grants the provision of temporary entry of business persons, whereby citizens of the three countries can travel freely between them as long as they meet one of five requirements:
- Engagements that are part of the sales or manufacturing process
- Those dispersed from parent companies that are conducting substantial trade within the country to which the business person is being dispersed
- Investors intent on committing a substantial investment within the target country
- Those transferring to another location of a parent company
- Those practicing in specific fields, including economists, attorneys, accountants, and architects, for example
Record Keeping
Along with settling disputes, the organization responsible for record keeping within North America is the NAFTA Secretariat. This renders the purpose of the Secretariat simpler, in that all operations will be expedited due to the fact that there would be no time expenditure constructing requests and procuring documentation, and it also establishes a presiding committee over the merged economies.
Rules of Origin
The Rules of Origin are what determine the viability of obtaining a Certificate of Origin. Rules of Origin ensure that a large enough proportion of a manufactured product originated and was constructed within the United States. Without conforming to Rules of Origin, one cannot obtain a Certificate of Origin, and without such a certificate, one cannot benefit from provisions offered by NAFTA.