Effective June 15, 2005 Certain NAFTA Rules of Origin Modifications Take Effect for Goods of Mexico
On February 9, 2005, President Bush issued Proclamation 7870 in order to modify the North American Free Trade Agreement (NAFTA) rules of origin for certain products.
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The modifications made by Proclamation 7870 were made effective with respect to goods of Canada that are entered, or withdrawn from warehouse, for consumption on or after January 1, 2005.
However, Proclamation 7870 stated that for goods of Mexico, the modifications would be effective on or after a date to be announced in the Federal Register by the U.S. Trade Representative (USTR).
Proclamation 7870 Changes Are Effective June 15, 2005 for Mexican Goods
The USTR has issued a notice announcing that the effective date for the modifications for goods of Mexico is June 15, 2005. 1
According to the USTR, on May 3, 2005, the government of Mexico obtained the necessary authorization to implement the rule of origin changes with respect to qualifying goods entering from the U.S. Subsequently, officials from the governments of Mexico and the U.S. agreed to implement these changes with respect to each other's eligible goods, effective June 15, 20051.
Overview of NAFTA Rules of Origin Modifications
According to a January 2005 notice issued by the Canadian government on these NAFTA rules of origin modifications, the modifications are applicable to the following:
Tea and spices (Chapters 9 and 12). The new rules allow tea that is fermented and/or that is packaged in the NAFTA territory to satisfy the rule of origin. The rules also allow the crushing or grinding in the NAFTA territory of certain non-originating spices such as pepper, cinnamon, cloves, nutmeg, ginger, turmeric, and dill seeds to confer origin.
Carrageenan (Chapter 13). The new rule allows originating carrageenan (food thickener) to be blended with specified quantities of non-originating carrageenan without losing its originating status.
Seasonings (Chapter 21). The new rule of origin allows mixed condiments or seasonings containing non-originating ingredients classified in Chapter 21 to qualify as originating.
Precious metals (Chapter 71). The new rules allow the use of non-originating unrefined precious metals and secondary precious metals in the production of originating precious metals.
Speed drive controllers and their printed circuit assemblies (Chapter 85). The new rule of origin allows speed drive controllers made with non-originating printed circuit assemblies to qualify as originating; the printed circuit assemblies will be subject to a less onerous tariff change rule.
Household appliances (Chapters 84 and 85). Under these rules, products like personal fans, food mixers, heaters, hair dryers, microwave ovens, coffee makers and toasters no longer have to satisfy a regional value content requirement.
Loudspeakers (Chapter 85). The new rule reduces the regional value content requirement level and allows the use of a broader range of non-originating components provided the regional value content is met.
Parts for various machinery (Chapters 84, 85, and 90). In consideration that some parts used to make parts designated for specified equipment or machinery are not separately provided for under different classification provisions, these rules remove the limits on the type of non-originating inputs that can be used provided the regional value content is met.
Thermostats (Chapter 90). The modification allows for the use of a broader range of non-originating components provided the regional value content is met.
Toys (Chapter 95). The modification allows for the use of a broader range of non-originating components if the toys satisfy the regional value content requirement.
1 BP is checking on whether this June 15, 2005 effective date is by "date of entry, or withdrawal from warehouse, for consumption," and will update readers with new information when available.
(See ITT's Online Archives or 02/17/05 news, 05021705, for BP summary of Proclamation 7870 which specifically modified the tariff classification rules (TCRs) in HTS General Note 12(t), the ITC's report on the probable effects of such modifications, and Canada's January 2005 notice on the modifications.)
USTR contact - Kent Shigetomi (202) 395-3412
USTR notice (FR Pub 06/28/05) available at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-12586.pdf
Canadian notice (dated 01/11/05) available at http://www.dfait-maeci.gc.ca/nafta-alena/amendment-401-en.asp