Canada passes CUSMA implementation legislation—no ratification yet

Special Notice: Trade attorneys have confirmed the Canada-U.S.-Mexico Agreement will enter into force on July 1, 2020. 

Canada rushed through a deal to pass implementation legislation for the CUSMA (Canada-U.S.-Mexico) trade agreement on March 13, 2020 before suspending parliament to help curb the spread of coronavirus.

Canada is the last of the three countries to sign the pact, and is progressing toward completing the ratification process. However, Canada's executive branch, the federal cabinet, still needs to ratify the pact.

The Trump administration was pushing for a June 1st implementation date, but it doesn't look as though that will be possible.

Ratifying the agreement

In order to proceed with the White House's preferred timeline, all three partners needed to notify each other that they had finished their respective ratification processes and were ready to comply with the new agreement.

Canada is working with the U.S. and Mexico on uniform, trilateral regulations which are required before the agreement can enter into force for all three countries.

The text of the Canada–U.S.–Mexico Agreement (CUSMA) says it will take effect on the first day of the third month after the final country completes their respective ratification processes and are ready to comply with the new agreement. 

Concerns over CUSMA timelines

At this time, there are a lot of questions about whether businesses have the information they need to adjust to the new rules.

Ideally, entry into force would only happen after all necessary regulations are in place and industries have had an opportunity to understand and implement them effectively.

Coronavirus and its widespread impacts are affecting the timeline of the new trade agreement.

However, even without the pandemic, implementing CUSMA requires changes to how Customs is administered. Coronavirus concerns are superseding efforts to prepare IT systems at the border in advance of the new trade pact.

So, while the new agreement is progressing, albeit slowly, there are still many more questions than answers at this time. We will continue to update you as new information becomes available.

Resources for importers

In the meantime, get up to speed on the new agreement and how it will impact importers. Here are some good resources:

1. The Government of Canada’s website, including the full-text of the agreement, highlights, and news. Please refer back to the site regularly as timelines are in flux. Please note that the current NAFTA agreement, along with all its protocols and requirements, is still currently in effect.
2. The new agreement will represent changes to the currently-used NATFA certificate of origin. Please review our recent post to learn more.
3. Read our other blog posts about the agreement, including information on the automotive and agriculture industries.
4. And our most comprehensive post on the details of the agreement here.

More information will be available in the coming months as we move closer to implementation of the new CUSMA trade agreement. Our customs consultants are here to answer any questions you might have about the requirements and impacts of the new trade deal and how its implementation will affect you.

Information provided by: NAFTA & Free Trade Dept. - Cole International

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