NAFTA Rules and MFN Harmonization

Dec. 12, 2003

On December 12, 2003, the United States Trade Representative ("USTR") published in the Federal Register a notification of an opportunity to submit proposals to consider certain changes for specific rules of origin under NAFTA. Specifically, the USTR will consider proposals regarding tariff harmonization and/or liberalization of those rules. The due date for the submission of proposals is February 6, 2004.

Changes to specific NAFTA rules of origin are provided for under the NAFTA Implementation Act, which authorizes the President to proclaim modifications to the NAFTA rules of origin. These modifications are subject to certain layover and consultation provisions. Previous modifications involved conforming rules of origin to classification changes, making them less restrictive, and making them less burdensome to administer. In addition to modifying the rules of origin, the three NAFTA parties are also currently considering harmonizing their MFN tariffs. This would eliminate the need for rule of origin requirements by setting certain MFN rates for certain tariff provisions at zero.