Industry News
Special Alert: NAFTA 2001
TweetNovember 2000
The NAFTA rules requiring that Mexico limit the benefits it currently provides to maquiladora and Pitex operations are scheduled to come into effect January 1, 2001 and have some impact as early as November 20, 2000. This Special Alert provides general guidance on the changes.
- Under the current rule, goods entering a maquiladora or Pitex are not subject to customs duties if the goods are subsequently exported to another country.
- The new rule requires that when non-NAFTA originating materials are imported into a maquiladora or Pitex and subsequently exported to the U.S. or Canada, Mexico may only defer (or waive) the lesser of the duties that would have been owed to Mexico (if the material were imported for consumption) versus the duty owed to the U.S. or Canada.
- These changes affect all components and raw materials entering Mexico and then exported to the United States or Canada on or after January 1, 2001.
- For components and raw materials entering Mexico on or after November 20, 2000, the new rules are applicable only if the goods are exported to the United States or Canada on or after January 1, 2001.
- Components and raw materials imported in to Mexico on or after November 20, 2000 that are subsequently exported in a finished good to the U.S. or Canada prior to January 1, 2001, are not subject to the new duty deferral rules.
- There are three alternative scenarios:
| Part from Japan enters maquiladora | $10 duty if imported to Mexico | |
| Finished good made with Japanese part | ||
| Finished good exported to U.S. | $0 duty owed in U.S. | |
| Mexico may defer $0 ($0 is less than $10) | ||
| Duty liability to Mexico | $10 ($10 - $0) | |
| Total duty liability (U.S. + Mexico) | $10 | |
| Part from Japan enters maquiladora | $10 duty if imported to Mexico | |
| Finished good made with Japanese part | ||
| Finished good exported to U.S. | $15 duty owed in U.S. | |
| Mexico may defer $10 ($10 is less than $15) | ||
| Duty liability to Mexico | $0 ($10- $10) | |
| Duty liability to U.S. | $15 | |
| Total duty liability (U.S. + Mexico) | $15 | |
| Part from Japan enters maquiladora | $10 duty if imported to Mexico | |
| Finished good made with Japanese part | ||
| Finished good exported to U.S. | $5 duty owed in U.S. | |
| Mexico may defer $5 ($5 is less than $10) | ||
| Duty liability to Mexico | $5 ($10-5) | |
| Duty liability to U.S. | $5 | |
| Total duty liability (U.S. + Mexico) | $10 |
To protect industries that have historically benefitted from the maquiladora and Pitex programs. Mexico has introduced the Sectorial Program to provide approved companies is particular industrial sectors duty-free access to Mexico. There is a Sectorial Program for the following industries:
Automotive
Electrical
Electronics
Furniture
Toys and Games
Footwear
Mineral and Metals
Capital Goods
Photographic Goods
Agricultural Machinery
Miscellaneous Industries
SECOFI, the Mexican agency responsible for implementing these programs, has published an application to take part in the Sectorial Program. Information relating to the program and the application is available at the SECOFI site in Spanish. General information on maquiladora programs under the NAFTA is available from U.S. Customs. The text of NAFTA Article 303 is available here.
