Professionals Corner: Articles from Commercial Service Partners and Clients

Article 1

“3 New Free Trade Agreements,” Mike Allocca, President, Allocca Enterprises

Although it may seem like we have many Free Trade Agreements (FTA’s) in the US, we are actually behind some countries, like in the EU. Worldwide there are close to 400 regional and bilateral Free Trade Agreements. The US only has 12 FTA’s in force covering 18 countries, if you include next’s week’s most recent addition.

The US-Korea FTA will go into force March 15, 2012. The Columbia and Panama FTA have been approved and are waiting to be implemented. These are expected to be come into force this year, then making it 14 US -FTA’s covering 20 countries.

Something to be aware of in the 3 new FTA’s (Korea, Panama, Columbia);

1) They are voluntary and not every product is eligible (applies to all US-FTA’s).

2) Each FTA has their own specific rules of origin based on the products Harmonized Tariff Code which determines your products eligibility or not. (Applies to all US-FTA’s).

3) There are no certificates of origin or pre-set forms like we have with NAFTA. When it comes to declaring and documenting that your product is eligible for any of these three, it is either based on; the importers knowledge that the good is originating (eligible), including reasonable reliance on information in the importers possession that the good is an originating good OR a written or electronic certification by the importer, exporter or producer.

Since the “certification” need not be made in a prescribed format, as long as it contains, at a minimum, the following information:

a) The name of the certifying person, including as necessary contact or other identifying information

b) The importer of the good (if known) (S. Korea FTA only)

c) The exporter of the good (if different then the producer) (S. Korea FTA only)

d) The producer of the good (if known) (S. Korea FTA only)

e) Tariff classification under the Harmonized system and a description of the good

f) Information demonstrating that the good is originating

g) Date of the certification and

h) In the case of blanket certification, the period that the certification covers.

Currently only 3 of the existing US FTA’s require a certificate of origin (NAFTA, Israel and Jordan). The others do not, nor do the three new FTA’s. Just be sure NOT to allow any producers, exporters or importers to use a NAFTA certificate or any other FTA certificate for use with the new 3 FTA’s.

The full text of each FTA can be found at: www.export.gov/fta