1 For example, the USMCA expressly provides that goods obtained from aquaculture production in the territory of a Contracting Party are deemed to be “wholly obtained or produced there”. 2 Using the net cost method, the TRC is calculated by subtracting the value of non-originating materials from the total net cost of manufacturing the goods and dividing them by the total net cost of the goods. 3 Under the transaction value method, the CVR is calculated by subtracting the value of non-originating materials from the transaction value of the goods and dividing them by the total transaction value of the goods. 4 For the purposes of this provision, the transaction value shall be adjusted to exclude any cost of international shipment of the goods. 5 If such a good is also subject to a CVR requirement, the value of the non-originating de minimis material must be included in the value of the non-originating material for the applicable CVR requirement. 6 For the purposes of this provision, the transaction value shall be adjusted to exclude all costs incurred in the international shipment of the goods. 7 A “recovered material” is defined as a material in the form of one or more individual parts resulting from: (a) the dismantling of a used product into individual parts; and (b) cleaning, inspection, testing or any other treatment of such parts, to the extent necessary to improve perfect operating conditions. 8 A product falling within Chapters 84 to 90 or subheading 94.02 of the HS, with the exception of goods falling within heading Nos 84.18, 85.09, 85.10 and 85.16, 87.03 or subheadings 8414.51, 8450.11, 8450.12, 8508.11 and 8517.11, which consist wholly or partly of reconstituted substances and (a) have a similar lifespan and, when new, have the same or similar performance as such a product; and (b) has a factory warranty similar to that applicable to such goods if they are new. 9 The value of non-originating goods in quantity and the value of quantity must be calculated in the same manner as the value of non-originating materials and the value of the goods. 10 Automotive products are subject to the new product-specific rules of origin set out in an annex to Appendix 4-B to the USMCA. 11 The USMCA provides that any product referred to in Chapter 27 is considered to be originating if it is the product of a chemical reaction that took place in the territory of one or more Contracting Parties (that is, the `chemical reaction rule`). NAFTA did not include this option.
Alternatively, goods classified in Chapter 27 retain the possibility of being classified as originating by changing the tariff classification. 12 The USMCA allows any product classified in Chapters 28 to 38 to be considered originating if it complies with one or more of the eight new rules under which specific production processes taking place in the region are sufficient to confer origin (with a few exceptions): (1) the chemical reaction rule; (2) the cleaning rule; (3) the rule applicable to mixtures and mixtures; (4) the particle size modification rule; (5) the standards relating to materials; (6) the isomer separation rule; (7) the rule prohibiting separation; and (8) the rule applicable to biotechnological processes. Alternatively, goods classified in Chapters 28 to 38 retain the possibility of being considered as originating goods by a tariff change and/or regional value requirement, although some of these specific requirements have also changed from NAFTA. 13 The USMCA allows any product classified in Chapters 39 to 40 to be considered originating if it complies with one or more of the seven new rules under which specific production processes taking place in the region are sufficient to confer origin (with a few exceptions): (1) the chemical reaction rule; (2) the cleaning rule; (3) the rule applicable to mixtures and mixtures; (4) the particle size modification rule; (5) the standards relating to materials; (6) the isomer separation rule; and (7) the rule applicable to biotechnological processes. On the other hand, goods classified in Chapters 39 to 40 retain the possibility of qualifying under a tariff change or regional value content requirement, although some of these specific requirements have also changed from NAFTA. 14 The USMCA defines textile and clothing products as falling within those chapters. The specific rules of origin for textile and apparel products should be read in conjunction with Chapter 6 of the USMCA (Textiles and Apparel), which amends some aspects of the NAFTA rules of origin for textiles, but these changes may not affect all textile and apparel products. For example, the USMCA requires that certain specific components of a garment be of origin in order for the finished garment to be considered originating. For certain goods, the USMCA also modifies nafta tariff preferences (which allow certain quantities of non-originating yarn, fabrics, clothing and textiles to receive NAFTA customs treatment if they have been processed in one or more NAFTA countries). .