Chapter 4 Of Nafta Agreement

A new rule in the USMCA specifically concerns products imported in assemblies and classified as such, following the application of Rule 3 of the General Rules of Interpretation of the Harmonized System. The USMCA provides that these goods are originating only if each product by volume is originating and the good and the goods meet all other applicable requirements of the USMCA Rules of Origin Chapter. However, if the value of all non-originating products by volume does not exceed 7% of the total value of the goods, the quantity of goods is considered originating.9 Recent trade agreements such as KORUS and TPP contain similar rules for products imported in sets. Frozen pork (HTS 02.03) is imported from Hungary into the United States and combined with spices imported from the Caribbean (HTS 09.07-09.10) and cereals grown and produced in the United States for the manufacture of pork sausages (HTS 16.01). General Note 12 to HTS 16.01 reads: “A change from heading 16.01 to 16.05 of any other chapter.” 1 Thus, the USMCA expressly provides that products resulting from aquaculture production in the territory of a Contracting Party are to be regarded there as `wholly obtained or produced`. 2 Using the net cost method, the VCI is calculated by subtracting the value of the non-originating materials from the total net cost of producing the good and draining that figure by the total net cost of the good.

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