Textiles and apparel chapter summary
New rules in the Canada-United States-Mexico Agreement (CUSMA) will support Canada’s textile and apparel sector. The CUSMA rules of origin are the criteria used to determine whether a good has undergone sufficient production in the CUSMA region to be eligible for preferential tariff treatment. They ensure that the benefits of the agreement accrue primarily to producers located in the CUSMA countries.
CUSMA will include a new stand-alone chapter on rules of origin and origin procedures for textiles and apparel. This chapter will preserve the market access that Canada has to the U.S. and Mexican markets, including the tariff preference levels from which many Canadian producers benefit. The yarn-forward rules of origin, which are the foundation of the CUSMA rules of origin for textiles and apparel goods, have been maintained.
The CUSMA textiles and apparel chapter will also include unique enforcement provisions to effectively administer the rules of origin specific to the textiles and apparel industry. The chapter includes a streamlined approach to origin-verification visits and enhanced cooperation among the parties. The approach is designed to promote compliance and to allow the customs administrations to prevent fraudulent acts relative to this particular sector from going undetected. With these additional procedures to support the textile and apparel industry in North America, the parties are committing to work together in ensuring that only entitled goods within the region reap the benefits of the Agreement.
Technical summary of negotiated outcomes: Textiles and apparel
- Provides greater flexibility for producers that use small amounts of non-originating materials—a measure that will help such goods qualify for preferential treatment.
- Expands on an existing NAFTA provision to provide a special, facilitative pathway to origin for Indigenous textile and apparel goods.
- Maintains the yarn-forward rules of origin while relaxing the approach for niche, vegetable-based yarns and fabrics that are often sourced from outside the CUSMA region.
- Preserves existing trade under Canada’s tariff preference levels (TPLs), as revised volumes remain well above current utilization rates.
- Includes new measures designed to encourage the use of North American sewing thread, narrow elastics and pocketing fabric.
- Introduces measures designed to increase transparency associated with the administration and allocation of TPLs by all parties.
- Establishes a methodology to effectively administer the rules of origin specific to textile and apparel goods in a manner that is transparent and predictable for both the traders and the customs administrations.
- Provides for enhanced cooperation measures and procedures to address the additional challenges faced by the customs administrations in ensuring compliance in this sector.
- Specifically includes enhanced cooperation among the customs administrations, as well as a streamlined approach to origin verification visits.