Posted by Alex Jackson on August 11, 2017
There has been a lot of talk this year about updating the North American free trade agreement or NAFTA for short and one of the proposed changes could be a big win for US retailers. NAFTA is now 25 years old and when originally drafted it primarily ignored the concerns of ecommerce for a pretty good reason… there was no internet commerce in 1992! At least none to speak of its estimated that the web consisted of less than 30 websites at the time can you imagine that? Ecommerce has made an incredible impact that no one in 1992 could have foreseen. It has fundamentally changed the way we buy and trade, its importance cannot be ignored in any discussions of trade with other nations.
So what does this have to do with my eBay business well potentially a lot. One of the key revisions that the US is pushing for with NAFTA is an increase in the duty free import limits on ecommerce. As it currently stands these thresholds are set at $50 and $20 for Mexico and Canada respectively the US government would like these to be raised to $800. What does this mean to you? Well potentially a lot more customers in both Canada and Mexico. With $800 duty free import cap many of now wary consumers in both nations will have a big added incentive to shop with that US based sellers and potentially purchase more goods or higher dollar items.
Now this is by no means a done deal, yet both Canada and Mexico have pushed back hard on the proposal. Both fear it could undercut their domestic retailers and potentially open a backdoor floodgate of global mass produced merchandise pouring into Canada and Mexico via the United States. It’s safe to say that both countries are not so much concerned about made in the USA as they are made in china and shipped via the USA. Even if both nations refuse the $800 cap, it is almost a certainty that limit will be going up in the near future. With the levels set were they currently are, honestly any increase no matter how small would be a vast improvement.