The tariff preferences are benefits that allow you to apply a tariff or reduced, depending on the trade agreement and the goods to be eliminated in certain operations of international trade.
These benefits can be derived from treaties and trade agreements, and are subject to the fulfillment of specific conditions. For this reason, that a commodity coming from a country with which Mexico has a trade treaty does not automatically mean that you can have access to a tariff preferential.
To determine if a preference can be applied it is necessary to analyze factors such as tariff classification, the origin of the goods, rules of origin and the requirements set out in the relevant agreement.
What is a tariff preference?
A tariff preference is to award a tariff treatment more favourable to certain goods when they meet the conditions laid down in a treaty, agreement or business scheme applicable.
For example, a product could be subject normally to a specific tariff of import, but access to a lower rate if you qualify as a native of a country with which there is an agreement that provides that benefit.
This can directly influence the cost of an import operation.
How are the tariff preferences?
To apply a preference you must first identify if there is a trade agreement applicable between the countries involved, and if the goods are referred to within the established conditions.
Subsequently, it must be verified that the product complies with the applicable requirements.
Among the elements that may be involved are:
- Tariff classification of the goods.
- Country of origin.
- Rule of origin applicable.
- Treaty or trade agreement concerned.
- Documentation, or certification of origin required.
- Specific conditions established by the agreement.
Compliance must be analysed according to the goods and the corresponding operation.
What is the relationship between the tariff preferences and rules of origin?
The rules of origin to determine if a product may be considered to be native of a country according to the criteria established in a trade agreement.
This point is critical because purchase or receive goods from a country that participates in a treaty does not necessarily mean that the product is original in that territory.
Depending on the agreement and the product can be analyzed factors such as the materials used, manufacturing processes, changes in tariff classification or regional content.
When the goods meet the rule of origin and other applicable requirements, can be assessed by the application of the preferential tariff treatment provided.
What is the difference between tariff and tariff preference?
A tariff is a tax applied to the sale of certain goods in accordance with the relevant provisions.
A tariff preference set to a more favourable treatment with respect to the applicable rate when certain conditions are met.
Therefore, two operations with similar products may have tariff treatment differ depending on factors such as its origin and trade agreements applicable.
What benefits can have for a business?
To properly apply a tariff preference can reduce the cost associated with the import of certain goods.
In companies with operations or recurring large volumes, this difference can acquire greater relevance within the structure of costs.
Analysis of these benefits from the planning also allows you to:
- Evaluate suppliers and countries of supply.
- Compare import scenarios.
- Estimate costs more accurately.
- Identify opportunities arising from trade agreements.
- Improve the planning of international operations.
In this way, the tariff treatment may become a variable to consider within the decisions of foreign trade.
What do you need to apply a tariff preference?
The requirements depend on the treaty, merchandise and corresponding operation.
Before you apply a preferential treatment it is important to check the tariff classification, to determine the origin of the goods, check the rule of origin applicable and required documentation in accordance with the relevant agreement.
Incorrect application may generate differences in contributions and other consequences in accordance with the applicable provisions, so that the previous analysis is essential.
Tariff preferences and planning of foreign trade
Optimize an import is not only to find a fare for transportation more economical.
The origin of the goods, the trade agreements available, the rules of origin and tariff treatment may also influence the final cost of an operation.
In Core Global Logistics , we understand that a strategy of foreign trade starts from the planning, considering the different factors that can impact the movement of goods and coordinating logistics solutions tailored to the needs of each company.
To analyze the conditions of an operation before moving the load allows you to make more informed decisions and build a logistics strategy more efficient.