What are NAFTA originating materials?

NAFTA originating materials refer to parts, raw materials, and products that are sourced from the member countries of NAFTA (the United States, Canada, and Mexico). This designation is crucial for businesses that wish to take advantage of the preferential tariff rates that come with the agreement. Originating materials must undergo certain processes within these countries to qualify for these tariff benefits, ensuring that trade among them is encouraged and facilitated.

The definition emphasizes that these materials originate within the NAFTA region, which helps promote economic integration and support local production. Utilizing materials from within the NAFTA countries can reduce costs and streamline logistics due to the absence of tariffs on qualifying goods.