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ARTICLE · 19 NOVEMBER 2018

USMCA – Impact On Digital Trade

Norton Rose Fulbright Canada LLP
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On September 30, 2018, Canada, Mexico, and the United States agreed to a trilateral trade agreement called the United States-Mexico-Canada Agreement (USMCA), which will replace

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Stephen Nattrass
Stephen Nattrass
Anthony De Fazekas
Anthony De Fazekas
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On September 30, 2018, Canada, Mexico, and the United States agreed to a trilateral trade agreement called the United States-Mexico-Canada Agreement (USMCA), which will replace the North American Free Trade Agreement (NAFTA) on January 1, 2020.

Signed in 1994, NAFTA did not include a chapter on the digital economy.

Below is a high-level summary of how the new digital economy chapter in USMCA will affect digital trade.

Customs on Digital Products

The USMCA will prohibit customs and other charges on digital products such as music, games, videos, and e-books. However, parties may continue to impose internal taxes or charges, such as HST, on digital products. While businesses will want to monitor amendments to domestic tax laws to determine the true cost of digital products they wish to import/export, they can now be assured of tax-free transfers across North American borders.

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About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

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