The North American Free Trade Agreement (NAFTA), implemented in 1994, created the world’s largest free trade area, stimulating exports between the U.S., Canada, and Mexico by eliminating tariffs and creating international rights for business investors. NAFTA ultimately produced sales of $17 trillion, establishing a model that was adopted globally. For new members, however, managing the red tape can be daunting and potentially risky.

To take advantage of the reduced duties afforded by NAFTA and other free trade agreements, exporters and importers have to verify the eligibility of their products. The qualification process involves classifying products via the Harmonized Classification System and NAFTA rules of origin. Each of the three partner governments may audit an importer, exporter, or producer of NAFTA products in any of thee three member countries, and hefty fines are levied on non-compliant manufacturers or distributors.

Although posted in April 2008, Supply Chain Digest has a good article for anyone planning a Trade Compliance implementation: Five Surprises from a Trade Compliance Application. Most trade compliance experts know what they want to achieve with a new solution – but this article does a good job identifying some critical applications to efficiently maintain a system:

• Data Archiving Tools
• Data Processing Reports
• Automated Compliance Updates
• Product Classification Tools