United States, Canada and Mexico Reach Agreement on New Trade Pact; Labor Mobility Provisions Are Largely Unchanged

Print

By: Alexandra LaCombe, Fragomen, Del Rey, Bernsen & Loewy LLP

 

United States, Canada and Mexico Reach Agreement on New Trade Pact; Labor Mobility Provisions Are Largely Unchanged

At a glance

The labor mobility provisions of the United States-Mexico-Canada Agreement are expected to be implemented consistent with existing practices under NAFTA, though each country continues to have the authority to interpret the agreement with respect to the cross-border movement of businesspersons, professionals, intracompany transferees, traders and investors.

 A closer look

Canada, Mexico and the United States have reached agreement on a new trilateral trade pact to replace the North American Free Trade Agreement (NAFTA). The agreement will be known as the United States-Mexico-Canada Agreement, or USMCA.

The labor mobility provisions of the new pact – which ease the cross-border movement of businesspersons, certain professionals, intracompany transferees, traders and investors – are largely the same as those of NAFTA.  Canada’s agreement late on Sunday, September 30, 2018 to join the pact negotiated by Mexico and the United States earlier in September ensured that the mobility system established by NAFTA could continue.

What’s next for the USMCA

The leaders of the three countries are expected to sign the agreement within 60 days.  It must be ratified by the legislatures of the three countries before it can take effect.  Ratification is expected to take place in 2019.

What the revised agreement means for employers and foreign nationals

The three countries are expected to implement the labor mobility provisions of the USMCA consistent with existing practices under NAFTA.  Until the new agreement takes effect, the NAFTA mobility provisions are expected to remain in place without interruption.

This should put to rest the concerns of the U.S. employers that they are in danger of losing their Canadian and Mexican employees who hold the TN visa status.  The TN is a visa category under which citizens of Canada and Mexico have been able to work in the U.S. in certain specific professional categories which primarily require a Bachelor degree.  Many of these categories are in the STEM fields.

Each country maintains the authority to interpret the provisions of the USMCA, and country-specific policies and application procedures related to businesspersons, intracompany transferees, professionals, traders and investors cannot be ruled out.  For example, Canada currently requires intracompany transferees to be currently employed with a foreign subsidiary outside Canada, in addition to having been employed for one year within the previous three years for that entity.  The United States recently announced a pilot program to test new intracompany transferee procedures for certain Canadian applicants and imposed stricter interpretations of the TN Economist category.

If you need assistance with this, or any other immigration issue, please contact the author, Alexandra LaCombe, at (248) 649-5404 or alacombe@fragomen.com. Alexandra is a Member of the Legal Affairs Committee of Detroit SHRM and a partner at Fragomen Worldwide.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. October 2018.