The new and much anticipated United States, Mexico and Canada Agreement (USMCA) replacing and modernizing the 25 year old North American Free Trade Agreement (NAFTA) has been in the headlines for a couple of years. The USMCA has officially made its debut after President Trump signed the trade deal into law on January 29, 2020. It is expected to become effective the spring of 2020 after ratification in Canada.
The most significant changes found in the USMCA include new laws on intellectual property and digital trade, as well as, updated chapters on financial services, labor and the environment. However, what is noticeably missing in the push for modernization are changes to the Immigration Chapter of the old NAFTA. Despite an attempt by Canada and Mexico to expand the TN Professions List and bring it into the 21st Century, the Immigration Chapter remains untouched and in desperate need of updating.
Even though no changes were made to the Immigration Chapter, immigration has not completely fallen off the radar for cross-border workers. The “Buy American and Hire American” Executive Order (BAHA) signed by President Trump on April 18, 2017 has widely impacted U.S. immigration generally, and more specifically with respect to the TN visa classification and processing of L-1 Intracompany Transfer Petitions by Canadian citizens at the U.S. Ports-of-Entry. Moreover, business travelers who seek admission to the U.S. for legitimate business purposes including meetings, sales calls, trade shows, installation and after-sales service, and after emergency repairs are subject to greater scrutiny given the broad contours of the Executive Order. The direct impact of BAHA has created a chilling effect on U.S. cross-border immigration. For example, there is increased scrutiny and harsher standards applied in the adjudication of work-sponsored petitions/applications filed on behalf of potential Canadian workers at the border.
Specifically, TN Professionals have been subject to increased scrutiny. The TN Professionals List in Appendix 1603.D.1. is antiquated and does not reflect changes in today’s advanced job market. The U.S. Customs and Border Protection (CBP) officers have been targeting various professional occupational categories on the list. The Economist category and related professions that may fall under this category have been an easy target. In addition, TN renewals have become more difficult especially for Canadian or Mexican citizens applying for TN classification under the Management Consultant category.
More recently CBP officers at the U.S. Ports-of-Entry have generally been refusing to adjudicate L-1 Intracompany Transferee “extension” petitions for Canadian citizens. Of course, technically CBP has never granted “extensions” of L status. A second application for L status by the same employer is a request for readmission in the same category (technical point but important). There is a limited exception from this new CBP position as to readmission application for intermittent L employees. Before a Canadian citizen had the option of processing an L-1 initial or readmission petition for the same employer at a U.S. Port-of-Entry, enabling them to become work authorized upon approval, and immediately cross the border to start work. This change in process by CBP leads to increased delays by forcing companies to file their petitions with U.S. Citizenship and Immigration Services (USCIS), which results in lengthy processing times and a heightened exposure to potential requests for additional evidence. Companies may pay an additional $1,440 for premium processing service to expedite a decision within 15 days from the USCIS. However, there still remains a good chance that a request for evidence will be issued, which further delays the approval process. As a result, the employment start date could be delayed by several weeks.
Business travelers are also victims of BAHA. CBP officers are increasingly denying entry to those business travelers (visitors), who are “close calls” in terms of travel for legitimate business activities. For example, business travelers who routinely need to meet with their U.S. based teams or customers are often questioned regarding the frequency of travel into the U.S. even if the business activity is permissible. This additional impact will add to greater unpredictability to cross-border operations that, in turn, will drain Canada-U.S. competitiveness.
Ironically, Canadian companies that now seek to expand into the U.S. and meet “Hire America” requirements, have increased immigration challenges moving their executives, managers, and specialized knowledge workers across the border, as well as using the E-2 Visa investor category, which is an excellent tool for expanding business operations into the U.S. Consequently, there are significant questions as to whether BAHA will actually Make America Great Again. Unfortunately, it will be Canada-U.S. companies that will be forced to answer that question.