The assessments of President Donald J. Trump’s first year in office have a recurring stormy theme, twisting and turning Washington D.C.’s status quo, metaphorically matching a year of once-in-a-generation natural disasters such as Hurricanes Irma and Harvey, wildfires and floods. These disruptive events were not limited to the U.S. domestic policy shorelines; indeed, global trade and mobility professionals experienced a year of hunkering down and riding out their own torrential storm – one with no relief in sight.

The 2018 weather pattern has its first sights set squarely on the North American Free Trade Agreement (“NAFTA” or “Agreement”), a comprehensive trade agreement entered into between the United States, Canada and Mexico, on January 1, 1994.The “tear-it up” rhetoric from the 2016 Presidential campaign trail followed into the Trump Administration’s first year, there were occasional pauses for comments ranging from “tweaks”, “modernization” “renovations”, and “rebalancing” trade. Presently, the scope of results extends from finding a “win-win-win” solution for the three countries to finding a political win for the President in order to prevent the U.S.’s unilateral withdrawal from the Agreement. While the focus to date has been on the impacts of a NAFTA withdrawal on trade in goods, the most significant economic harm will be the disruption of the North American services and workforce.

Background

The NAFTA created a preferential trading relationship between the parties and includes 22 Chapters addressing areas such as rules of origin, agriculture, government procurement and more. Chapter 16 entitled Temporary Entry for Business Persons, focuses on business immigration and the creation of a temporary NAFTA work visa category, designed to facilitate the movement of citizens of the United States, Canada and Mexico. Specifically, it defines permissible activities that can be engaged in by business travelers as outlined in Appendix 1603.A.1, or temporary professional worker visas as outlined in Appendix 1603.D.1 of Annex 1603 to Article 1603 of the NAFTA.

What impact does NAFTA have on U.S. immigration?

NAFTA impacts four nonimmigrant visa categories in the Immigration and Nationality Act (INA)[1] including: TN NAFTA professionals, E Treaty Trader and Investors; L-1 Intra-company transfers; and B-1 business visitors.

TN NAFTA Professionals

Following the entry into force on the NAFTA, the U.S. Congress added Section 214(e) of the INA to provide for the admission of Mexican and Canadian citizens to the United States who were coming to engage in professional activities. This was a necessary step to “activate” the NAFTA immigration provisions and create a TN nonimmigrant classification in the U.S. statutes. The TN classification permits qualified Canadian and Mexican citizens to seek temporary entry into the United States to engage in business activities at a professional level.

Notably, INA § 214(e)(2)[2] cross-references and refers directly to the NAFTA Appendix with respect to governing rules and procedures surrounding the TN nonimmigrant classification. While the INA provides the basic structure for the visa classification, the very existence and survival of the TN nonimmigrant classification is controlled by the Agreement. In short, there is no independent basis for a TN NAFTA visa should the President issue a Notice of Withdrawal from the NAFTA and the U.S. Congress roll-back the NAFTA implementing legislation.

Looking Ahead: What happens if there is a NAFTA withdrawal?

It follows that should the NAFTA no longer exist in U.S. legislation, human resource professionals will need to examine other options for their North American workforce needs. One widely discussed option is the United States-Canada Free Trade Agreement (CFTA) which became effective January 1, 1989, that included a Trade Canada (TC) class of professional nonimmigrants. However, unlike the NAFTA, it did not provide authority to create a visa classification under the INA and is entirely a creature of the agreement. Of greater significance, the CFTA was suspended when NAFTA entered into force. Specifically, the NAFTA Implementation Act, Section 107 (Termination or Suspension of United States-Canada Free-Trade Agreement), the CFTA implementing regulations “suspended” certain provisions of the CFTA while the U.S. and Canada remain parties to NAFTA. Also, certain CFTA provisions were “superseded.” While it is subject to dispute among legal authorities as to whether the CFTA could potentially “snap-back” into force after a withdrawal from the NAFTA, it is our view that this would require a presidential proclamation and, or, other action by Congress to return the agreement into force. Consequently, we do not view the CFTA as a reliable option.

The most likely scenario is that TN workers present in the U.S. at the time of NAFTA withdrawal, may possibly maintain their status through the expiration date of their TN visa assuming that the foreign national remains in the U.S. However, any returning workers may not be granted re-admission to the U.S. in TN status. Finally, any initial or renewal TN NAFTA applications may immediately cease to be accepted for processing at a U.S. Port-of-Entry. We therefore strongly recommend renewing any TN NAFTA visa if it becomes clear the NAFTA renegotiation is failing in order to extend the time.

Employers with E Treaty Trader/Investor workforce may also be at risk. E-1 Treaty Trade and E-2 Treaty Investor visas are for citizens of countries with which the United States maintains treaties of commerce and navigation. The treaty upon which a company can rely upon for E status is the NAFTA. If the U.S. withdraws from the NAFTA, Canadian and Mexican citizens maintaining E status may also be at risk, and susceptible to the same exclusions described above. However, if the U.S. falls back on the CFTA, or another treaty of commerce with Canada and Mexico, the E visa for Canadians and Mexicans may be preserved.

The L-1 Intracompany Transfer visa classification may not be hit as hard. The L-1 classification will not disappear, but the processing of L-1 Petitions at the U.S. Port-of-Entry for Canadian citizens may be eliminated.

Similarly, the B-1 business visitor classification will not disappear. However, the extended permissible business activities under the NAFTA may no longer be available.

Has immigration seen the worst of a Category 5 storm or is the worst yet to come? Only time will tell, but meanwhile, employers and foreign workers alike should continue to brace themselves during the torrent. And, hope that a new or modified agreement will preserve and improve the TN classification.