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 Sunday to join the pact negotiated by Mexico and the United States 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.

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 L-1 procedures for certain Canadian applicants and imposed stricter interpretations of the TN Economist category.

Fragomen is closely monitoring the new trade agreement and will provide updates on ratification and implementation as new information becomes available.

This alert is for informational purposes only. If you have any questions, please contact the immigration professional with whom you work at Fragomen.