The topic of immigration is low on the list at the ongoing NAFTA negotiations, as the US, Canada, and Mexico struggle to keep the treaty above water.
“Immigration is not even on the radar at the negotiations,” said Daniel Ujczo, Of Counsel and Cross-Border Business Development Director at Dickinson Wright PLLC.
“All of the focus is on the issues that the US has put on the table, such as automotive, agriculture, government procurement, and dispute resolution. At this stage in the game, both Canada and Mexico are hesitant to even raise the topic of immigration – everybody is just fighting for their lives to keep what is already in place.”
According to Ujczo – who has attended all NAFTA negotiations so far – both Canada and Mexico have put forth proposals to discuss TN visas and worker mobility in North America. However, at the time of publishing, the US has not counter-proposed anything, and it will reportedly not discuss immigration issues connected to NAFTA, because it doesn’t have congressional authority.
“Immigration was covered in the original NAFTA, so if you’re renegotiating or modernizing it I think there is implicit, if not explicit authority to do that,” said Ujczo. “As of right now, I don’t expect to see any significant progress on the TN visa through these negotiations, which to me is the biggest miss, because the movement of talent is the most important issue companies are facing.”
What Impact is This Having on Mexican and Canadian Visa Holders?
NAFTA impacts four non-immigrant visa categories: TN NAFTA professionals, E Treaty Trader and Investors, L-1 Intra-company transfers, and B-1 business visitors. The number of NAFTA foreign workers currently working in the US is estimated at around 100,000.
The NAFTA Professional (TN) visa specifically is a temporary, three-year work permit for citizens of Canada, Mexico, and the US. The visa, which can be renewed indefinitely, allows qualified workers from each country to reside in the US, along with their spouses and children.
Companies in the tech industry love the TN visa program, because it both expands the pool of eligible talent and keeps salaries low. But with the NAFTA in dispute, there is a risk that those advantages will be lost.
“If the NAFTA goes away, the TN visas go away – there is no independent basis for a TN visa outside of the NAFTA,” said Ujczo. “Some immigration lawyers might say that it’s in the statute, but if you take a deep dive into US immigration law, all it does is refer back to the NAFTA. Quite simply: no NAFTA, no TN visa.”
If the worst was to happen, there are ways to limit the damage of a NAFTA withdrawal on TN visa holders.
If the likelihood of a withdrawal increases, companies should renew as many TN visas as possible as soon as they can, because the US will most likely treat them as valid contracts, meaning that TN visa holders can serve the remainder of their authorized term. This will give employees much more time to deal with any relocation fallout and other issues stemming from a NAFTA withdrawal.
“If the President does press the button on withdrawal, it will create, at the very least, chaos at the border,” said Ujczo. “There will be significant disruptive impact beyond just tariffs though a NAFTA withdrawal, and I would put immigration at the top of that list.”
Outdated and in Need of Refreshing
For the TN visa, specifically, the list of applicable occupations hasn’t been updated since the NAFTA came into force. The categories that could apply to the tech industry, in particular, are Engineer, Scientist, Technical Publications Writer, Graphic Designer, Computer Systems Analyst, and Management Consultant, all of which are fairly broad in their requirements.
This has resulted in companies and lawyers having to “fit square pegs into round holes”, just to adhere to the outdated guidelines.
“The government is very rigid in its classification system, so sometimes you have to slightly alter the job description to fit the outdated classifications,” said Sung Hae Kim, VP of People Operations at Wizeline, a nearshore IT services company based in both Silicon Valley and Mexico.
“New roles are being created in tech all the time, and the people at the immigration offices understand that the classifications are outdated. In fact, we often help them out by explaining what the jobs entail – they are not there to catch us out.”
Wizeline is bringing five engineers into the US form Mexico this year, all under the TN visa program. The company is also looking into hiring DACA workers in the Bay Area, offering a route for them to work in the US permanently.
“People on the TN visas ultimately want to get a green card, so we provide the legal services to help them do that,” said Kim. “Ultimately, if NAFTA goes away, we would have to treat talent in Mexico like we do with people in any other country, as well as continuing to attract international people to Mexico as another alternative.”
Alternative Routes for Importing Talent Under Threat
For many tech companies, one of the workarounds for the broken TN system has been the E Visa. The E1 and E2 visas exist for treaty investors, meaning they apply to investors from countries with existing US trade agreements – such as NAFTA.
If these investors make an investment of US$100,000 or higher in the US, they can acquire E visas for themselves and their employees, which also puts them on track for permanent residency. This has been a great tool for both Canadians and Mexican that make investments and hire US employees, but it all relies on the existence of a trade treaty.
“If NAFTA goes away, there’s a significant question about whether that process would stop, and also about those companies that have made investments on reliance of the E visa,” said Ujczo.
“Besides NAFTA, there is no other treaty that either Canada or Mexico has that would qualify for E visas, so there is a danger that the US will start de-certifying those investments and immigration visas.”
Furthermore, under the current rules for business visitors, people are allowed to move throughout North America for sales meetings, trade shows, or conduct emergency repairs on equipment. However, these rules also haven’t been updated for a long time.
“If you are going to the US to acquire venture capital, for example, how do you determine whether that is a sales call or actual work that requires a visa?” said Ujczo. “There are different interpretations for business visitors at different ports of entry, and even among the officers at those ports of entry. We’re already in a tight labor market, and our immigration system is not up to 21st century standards, both in the US and North America. The uncertainty created by NAFTA, and the TN visa in particular, does have some companies sitting on their hands on making investment decisions. It’s making recruitment harder for HR teams, because they don’t know if people will be able to move freely around North America.”
What’s next for NAFTA and North American Mobility?
There is some light at the end of the tunnel.
Even if it’s not directly connected to NAFTA, the US has said it is looking to deal with North American mobility and immigration issues in other contexts, so will likely be looking to formulate a plan outside of the agreement.
Stemming from his participation at the NAFTA negotiations, Ujczo also believes that withdrawal is looking less likely with each passing day.
“As we moved into 2018, it’s clear that the parties are making progress on non-controversial issues, and some of the upgrades to the NAFTA, such as a digital chapter, telecommunications, financial services, and customs and trade facilitation, which includes e-commerce,” he said.
“It feels more like a normal trade negotiation now, but the biggest challenge we face is that we’re running out of time. It really needs to be done by March 30th, and we’re going to miss that deadline. With elections and mid-terms in all three countries, this will likely be pushed to 2019, so we probably won’t see withdrawal before that.”
The feeling is that employers and foreign workers alike should brace themselves, be prepared for a withdrawal, and keep their fingers crossed for a new or modified agreement will either preserve of improve the TN classification.