This article was originally published in Autumn 2018. We are republishing it in 2020 now that the USMCA was finally ratified by the Canadian government.
Did you know that the USMCA (United States-Mexico-Canada Agreement) only got signed on Friday November 30 down in Buenos Aires? What was announced in late September was essentially an agreement to sign an agreement. And on Saturday December 1, 2018 a new populist president, Lopez Obrador, takes power in Mexico. Hence the November 30 deadline.
So, do you have worry about travelling on business from the U.S. or Mexico into Canada (and vice versa) from Saturday December 1, 2018 onward? If you travel on a TN (Trade National) visa, should you be concerned?
No, you shouldn’t Worry. Here’s why.
In the first place, once the agreement gets signed by trade representatives or ministers, it must then be ratified by the legislatures of each country: Congress in the USA, Parliament in Canada, and the Mexican Senate. This is a process that will take several months, or longer. Until 3 months after all three of the respective legislatures ratify the USMCA, NAFTA and all its provisions will remain in effect. That means that NAFTA should remain in effect for at least the first half of 2019, and perhaps longer and even into early 2020.
But regardless, unless the process breaks down unexpectedly, you should be aware of any possible change to business travel regulations as a result of the new agreement. The good news is that there will be very little change in this regard. The main changes in the USMCA as compared to NAFTA are:
- The percentage of auto production done in the USA, Canada, or Mexico that qualifies for zero tariffs has risen from 62.5% to 75%.
- The minimum wage for at least 40% of auto production has risen substantially to US$16 an hour. This will affect Mexican auto production and have little effect on Canadian auto production.
- Union rights are to be strengthen in Mexico. Again, this will not affect auto production in Canada much and is meant to raise the cost of production in Mexico to a level closer to that of it’s NAFTA/USMCA partners, the USA and Canada.
- US dairy farmer get improved access to the Canadian market which has been restricted through supply management programs.
- Intellectual property rights and digital trade provisions have been modified to try and protect copyright in the digital age.
- While the trade dispute mechanism has been preserved the ability of investors to sue member governments has been curtailed.
- Section 232 Tariffs which are supposed to be used to protect national security but which the current administration has used to target steel and aluminum producers from abroad will not be modified by the USMCA.
- There’s a 6-year sunset provision that means the treaty has to be reviewed and re-authorized every 6 years.
- Canada’s ability to negotiate a free trade deal with China will be affected by the new treaty because of a clause that allows the other members of USMCA (essentially the USA) to review any free-trade deal with a so-called “non-market economy” which according to the language of the USMCA applies to the Chinese economy due to the presence of State-Owned Enterprises or SOE’s in China.
The only real area of the USMCA that potentially could affect business travellers between Canada, the USA, and Mexico is Chapter 16 of the agreement. The so-called Trade National (TN) visas which allow citizens of Mexico and the United States to enter Canada for business travel and to work temporarily in Canada without a LMIA. Canada, for example, had lobbied to have the list of professionals that qualify for a Trade National visa to be expanded, but the list has remained essentially unchanged.
USMCA, Chapter 16, much like the previous NAFTA agreement, classifies four types of Trade Nationals that can apply for a TN visa:
They must provide: evidence of citizenship as well as documentation of their proposed activity as well as documentation that the activity is international and not local in scope. Often an oral declaration at the Port of Entry is sufficient but a letter from their employer may be required as further proof. Business visitors are people engaged in the following activities:
- Research & Design: Technical, scientific, and statistical researchers
- Growth Manufacture and Production: purchasing and production management personnel
- Marketing: marketing researchers and analysts & trade fair and promotional personnel
- Sales: Sales representatives and agents & Buyers purchasing for an enterprise
- Distribution: transportation operators & customs brokers
- After Sales Services: Installers, repair and maintenance personnel & supervisors with specialized knowledge
- General Service: the following professionals (see professionals category below) qualify:
- Commercial Transactions: Management and supervisory personnel & financial services personnel
- Public Relations and Advertising: PR and advertising personnel
- Tourism: Tourism personnel
- Tour Bus Operations: Tour bus operators
- Translation: Translators or interpreters.
Traders and Investors:
These are people who are carrying out substantial trade in goods and services and who are establishing or advising or providing key technical support to the establishment of an operation in Canada. Traders and investors may be required to apply for a visa by immigration authorities in Canada. You will need proof of citizenship as well of course.
These are people who are rendering service to an enterprise in a managerial or executive capacity or who provide specialized knowledge. Intra-Company transferees may have to provide evidence that they have been employed by their company for at least 1 year during the last 3 years. They may be required to apply for a visa as well and must provide proof of citizenship as well.
“Professionals” must provide documentation confirming their professional activity and purpose of visit, along with proof of citizenship. These are people from the following list:
- Computer Systems Analyst
- Disaster Relief Insurance Claims Adjuster
- Graphic Designer
- Hotel Manager
- Industrial Designer
- Interior Designer
- Land Surveyor
- Landscape Architect
- Management Consultant
- Range Manager/Conservationalist
- Research Assistant (Post-Secondary Institution)
- Scientific Technician/Technologist
- Social Worker
- Sylviculturist (including Forestry Specialist)
- Technical Publications Writer
- Urban Planner (including Geographer)
- Vocational Counsellor
- Medical Laboratory Technologist
- Occupational Therapist
- Physiotherapist/Physical Therapist
- Recreational Therapist
- Registered Nurse
- Animal Breeder
- Animal Scientist
- Dairy Scientist
- Physicist (including Oceanographer in Canada)
- Plant Breeder
- Poultry Scientist
- Soil Scientist
- Teacher at a College, Seminary, or University
In other words, the USMCA preserves the status quo of Trade National (TN) professionals listed above. So, if you are a:
- Business Visitor,
- Trader and Investor,
- Intra-Company Transferee, Or a
You can breathe a sigh of relief for now. Things won’t have changed much at all once the USMCA is signed and ratified and comes into effect sometime late next year or even early in 2020.