This article originally
appeared on https://blog.newlandchase.com.
It has been republished here with
permission from Newland Chase, A CIBT
As NAFTA negotiators continued high-level meetings this week in
Washington, U.S. President Donald Trump once again raised the protectionist specter
of immigration issues derailing the ongoing efforts by the United States,
Canada, and Mexico to update the 25-year-old North American Free Trade Agreement (NAFTA). In his most recent
salvo this week on NAFTA and immigration, the President tweeted:
“Mexico, whose laws on immigration are very
tough, must stop people from going through Mexico and into the U.S. We may make
this a condition of the new NAFTA Agreement. Our country cannot accept what is
happening! Also we must get Wall funding fast.”
But does NAFTA and the current renegotiation talks really have
anything to do with immigration? What are the odds that the current
renegotiations will end in a tightening of workforce mobility for companies
operating in the U.S.?
While NAFTA is first and foremost a free trade agreement, it does contain provisions dealing with
immigration. In the United States, NAFTA serves as the current basis for four
vital aspects of mobility applicable to workers and business travelers from
Canada and Mexico:
However, the Trade
Facilitation and Trade Enforcement Act of 2015 (commonly referred to as the
“customs act”), enacted after the original adoption of NAFTA, now prevents new
provisions on immigration to be a part of any future trade agreements.
Therefore, contrary to one interpretation of the President’s tweet, any renegotiated
NAFTA will not contain restrictions on current immigration routes, new
immigration quotas or limitations, or commitments on enforcing illegal
immigration laws, border security, or funding of border walls. Any such agreements on immigration
could only be made as “side agreements” made as conditions for signing a new NAFTA.
The greatest risks of the current NAFTA negotiations for corporate
immigration are then essentially:
Up to this point in the negotiations, #1 appears to be not even on the table. Thus far, talks have been
dominated by auto content, trade dispute resolution, government procurement,
fruit and milk import restrictions, and a five-year “sunset clause” – with no
mention of immigration by any of the three sides.
So what are the chances that
#2 rears its ugly head and the U.S. walks away? Not likely. At this point, we
believe current conditions favor a tentative revised NAFTA agreement by the
three sides sometime before July 1. With Mexican President Enrique Pena Nieto
facing a tight election on July 1, and Trump and congressional Republicans
facing the possibility of losing the House of Representatives in mid-term
elections in November, motivation is high for the U.S. and Mexican leaders to
cut some kind of a deal soon and claim a win. Introducing immigration into the
negotiations at this late stage seems contrary to the interests of both.
Trump continues to hint that things are going well and a deal could
come quickly, but is then also quick to posture that he is willing to “walk
away” unless he gets what he wants. At this point, the only “odds maker”
willing to go on record has been Mexican CCE business chamber trade head,
Moises Kalach, who this week optimistically set the odds at a 75 percent chance
of “reaching a deal soon”. While the writer of this blog hesitates to put the
odds of an agreement this Summer that high… given a straight-up wager, I’d put my money on a renegotiated NAFTA
(with no changes to immigration) sometime in May “to win”.
The second most likely scenario is… that there are just too many
outstanding issues and not enough time before July 1… and negotiations are put
on hold till early in 2019. Recall that there is currently no “sunset clause”
in NAFTA and the current agreement (and
its immigration provisions) continue as long as negotiations are ongoing or
fail with no agreement and no party formally withdrawing from NAFTA. Either way, it’s still “a win”, albeit a potentially
temporary one, for international business and corporate immigration. “No
deal” is always better than a “bad deal”. Keep reading this blog, and Newland
Chase will continue to keep a close eye on NAFTA and report on this and other important
developments potentially impacting corporate immigration for our clients.