Our Voices

NAFTA 2.0: The United States-Mexico-Canada Agreement (USMCA)

by Veronique Malka

USMCACanada and the United States were able to agree on final terms regarding NAFTA 2.0 just hours before the midnight deadline on Sunday, September 30, 2018. The new agreement is repackaged with a new name, the United States-Mexico-Canada Agreement (USMCA). The USMCA will remain trilateral, despite President Trump’s threats last month to exclude Canada from the agreement if Canada was unwilling to make concessions.

This new deal, emanating from President Trump’s campaign promise to renegotiate NAFTA, could not come sooner. The three countries have been in intense negotiations for over a year, with all parties throwing punches in official statements and even less formal avenues, such as social media. The USMCA is to take effect only after going through the internal democratic processes of international treaties of each country. Mexican President Enrique Peña Nieto will leave office on December 1, 2018, and it is in the best interest of all three countries to have USMCA pass internal muster so any newly elected Mexican Administration cannot undo the hard-earned progress made this year. The Trump Administration can now send the new deal to Congress, initiating the 60-day review period, in time for President Trump to sign the agreement before President Enrique Peña Nieto leaves office. At least, that’s the expectation…

The new deal addresses numerous points of contention between the Trump and Trudeau camps, mainly, the increased American access to Canadian dairy markets, Canada’s insistence on the survival of the Dispute Settlement Mechanism, as well as provisions regarding wages and part origin for auto-manufacturing. The 34 chapter text of the United States-Mexico-Canada Agreement was released early on Monday morning and can be found here.

All three heads of state have hailed the new agreement beneficial to their respective countries, while both the Mexican Peso and Canadian dollar have enjoyed an increase infused by the announcement of the new trilateral deal. However, some experts wonder whether Trump’s insistence on renegotiated terms was worth the resulting strain on the relationship between Canada and the United States, as well as the bad publicity on an international scale, considering they have been long-standing allies and each other’s top ranking trading partners respectively.

How will the new USMCA affect my NAFTA visa? Business as Usual.

Clients concerned about whether their employees will be able to continue working on their TN visa or NAFTA work permits in North America should fret not. This is an entirely valid concern, given there will be some uncertainty until USMCA kicks in officially, and this is entirely dependent on the ratification process in each of the three countries. Our mobility experts at CKR Law believe that any previously issued visas or work permits should not be canceled and that they should, in fact, remain valid until their expiry date. However, any subsequent permits (after their expiry date) will likely need to be obtained under the new USMCA legislation. For NAFTA applications at designated ports of entry and Consulates in the interim, this means business as usual, for immigration lawyers and their clients alike, until USMCA officially takes effect. This is estimated to be as late as January 1st, 2020. Look out for our updates on practice orders issued to Border Officials as well as policy guidelines issued from each country respective Immigration Ministers, as these will influence the treatment of NAFTA applications at the border.   

Please stay tuned for updates about changes to NAFTA and the terms of the USMCA, and how these changes may affect global mobility and your company. If you have any questions, please contact Véronique Malka, CKR Law’s mobility expert and Co-Chair of the Global Mobility Group: vmalka@ckrlaw.com