- Canada, Mexico and the United States Sign Revised Trade Pact
- December 6, 2018
At a glance
- The United States-Mexico-Canada Agreement will replace NAFTA once the Agreement is ratified by the legislatures of the three member countries.
- The labor mobility provisions of the 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
The leaders of Canada, Mexico and the United States have signed the United States-Mexico-Canada Agreement (USMCA), the next step toward replacing the North American Free Trade Agreement (NAFTA). The agreement must now be ratified by the legislatures of the three countries before it can be implemented. Ratification is expected to take place in 2019.
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.
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 now 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 an extended 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.