On Thursday May 18, 2017, President Donald Trump gave notice to Congress that he intended to renegotiate NAFTA, a trilateral free trade agreement between the Canada, Mexico, and the United States. This triggered a three-month countdown until negotiations can begin. NAFTA has long been one of the centerpieces of Trump’s campaign rhetoric, being alternatively called a ‘disaster’, ‘horrible deal’, ‘defective agreement,’ among many other things. Generally, when Trump has criticized NAFTA, he has done it in reference to ‘unfair’ trade goods such as manufacturing, softwood lumber, or dairy. Some of these are covered by NAFTA, and some such as the dairy market were specifically excluded from the agreement. But they are not the only things covered by the wide-ranging NAFTA agreement.
Trade in services is something that is not talked about often when discussing trade. It’s a lot easier to picture a car or a truckload of lumber crossing the border. It’s harder to see that financial services or IT services are the much the same thing. While the United States might have a trade deficit with Canada when it comes to trade in goods, once trade in services are counted in, it turns out that the US actually has a trade surplus with Canada, to the tune of $8.1 billion according to the latest numbers of the US Census bureau. (see: Exhibit 20- U.S. Trade in Goods and Services by Selected Countries and Areas – BOP Basis)
So what exactly does immigration have to do with this?
In 1993, the NAFTA agreement introduced a new immigration visa to all three countries, to enable professionals of all sorts to work in these service areas more freely. In the United States, this is referred to as a “TN” visa, in Canada a professional visa. The types of professions that qualify for this visa are described in Appendix 1603.D.1 of the trade agreement. They include lawyers such as myself, accountants, engineers, pharmacists, geologists, teachers, and so on. All of these professions require at least a Bachelor’s degree from university, and over 60 professions are covered by the agreement.
In order to work in another NAFTA country, professionals have to present themselves at a either a port of entry or a consulate of the country they wish to work in, with a letter of employment from a company based in the country, documents proving their professional status, and proof that they’ll eventually go back to their own country. They are then granted a three year visa which allows them to work in the country, and the visa can be renewed as many times as you want.
According to the US Department of State, 14,768 TN visas were issued in 2016, with an additional 9,762 being issued to spouses and children of these professionals. This is a far smaller number than the much more well-known H1B visa (180,057 granted in 2016) that has been in the cross-hairs of critics of immigration.
Trump hasn’t said anything about this professional visa part of NAFTA. Neither have any of the people charged with renegotiating the agreement, such as Wilbur Ross, the US Secretary of Commerce, or Robert Lighthizer, the US Trade Representative appointed on May 10th. But trade negotiations have a way of growing beyond the initial issues that brought the parties to the table, as negotiators of all the parties involved take deep and comprehensive looks at the agreement. The professional visa annex will certainly get a thorough looking-over in the course of this renegotiation and modernization. There are jobs today that didn’t even exist when NAFTA was originally negotiated, or were at most a twinkle in the eye of a visionary entrepreneur. Even if Trump and his administration hadn’t intended to look at this section of the agreement, it will likely be brought up in many meetings and committees, where some sort of decision will have to be made.
Unwittingly by uncorking the bottle, the genie has slipped out, and we don’t have a crystal ball to predict what Trump and his administration will ultimately want to do with this section of NAFTA. If the negotiations result in more of a ‘tweak’ than a complete overhaul, the visa regime might even be completely untouched. Or, it might be abolished completely. At this point, all we have is a huge cloud of uncertainty surrounding the entire agreement.