Near the midnight deadline on Sunday, September 30, 2018 the U.S. reached an agreement with Mexico and Canada on an international trade agreement after much debate about developing an updated version of NAFTA.

This new international trade agreement is titled United States–Mexico–Canada Agreement (USMCA). Although agreed upon by all three North American countries, it will not go into law until passed by Congress. The new agreement is not yet in effect—it is still expected to go before Congress, and if passed, will then go into effect in 2020.

Immigration Consequences:

The USMCA Immigration Chapter is identical to the NAFTA Immigration Chapter. Chapter 16 of NAFTA provides for the non-immigrant travel between North American countries without a visa requirement, and this Chapter has remained completely intact in the USMCA. Non-immigrant international travelers for business purposes are still able to take advantage of the no-visa requirement between the U.S., Mexico, and Canada. Although officers at the border may make reference to changes in immigration policy under the new agreement, immigration between North American countries will NOT change when, and if, USMCA goes into effect. However, once should consult with an immigration attorney because processes and procedures vary from one port to the next.

Significant Policy Changes:

There are a few significant policy changes between NAFTA and the proposed USMCA that may affect your international business. The significant changes you should be aware of are:

Steel Tariffs:

The steel tariffs placed on Canada by Trump remain intact in this agreement and are expected to be dealt with separately in the future. As the current agreement stands, steel imports from Canada to the U.S. are still subject to the tariffs.

Auto Tariffs:

To be imported duty-free, a car must be manufactured with 75% USMCA-member produced material, up from the previous 62.5%. In addition, 30% of the automobile must be produced by workers earning at least $16 per hour.

Dairy Industry:

U.S. dairy farmers have gained access to Canadian markets for products specified in “Class 7” including milk protein and infant formula under the new agreement.

Should you have any further questions with regard to this new agreement please feel free to contact out Kitch Immigration Law Practice Group at 313-965-2909.

Policy Update: The United States - Mexico - Canada Agreement and How It Affects Immigration

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