To renegotiate NAFTA without enhancing labour integration would be a missed economic opportunity. The agreement needs a renewed labour mobility chapter.
North American businesses have the moving of industrial goods, raw materials and final products down to a science. According to the Council on Foreign Relations, over recent decades NAFTA has “fundamentally reshaped North American economic relations, driving an unprecedented integration” of the three countries. The caveat to this success, however, is that despite NAFTA and all of the related integration of businesses through continental supply chains, workforce integration in North America remains in its infancy.
Beginning in 1994, Canada, the US and Mexico worked together in a formalized way to recognize and ease the movement of people for economic purposes. NAFTA’s labour mobility provisions can be seen as the motherboard of the operation — the brains behind the brawn and is perhaps the most important under-the-radar issue facing the three countries in upcoming negotiations. Unfortunately, this motherboard has become dated and inefficient. The global economy we live in demands more.
Imagine an outcome in the NAFTA renegotiations that results in business travellers facing more hurdles, more delays at airports and more limits on their ability to travel for business meetings. Imagine a continent where a university can’t hire a professor from one of the other North American countries in an expedited manner, or where a hospital in Toronto can’t easily hire a specialized physician from the United States.
There are two major labour components to NAFTA. First, the NAFTA B1 Business Cycle Activities provisions enable Canadians, Mexicans and Americans to make sales calls, undertake marketing activities, perform after-sales service and provide general service to companies in each other’s countries. These provisions mean that commerce can occur with minimal hassle at points of entry, without extra visa requirements. And these provisions are much broader and better than those afforded to other countries — Canada, Mexico and the United States benefit from more commercial labour movement than other foreign nationals in North America. Companies in the three countries would experience significantly more regulatory burdens if NAFTA measures for business travellers were to revert to the World Trade Organization’s General Agreement on Trade in Services (GATS) procedures.
The second part is the NAFTA professional list, which permits longer-term employment in all three countries. Enhancing the coverage of this list is essential to continued economic success. This list was negotiated to improve mobility for professionals and “in demand” occupations. The 60 or so occupations on this list can “engage in a prearranged business activity at a professional level” or arrange a service contract for longer-term, temporary work in another NAFTA member’s economy, without the cumbersome traditional immigration application procedures. For Canadians looking to work in the United States or vice versa, the paperwork can be done at the border in minutes.
This list was negotiated in the early 1990s and there have been many calls to update and revamp it for today’s North American economy. For instance, some occupations in the high-tech sector or specialized occupations in the energy sector didn’t even exist during the first NAFTA negotiations. Other occupations have experienced large demographic shifts, and increased flexibility between NAFTA partners would help address the economic risk of labour shortages in certain areas. While there have been some instances of inconsistency and challenges with these temporary work visas in practice, the overall system is quite effective for the employers requiring employees that fit the current criteria.
In the context of many upcoming large-scale infrastructure and energy projects, there will be new opportunities that require material, people and policies to enable further integration and flexibility of North American labour markets. For example, the US Chamber of Commerce says that the US government needs to invest $2 trillion over current spending levels on infrastructure for the next 10 years. In Canada, according to the Canadian Infrastructure Report Card, one-third of all municipal assets are coming to the end of their useful lives. The kind of economic renewal required in North America is predicted to stretch existing workforce availability, particularly if we restrict ourselves to domestic workers alone.
In order to fully realize our potential, policy-makers and NAFTA negotiating teams need to think about the North American workforce in the context of what companies need to efficiently meet economic demands. The politics of temporary workforces and programs have the potential to be divisive in all three countries. However, the economy of the future relies on smart workforce policy and linkages to training systems that are continental in nature.
A renewed labour mobility chapter should further expedite business travel using existing trusted traveller programs like NEXUS and SENTRI and expand occupations eligible for the NAFTA professional list. These updates should include high-tech workers, skilled trade occupations and managerial-level employees. In addition, the chapter should facilitate a regular review and ability to update the list based on economic conditions and the needs of employers, labour organizations and other economic stakeholders.
With this NAFTA renegotiation, countries that trade with each other have taken a step toward cooperation and flexibility. The successful business of the future needs a workforce with more flexibility, just as do the physical goods being moved across North American borders today. To renegotiate the agreement without improving labour mobility would be a major missed economic opportunity.
This article is part of the Trade Policy for Uncertain Times special feature.
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