Trump Administration Notifies Congress of Intent to Renegotiate NAFTA

The White House formally notified Congress on Thursday of the Trump administration’s intent to renegotiate the North American Free Trade Agreement (NAFTA). The notification letter from U.S. Trade Representative Robert Lighthizer marked the start of a 90-day window to consult with members of Congress on developing negotiation priorities before beginning formal negotiations with Canada and Mexico as early as August 16, 2017.NAFTA, USA, Mexico, Canada

Currently, there is no indication that renegotiations will impact NAFTA-related immigration programs. However, under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, the administration’s negotiation objectives are required to be made public 30 days before formal negotiations begin. While the letter to Congressional leadership did not discuss any specific changes to NAFTA, the administration indicated that it would aim to modernize outdated chapters of the agreement and address challenges faced by U.S. consumers, businesses, and workers.

NAFTA Immigration Programs

Among other economic and trade relationships established under NAFTA, the agreement created the TN nonimmigrant classification, which allows certain citizens of Canada and Mexico to work temporarily in the United States in a professional capacity. The agreement also provides an expanded range of permissible business activities for Canadian and Mexican citizens in B-1 visitor status and permits Canadian citizens to submit L-1 intracompany transferee petitions directly at U.S. ports of entry and pre-flight inspection stations for adjudication by U.S. Customs and Border Protection.

Whether the Trump administration intends to alter existing immigration programs under NAFTA is not yet known.

This post was written by Kara Kelly of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

NAFTA: Mexican Trucking Program

NAFTA Mexican carriers long-haul deliveriesPresident Trump’s plans to renegotiate the North American Free Trade Agreement (NAFTA) may also impact a controversial program that allows Mexican carriers to make long-haul deliveries in the U.S.

As part of the NAFTA agreement, the U.S. and Mexico agreed to allow trucks from each country to carry goods across the border for deliveries anywhere inside each of their respective countries, but the program faced challenges from the get-go.  In 2007, the George W. Bush Administration launched a trial program to expand Mexico’s trucking operations beyond the border. However, the program ended in 2009 after Congress defunded the program following pressure from labor unions.

Following retaliatory tariffs imposed by Mexico, the Obama Administration established a new pilot program in 2011 that would allow long-haul operations in the United States by Mexican drivers, beyond the 25-mile “buffer zone” that allows U.S. truckers to transfer and begin transport of merchandise further into U.S. territory.   U.S. labor unions objected but failed in their legal challenges against the program, and it was made permanent in January 2015.  The International Brotherhood of Teamsters, together with other groups, sued the Department of Transportation in 2015 over a report that they argued was not based on sufficient data to allow for these long-haul deliveries.  The program remains in effect while that case is still pending.

Safety has been one of the biggest concerns raised by critics of the program.  However, a 2014 Congressional Research Service report suggests safety likely has less to do with whether the truck originates in the U.S. or Mexico, and more to do with the type of truck being used:

Drayage carriers, whose trucks make short-haul movements and spend much time idling while awaiting customs processing, tend to use older equipment. Long-haul trucks tend to carry relatively high-value goods or temperature-controlled cargo, because lower-value goods and less time-sensitive goods can be carried over long distances much more economically by rail or water. If shippers are willing to pay a substantial premium over rail or water transport to truck their product long distances, it seems plausible that they would choose a reliable trucker with modern equipment to avoid risk of delay or spoilage.

Opponents of the program are almost certain to call for its repeal as part of any new NAFTA negotiations.  Representative Peter DeFazio (D-Oregon), Ranking Member of the House Transportation Committee, opposes the long-haul program and has already said he plans to raise the issue with Trump Administration officials.

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Department of State Releases July 2014 Visa Bulletin

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Bulletin shows nearly four years of advancement in the EB-2 category for applicants chargeable to India and minor advancement for applicants chargeable to China as well as significant advancement in the EB-3 category for applicants chargeable to the Philippines, minor advancement for applicants chargeable to India, and no change for applicants chargeable to China, Mexico, or the Rest of the World.

The U.S. Department of State (DOS) has released its July 2014 Visa Bulletin. The Visa Bulletin sets out per-country priority date cutoffs that regulate the flow of adjustment of status (AOS) and consular immigrant visa applications. Foreign nationals may file applications to adjust their statuses to that of permanent residents or to obtain approval of immigrant visas at a U.S. embassy or consulate abroad, provided that their priority dates are prior to the respective cutoff dates specified by the DOS.

What Does the July 2014 Visa Bulletin Say?

In July, the cutoff date for applicants in the EB-2 India category will advance by nearly four years, while the cutoff date for applicants in the EB-2 China category will advance by only 40 days. Meanwhile, the cutoff date in the EB-3 India category will advance by 17 days, while the cutoff date in the EB-3 China category will remain unchanged. The cutoff date in the F2A category for applicants from all countries will also remain unchanged.

EB-1: All EB-1 categories will remain current.

EB-2: The cutoff date for applicants in the EB-2 category chargeable to India will advance by nearly four years to September 1, 2008. The cutoff date for applicants in the EB-2 category chargeable to China will advance by 40 days to July 1, 2009. The EB-2 category for all other countries will remain current.

EB-3: The cutoff date for applicants in the EB-3 category chargeable to India will advance by 17 days to November 1, 2003. The cutoff date for applicants in the EB-3 category chargeable to China will remain unchanged at October 1, 2006. The cutoff date for applicants in the EB-3 category chargeable to the Philippines will advance by one year to January 1, 2009. The cutoff date for applicants chargeable to Mexico and all other countries will remain unchanged at April 1, 2011.

The relevant priority date cutoffs for foreign nationals in the EB-3 category are as follows:

China: October 1, 2006 (no movement)
India: November 1, 2003 (forward movement of 17 days)
Mexico: April 1, 2011 (no movement)
Philippines: January 1, 2009 (forward movement of 366 days)
Rest of the World: April 1, 2011 (no movement)

Developments Affecting the EB-2 Employment-Based Category

Mexico, the Philippines, and the Rest of the World

The EB-2 category for applicants chargeable to all countries other than China and India has been current since November 2012. The July Visa Bulletin indicates no change, meaning that applicants in the EB-2 category chargeable to all countries other than China and India may continue to file AOS applications or have applications approved through July 2014.

China

The June Visa Bulletin indicated a cutoff date of May 22, 2009 for EB-2 applicants chargeable to China. The July Visa Bulletin indicates a cutoff date of July 1, 2009, reflecting forward movement of 40 days. This means that applicants in the EB-2 category chargeable to China with a priority date prior to July 1, 2009 may file AOS applications or have applications approved in July 2014.

India

In December 2013, the cutoff date for EB-2 applicants chargeable to India retrogressed significantly to November 15, 2004 because of unprecedented demand in this category. This cutoff date remained constant through June. The July Visa Bulletin indicates a cutoff date of September 1, 2008, reflecting forward movement of nearly four years (1,386 days). This means that applicants in the EB-2 category chargeable to India with a priority date prior to September 1, 2008 may file AOS applications or have applications approved in July 2014.

Developments Affecting the EB-3 Employment-Based Category

China

In late 2013 and early 2014, the cutoff date for EB-3 applicants chargeable to China advanced significantly to generate demand in this category. In June, to regulate demand, this cutoff date retrogressed by six years to October 1, 2006. The July Visa Bulletin indicates no change to this cutoff date. This means that only applicants in the EB-3 category chargeable to China with a priority date prior to October 1, 2006 may continue to file AOS applications or have applications approved in July 2014.

India

The June Visa Bulletin indicated a cutoff date of October 15, 2003 for EB-3 applicants chargeable to India. The July Visa Bulletin indicates a cutoff date of November 1, 2003, reflecting forward movement of 17 days. This means that only EB-3 applicants chargeable to India with a priority date prior to November 1, 2003 may file AOS applications or have applications approved in July 2014.

Rest of the World

From September 2013 through April 2014, the cutoff date for EB-3 applicants in the worldwide category advanced by 3.75 years. In June, to regulate the high demand, the cutoff date in this category retrogressed by 549 days to April 1, 2011. The July Visa Bulletin indicates no change to this cutoff date. This means that only applicants in the EB-3 category chargeable to the Rest of the World with a priority date prior to April 1, 2011 may file AOS applications or have applications approved in July 2014.

Developments Affecting the F2A Family-Sponsored Category

In March, as a result of heavy demand in the F2A category from applicants chargeable to Mexico, the cutoff date in this category retrogressed significantly to April 15, 2012. In June, this cutoff date retrogressed again to March 15, 2011. The July Visa Bulletin indicates no change to this cutoff date. This means that only those applicants from Mexico with a priority date prior to March 15, 2011 will be able to file AOS applications or have applications approved in July 2014.

During fiscal year 2013, in an effort to generate demand in the F2A category from applicants from all countries other than Mexico, the cutoff date in this category advanced significantly. This advance resulted in a dramatic increase in demand, followed in June by a further retrogression of the cutoff date to May 1, 2012. The July Visa Bulletin indicates no change to this cutoff date. This means that only those F2A applicants from countries other than Mexico with a priority date prior to May 1, 2012will be able to file AOS applications or have applications approved in July 2014. Further retrogression of the worldwide F2A category should not be ruled out.

How This Affects You

Priority date cutoffs are assessed on a monthly basis by the DOS, based on anticipated demand. Cutoff dates can move forward or backward or remain static. Employers and employees should take the immigrant visa backlogs into account in their long-term planning and take measures to mitigate their effects. To see the July 2014 VisaBulletin in its entirety, please visit the DOS website here.

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June 2014 Visa Bulletin Released, Shows Significant Retrogression for EB-3 Worldwide, China and Mexico

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Below is a summary of the U.S. State Department June 2014 Visa Bulletin:

  • EB-1 remains current across all filing categories;
  • EB-2 for Worldwide, Mexico and Philippines all remain current. The EB-2 India cut-off remains at November 15, 2004 (this has remained stagnant since the December 2013 Visa Bulletin). EB-2 China moves forward to May 22, 2009; and
  • EB-3 Worldwide, China and Mexico retrogress significantly (see below). EB-3 Worldwide and EB-3 Mexico move back to April 1, 2011 and EB-3 China moves back by 6 years to October 1, 2006. EB-3 Philippines moves forward by 2 months to January 1, 2008, while EB-3 India moves forward by only 2 weeks to October 15, 2003.

Dramatic Retrogression for EB-3 China

The Department of State stated in the Visa Bulletin that the “unexpected and dramatic increase in demand being received from U.S. Citizenship and Immigration Service Offices during the past several months has resulted in number use approaching the annual limit for this category. As a result, it has been necessary to retrogress the Worldwide, China and Mexico cut-off dates for the month of June.”

Beginning with the June 2013 Visa Bulletin, the third preference employment-based immigrant visa category (EB-3) for individuals born in the People’s Republic of China (China) had a more recent cut-off date than the second preference employment-based category (EB-2). Accordingly, many foreign nationals chose to “downgrade” their case from EB-2 to EB-3 to shorten their wait time. However, this has had a negative impact on the EB-3 category and has resulted in the severe retrogression (six years) as reported above. Applicants who are still preparing their I-485 Adjustment Applications for this filing category should file before the end of the month, before the retrogression occurs on June 1, 2014.

Employment-Based Projections

The American Immigration Lawyers Association (AILA) reported that on Monday April 21, 2014, Mr. Charlie Oppenheim of the Department of State’s Visa Office (VO) spoke to AILA regarding what his office is currently seeing with regard to visa demand and what might be expected in terms of Visa Bulletin movement at this time. While these “projections” can (and often do) change based on usage and/or new developments, below is a summary of the outlook based on AILA’s conversation with Mr. Oppenheim (note: Mr. Oppenheimer discussed both Family-Based and Employment-Based projections; however, we only report the employment-based projections here):

Employment Based 5th Preference China (EB-5)

  • China EB-5 could retrogress later this year, possibly August or September.
  • Retrogression for China EB-5 in the 2015 fiscal year seems almost inevitable, as there are more than 7,000 I-526 applications pending and 80% are from China.

Employment Based 1st Preference (EB-1)

  • It is still a little early in the fiscal year to know how many unused cases will drop down into EB-2. EB-1 usage is heavier this year than last year.

Employment Based 2nd Preference India (EB-2)

  • It is possible in August, but more likely in September, that India EB-2 will open at 1/1/2008 or perhaps later in 2008, in order to utilize the rest of the EB-2 visa numbers that were unused by the Worldwide categories.
  • How many numbers will be utilized depends on EB-1 and EB-2 usage in the Worldwide categories for the rest of the fiscal year (it could be 5,000 or more). This would be less than what was available in fiscal year 2013.
  • No expected changes for Worldwide EB-2.

Employment Based 3rd Preference Worldwide (EB-3)

  • The VO has limited knowledge as to the number of eligible applicants, and USCIS has encouraged DOS to “move the category forward” over the last five months. Demand appears to be increasing, thus, it is unlikely in the short run that the category will move forward. In fact, if current demand continues, something may have to be done as early as May 2014 to slow the demand in this category.
  • The last quarter of the fiscal year for 2014 does not look good, and no movement, or retrogression, is possible.

Employment Based 3rd Preference China (EB-3)

  • Many Chinese nationals who were waiting in the EB-2 category have been filing to “downgrade” from EB-2 to EB-3, and the result of these requests will be reflected in the coming months.
  • High demand is expected to continue in this category and a correction may be reflected as early as the May or June Visa Bulletin, depending on demand.

Why Are Priority Dates Important Anyway?

The issue of a visa number’s “availability” is tied to the U.S. preference system for permanent residence. The U.S. maintains limits on those who can apply to enter as permanent residents; these limits apply by type of immigrant visa sought for permanent resident as well as country of origin. From time to time, backlogs occur in certain categories of employment-based visas, for all persons or for persons from certain countries (backlogs are almost always present for family-based visas) as there are more people applying in those categories from those countries than there are visa numbers available. The setting of the preference is based upon the position’s minimum requirements, not the qualifications of the employee. The net result is that persons who have applications from those countries in the third preference are not able to move on to the final step of the permanent residence process until their “priority date” (or “place in line”) moves to the front of the line for immigrant visas. The line is set by the Department of State and is reviewed monthly. In many cases, this step can take eight years or more depending on the filing category.

The VO’s projections can give hope to some applicants, who in the coming months, may be eligible to move to the final step of the permanent residence process, after waiting for years on hold. But for others, the outlook is not very promising. While the future movement of the immigrant visa availability remains hazy, one thing is clear. Immigration Reform is needed to help eradicate these extreme and unnecessary delays for individuals who continue to contribute to the U.S. economy; and for employers, who are forced to continue filing multiple temporary work extensions in order to retain valuable employees. We will continue to watch the movement in the Visa Bulletin and provide updates.

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Reform Opens Door to Private Investment in Mexico’s Energy Sector

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Mexican Senate presents comprehensive Energy Reform Bill to the House of Representatives with tremendous potential for domestic and foreign energy companies.

In an encouraging move toward energy reform, the Mexican Senate approved today and presented to the House of Representatives a bill—the combined effort of Partido Acción Nacional (PAN) and Partido Revolucionario Institucional (PRI)—with a constitutional reform proposal (the Energy Reform Bill) that paves the way to allow production and profit-sharing arrangements with, and the issuance of risk-sharing licenses to, private parties. The bill further advances the efforts of both parties, detailed in our August 15, 2013 LawFlash,[1] to promote energy reform in Mexico.

If the bill is enacted, these production and profit-sharing arrangements could be entered either directly by private parties or in association withPetróleos Mexicanos (Pemex), the state oil company. It is expected that risk-sharing licenses will mimic a concession-based system that would allow the booking of reserves for accounting purposes. Mexico has struggled with the adoption of a “pure” concession-based system due to a deeply engrained social and political belief that Mexico’s oil and gas reserves are and should remain the exclusive property of the Mexican state.

In addition, the Energy Reform Bill proposes the creation of the Mexican Oil Fund, with Mexico’s central bank, Banco de México, acting as the trustee. The fund would manage, invest, and distribute hydrocarbon revenues.

In the power sector, the Energy Reform Bill reaffirms the state monopoly with respect to the operation of the national grid and transmission and distribution activities. However, if enacted, the bill would break horizontal processes by permitting private parties to participate and contract with the Comisión Nacional de Electricidad (CFE), the state-owned utility company, and by allowing competitive activities with respect to power generation and commercialization.

Details on the reform are expected to be addressed in subsequent legislation that would follow congressional approval of the Energy Reform Bill; however, the bill underlines the reality of the reform and its potential for domestic and foreign private investors. The Energy Reform Bill, if approved, would give Congress a 120-day period to establish the necessary legal framework and regulate the new contracting mechanisms.

In order to pass, the bill will have to be approved by the House of Representatives and by 17 of the 32 state legislatures. It will then be submitted back to Congress for presentment of the final bill to the president, who must sanction and sign the proposed Energy Reform Bill into law, at which point it will be published in the Mexican Federal Official Gazette. Although some adjustments are expected, both PRI and PAN have indicated their intent to complete the congressional approval of the constitutional amendments on or before December 15, 2013.


[1]. View our August 15, 2013 LawFlash, “Mexican Government to Consider Overhaul of Energy Sector,” available here.

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