Canada: How The United States' Withdrawal From The NAFTA Would Affect Canadians Working In The United States

Last Updated: May 8 2017
Article by Henry Chang


Last week, it was reported by the media that the White House was in the final stages of drafting an executive order, which would give notice of the United States' intention to withdraw from the North American Free Trade Agreement (the "NAFTA"). The Financial Times even obtained and published a draft copy of the executive order that President Trump was about to sign.

Many experts believed that there was simply a negotiating tactic to scare Canada and Mexico into granting more concessions when the three parties finally sat down to renegotiate the agreement. This may have been the case, since it was later announced that President Trump had "changed his mind" after the President of Mexico and the Prime Minister of Canada reportedly called him and asked him to reconsider.

There was also some uncertainty regarding whether President Trump would have the legal authority to unilaterally withdraw from the NAFTA. Although the President of the United States does appear to have the ability to withdraw from trade agreements under Section 125 the Trade Act of 1974, the actual implementation of the NAFTA is due to the North American Free Trade Agreement Implementation Act, which Congress enacted in 1993. Because the President does not have the authority to unilaterally repeal legislation enacted by Congress, it is uncertain whether President Trump could actually follow through with his threat to withdraw from the NAFTA without the support of Congress.

The draft executive order required the United States Trade Representative to deliver a notice of withdrawal to Mexico and Canada, in accordance with Article 2205 of the NAFTA. Article 2205 states that a party may withdraw six months after it provides written notice to the other parties. However, Article 2205 is intended only to give notice of the party's intention to withdraw and not to actually cause the withdrawal itself. Even after such a notice was delivered, President Trump would still need to formally terminate the NAFTA under Section 125 of the Trade Act of 1974; he might also need Congress to repeal the North American Free Trade Agreement Implementation Act.

Nevertheless, President Trump has clearly expressed a willingness to walk away from the NAFTA if he does not obtain the concessions that he expects from Canada and Mexico. For this reason, it may be appropriate to consider how such a withdrawal might affect Canadians.

Although the Canadian trade-related implications of a U.S. withdrawal have been extensively discussed in the media, there has been no significant discussion regarding how it might adversely affect the continued ability of Canadians to seek U.S. work permits under the NAFTA. I will attempt to address this issue below.

NAFTA-Dependent Work Permits for Canadians

There are several popular U.S. work permits used by Canadian citizens, which are directly dependent on the United States' continued participation in the NAFTA:

  1. The Trade NAFTA ("TN") classification for certain eligible professionals;
  2. The E-1 Treaty Trader classification for entrepreneurs (and their key employees), who are engaged in substantial trade; and
  3. The E-2 Treaty Investor classification for entrepreneurs (and their key employees), who have made a substantial investment in an eligible U.S. business.

In addition, although the L-1 classification for intracompany transferees exists independently from the NAFTA, the ability of Canadian citizens to apply for L-1s through United States Customs and Border Protection at a Canadian airport preclearance or at a land port-of-entry along the Canada-U.S. border is a direct result of the NAFTA. This represents a significant benefit for Canadian citizens since the processing of L-1 petitions can take months to adjudicate, if filed through a United States Citizenship and Immigration Services Service Center, the normal procedure for non-Canadians.

Implications for Canadians Currently Holding NAFTA-Dependent Work Permits

It is impossible to know exactly how the United States would deal with Canadian citizens who are already in the United States under a NAFTA-dependent work permit, if the United States withdraws from the NAFTA. There is very little precedent for this.

When the Government of Bolivia terminated its bilateral investment treaty with the United States, a ten-year transition period was given to Bolivian citizens who had qualifying investments in place in the United States on June 10, 2012 (the effective date of the termination). Any Bolivian citizen who already held E-2 treaty investor status based on an investment established or acquired on or before June 10, 2012, was entitled to continue in E-2 status until June 10, 2022. Unfortunately, this ten-year transition period was only given to Bolivian citizens because Article XVI of their bilateral investment treaty specifically provided that it would continue to apply to covered investments established or acquired prior to the date of termination, for an additional period of ten years.

As the NAFTA does not contain a similar provision, nothing appears to prevent the United States from immediately terminating the existing TN, E-1, or E-2 status of any Canadian on the effective date of withdrawal. Of course, Canadians holding L-1 status should still be fine, since their eligibility is not dependent on the NAFTA; they would only lose their ability to apply at the time of entry.

The only good news is that Canadians working under one of the NAFTA-dependent work permits will receive some advance notice before their status terminates. As mentioned above, Article 2205 of the NAFTA prevents the United States from terminating its participation in the NAFTA for at least six months after it has given formal notice to Canada and Mexico. At the very least, Canadian citizens will have this period of time to settle their affairs.

In addition, the uncertainty regarding whether President Trump has the legal authority to unilaterally withdraw from the NAFTA without Congressional support is expected to give rise to numerous lawsuits. This may further delay the United States' ability to terminate its treaty-related obligations under the North American Free Trade Agreement Implementation Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Henry Chang
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.