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Canada: With NAFTA’s Uncertain Future, CETA is Poised to Step Up For Business Travelers

Since 1994, the North American Free Trade Agreement (NAFTA) has facilitated business mobility to and from Canada, along with other Canadian free-trade agreements — including those between Canada and Chile, Peru, Colombia, South Korea and, most recently, the European Union in the form of the Comprehensive Economic and Trade Agreement (CETA).

With NAFTA renegotiations between Canada, the U.S. and Mexico at a standstill, it is hoped that the trade in services provisions of CETA ease some of the potential loss, should NAFTA be repealed.

Under CETA, business travelers from EU member states benefit from preferential treatment when working in Canada if they fall under one of four basic categories: business visitors, intra-corporate transferees, investors and professionals.

A CETA short-term business visitor to Canada can engage in certain work activities without a work permit, including conducting technical research, leading a tour group and providing interpretation services. These activities, while broader than those of a general business visitor, are still more restrictive than those permitted for NAFTA business visitors. NAFTA, for example, permits vehicle operators transporting goods to Canada to work in this country.

Additionally, under CETA’s new business visitor for investment purposes category, an EU citizen in a managerial or specialist position can set up an enterprise in Canada without a work permit, allowing expeditious investment in new Canadian enterprises without the need for cumbersome work permits.

Like NAFTA, CETA permits EU employees in senior managerial or specialized knowledge positions to be transferred to a related Canadian enterprise. Further, CETA now permits university graduates transferring to a related Canadian enterprise for career development purposes to obtain intra-corporate transferee work permits.

The CETA investor category is being assessed using the guidelines set out for NAFTA investors. The main distinction is that CETA investors must administer their investment in a supervisory or executive capacity, and cannot simply possess “essential skills.” CETA unfortunately does not contain any provisions like those for NAFTA traders.

CETA professionals differ significantly from NAFTA professionals in several ways. Most noticeably, NAFTA and CETA contain very different lists of occupations qualifying for their respective professional categories. CETA professionals are separated into two subcategories: contractual service suppliers (i.e., individuals servicing a Canadian customer under a contract with their EU employer) and independent professionals (i.e. self-employed EU citizens servicing a Canadian customer contracting with them directly).

Unlike a NAFTA professional, a CETA professional may not work as an ordinary full-time employee of a Canadian enterprise; he or she may only supply a service pursuant to a service contract. NAFTA professionals can qualify for a work permit for employment with a Canadian employer. Another distinction is that CETA professionals must meet stringent work experience requirements, while NAFTA professionals need only a baccalaureate degree to qualify for a work permit. Finally, a CETA professional work permit can only be issued for one year (rather than three years under NAFTA) and extensions are discretionary (rather than pro forma).

Just as NAFTA facilitated business travel between Canada, the U.S. and Mexico, CETA will do the same for Canada and EU member nations. CETA is stronger than NAFTA with respect to categories such as the graduate trainee ICT and business visitor for investment purposes. However, CETA is the more restrictive agreement generally. While it effectively enhances business mobility for EU nationals, CETA is not as generous as NAFTA at enabling entry of professionals to Canada.

CETA has been in force in Canada for more than three months and is currently being brought into force by individual European nations. Once CETA is proven by Europe to be as beneficial as it has been in Canada, it is hoped that CETA trade in services provisions will be renegotiated and expanded to include more professions in a similar manner to the current NAFTA provisions.

The Lawyers’ Daily link to the article is here

 

Firm News:

  • Jacqueline Bart and Carrie Wright co-authored legal article “Canada: It’s Not All Sunshine and Rainbows” UIA Immigration and Nationality Newsletter, October 2017.
  • Jacqueline Bart and Carrie Wright co-authored legal article “Canada’s Strict Employer Compliance Regime: The Most Stringent Worldwide”, ABA SIL, Canada Committee Year End Report, January 2018.
  • Jacqueline Bart and Oliver Mao co-authored legal article “With NAFTA’s Uncertain Future, CETA is Poised to Step Up For Business Travelers”, The Lawyers’ Daily, December 2017.
  • Jacqueline Bart, Annsley Kesten and Clara Morrissey co-authored LawInContext [Interactive Knowledge from Baker McKenzie] Private Banking Online Resource Report “Canada: Immigration”, October 2017
  • Jacqueline Bart and Elisa Usher wrote Practical Law Practice Online Book: Business Immigration In Canada”,  Thompson Reuters,  September 2017.
  • Jacqueline Bart and Oliver Mao co-authored legal article  “Trade in Services: Legal Comparison of CETA to NAFTA” ABA SIL Immigration and Nationality Law News, Winter Issue 2017/2018.
  • Jacqueline Bart moderated a webinar for the ABA SIL Immigration Committee on “International Legalization Of Certain Drugs: Legal And Practical Immigration Effects: Canada (Carrie Wright of BartLAW spoke), The Netherlands and USA”, November 2017.

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