Tag Archives: NAFTA

What should the Obama administration do?

The Obama administration is expected to announce a series of executive orders later today (8pm EST) regarding immigration policy. Many suspect that the President may provide relief from deportation and work permits to millions of US illegal aliens, among other changes. The best sketch of what we can expect has been provided by Fox News, which has allegedly received a ten point draft of what Obama will announce.

I have reservations about the Obama administration attempting to pass immigration reform via executive order. My chief concerns are that it sets precedent for greater executive discretion in migration policy, and that congressional Republicans will simply spend the remainder of Obama’s term trying to reverse ‘Obamigration’.

Co-blogger Nathan Smith and Bryan Caplan penned a more optimistic perspective on Obama’s use of executive powers back when the administration first announced the Deferred Action for Childhood Arrivals (DACA) program in 2012.  Caplan seems less optimistic about this latest round of executive action.

My reservation should not be taken to mean that the Obama administration should stay quiet on immigration. Far from it, there are two major steps the administration could pursue if it were serious about being more pro-immigration.

1. Negotiating NAFTA 2.0

The North American Free Trade Agreement (NAFTA) is celebrating its twentieth birthday this year. The trade agreement improved trade relations between the United States, Canada and Mexico in several sectors, but it fell short on several others including labor mobility.

Obama could call up his counterparts in Mexico City and Ottawa and begin negotiations on expanding NAFTA to remove any remaining trade restrictions between the three countries. The issue of labor mobility was ignored in the initial phase of NAFTA to minimize political tensions, but surely after two decades we can begin dialogue on allowing the free movement of people across North America?

The Schengen Area in the European Union provides us with a prime example of how to, and how not to, implement a free movement zone among the North American nations. Ideally a free movement zone between the North American nations should allow the unrestricted movement of individuals, while not creating tax burden on the host nations to provide state welfare.

I have written on this possibility previously. Of related interest Freakonomics recently had a podcast on a US-Mexico ‘merger’.

2. Allowing the Federalization of Immigration Policy.

It is unlikely that we will see sweeping reforms of the immigration system at the federal level in the near future. Even if last year’s Senate immigration bill were passed the system would only be marginally improved. Things are more optimistic at the state level though, and several state legislatures have signaled willingness to pursue their own regional policies.

Unfortunately most state legislators have curbed their proposals in fear that the federal government won’t stand for their actions. If the Obama administration made it clear that it were willing to see states take a more proactive role in shaping immigration policy things might turn out for the better in the long run.

For comparison let us consider marijuana legalization efforts. At the federal level marijuana is still illegal, but the Obama administration has thus far tolerated its legalization by the states of Colorado and Washington. In the most recent midterm elections Alaska, Oregon, and Washington DC all passed legislation to legalize marijuana. At this rate it won’t be long before marijuana is legal nationwide.

Why not allow states the same leeway in immigration policy? If Utah wishes to grant legal status to its illegal alien population and create a guest worker program for its state, why not allow it to do so? If New York wants to grant citizenship to its resident migrants, why stop it? Allowing states to set their own migration policies might lead to a few of them adopting anti-migration policies, such as Arizona, but this is a small cost to be paid.

The Obama administration should set parameters under which the states can work and thereafter sit back and watch them experiment with migration policy.

I have previously written on the subject in We Need More San Franciscos and Thoughts on State-Based Immigration Reform . My co-blogger John Lee has also explored the concept as it relates to Canada’s immigration system . Alex Nowrasteh and his colleagues at the Cato Institute have teased the idea out in previous events , and policy analysis papers . The Reason Foundation has also begun toying with the idea recently.

NAFTA’s Labor Agreement

Last November President Obama was heckled by pro-migrant activists demanding that his administration take action to halt deportations. The President responded that he was unable to take further steps and that this was an issue Congress had to tackle.

One wonders if the President has considered using administrative changes to ease use of the North American Free Trade Agreement’s (NAFTA) labor agreement.

NAFTA dealt primarily with reducing barriers in goods and services, but it also provided for a minor reduction in barriers to labor as well. Canadian and Mexican professionals may acquire the non-immigrant TN status to work and live in the United States in renewable increments of three years. The relevant text can be found in Chapter 16 of the NAFTA treaty. Only a handful of professions are covered by the status and most of them require bachelor degrees, which means that expanding the TN status would not provide much aid to lower skilled migrant-hopefuls but it would nonetheless be a move towards more open borders.

At minimum the President’s administration could seek to ease the application process for the TN status. Currently most TN status holders leave the United States in order to renew their TN status in an US consulate or embassy in their home countries. This is costly to do and many would benefit from being able to apply from within the United States. A process to apply does exist within the United States, but it is rarely exercised due to the difficulty of doing so.

The President’s administration could also seek to allow those eligible for TN status to self-apply to renew the status without the need for cooperation from their employer. The TN status is quasi-portable; when first applying a TN holder must prove that they have a job offer in the United States but can change employers in the interluding time provided they file out some paperwork. Unfortunately the need to have their employers  help them renew their status limits the portability of the status. Allowing self-petition would remove this and make the status fully portable.

TN status is currently valid for increments of three years. The President’s administration could expand this to five or ten years. During the Bush administration the status was changed from one to three years, so Obama would merely be following in his predecessors’ action.

If the President was especially ambitious he could seek to expand the list of professions covered by the TN status. Unlike other proposals here the President would have to negotiate the terms of expansion with Mexico, Canada, and Congress. President Obama is down in Mexico discuss the future of NAFTA, could it be he is already toying with the idea of using NAFTA for a broader labor agreement?

Expansion of the TN status should be an attractive route and it is surprising that both successive Presidents and open border advocates have ignored it. The TN status  is already part of the US code (Title 8 Section 214.6) and no further enabling legislation from Congress would be necessary. The President’s administration would not be creating a new status using executive order, it would merely be easing the administration process of a well established aspect of US immigration law.

Regular opponents of increased immigration would be hard pressed to argue against expanding NAFTA’s labor provisions. The President could potentially increase the list of eligible professions, but the TN status would ultimately only benefit skilled workers. There is plenty of rhetoric against unskilled migrants, but it is rare to find the same passion against skilled migrants. The TN status does not provide a pathway to citizenship to its holder and therefore denies its holder the possibility of benefiting from most US welfare programs or voting. The types of migrants that come under the TN status are the most favorable ones; well educated middle income professionals who are here to do business.

Easing use of the NAFTA’s labor agreement could not easily be portrayed as misuse either. NAFTA was meant to reduce trade barriers between the US, Canada and Mexico. Both the letter and spirit of NAFTA would be carried out by easing the application process for the TN status. Is it fateful that the trade treaty celebrates its 20th anniversary this year.

The TN status has no numerical caps. Mexican applicants were numerically capped at its inception, but said cap was removed in 2004. Increasing the number of TN status holders would not reduce the number of visas available elsewhere and should not cause any significant backlogging of other visa applications.

In 2012 733,692 individuals were admitted into the US under TN status, mostly for short periods. Only a relative few reside in the United States for significant portions of time.

Source: DHS Yearbook of Immigration Statistics 2012

No labor certification process is required for those applying for the TN status.  The low number of TN status holders relative to the supply of potential applicants suggests that the administration is being stringent in who it grants the TN status to. It also implies that many more individuals could TN status if the President’s administration eased its application procedures.

If done properly an extension of NAFTA’s labor provisions could lead to the the three member nations agreeing to reform the treaty to include lower skilled labor as well or possibly extending NAFTA membership to the Caribbean and Central America countries. These would all be marginal moves, but they may wet  things enough for a slippery slope towards open borders in the long run.