Ending trade deal could boot investors
Visas allowing Canadians to invest in U.S. may vanish if Trump scraps NAFTA
WASHINGTON— Lin Keung creates jobs for Americans.
Keung, a Canadian who owns hotels and apartments, employs 120 people in Michigan, 20 people in Ohio and 25 people in Indiana.
The termination of the North American Free Trade Agreement might force him out of the United States. And it might prevent the next Keung from creating U.S. jobs in the first place.
Keung lives in the U.S. on an investor visa that is linked to NAFTA. If the deal is killed by U.S. President Donald Trump, that visa could vanish too. Collateral damage. Trump regularly urges foreign businesspeople to invest in the U.S., saying Friday at the World Economic Forum in Davos that “there has never been a better time to hire, to build, to invest and to grow in the United States” and that “America is open for business.”
But there’s a catch. The U.S. only offers the investor visa, known as the E-2, to the citizens of countries with which it has trade agreements. That means if Trump follows through on his threat to scrap NAFTA, and then he declines to bring the former Canada-U.S. bilateral agreement back to life, there would be no trade agreement with Canada on which to base investor visas for Canadians.
The U.S. would continue to offer the visa to investors from dozens of countries with which it has other agreements, from Mongolia to Serbia. In a situation Toronto immigration lawyer Joel Guberman calls “rather ludicrous,” even investors from Iran, with which the U.S. has a hostile relationship, would have access to the visa while Canadians wouldn’t.
The uncertainty around Canadians’ investor visas has received almost no coverage during NAFTA negotiations. But immigration lawyers in Canada and the U.S. say they are concerned for their current clients and future would-be investors. They and the visa-holders themselves say
“I don’t want to leave this country. I think America is very good for my business. And I think I am very good for America too.” LIN KEUNG CANADIAN OWNER OF CAUSEWAY BAY GROUP OF COMPANIES
the loss of the Canadian E-2 program would needlessly damage the U.S. economy.
Skeptics of immigration accuse many kinds of immigrants of stealing Americans’ jobs. Investors are indisputably job-makers, not job-takers. To get the visa, they need to demonstrate that their business can create a non-“marginal” benefit, which usually means showing they will hire Americans.
Toronto immigration lawyer Henry Chang said he usually deals with Canadians investing $100,000 to $250,000 (U.S.), though some E-2 investments are much larger. One lawyer who spoke to the Star said he was dealing this week with a client seeking to make a $1.7-billion investment with the visa.
Keung, formerly a Waterloo resident, said he bought his two hotels in Michigan out of receivership during the 2008 recession, then invested “close to eight figures” renovating them. He also owns apartments in Cincinnati and Fort Wayne.
He declined to say precisely what he would do without the investor visa, which allows him to live in Lansing. But he said: “If the E-2 visa is taken out, I will go find countries that welcome my investment.”
“I don’t want to leave this country. I think America is very good for my business. And I think I am very good for America too,” said Keung, owner of the Causeway Bay Group of Companies, in an interview from his Causeway Bay Hotel in Lansing. “I invest, I create jobs. And I’m one of the bridges between the two countries.”
According to the U.S. government, 20,406 Canadians — investors and their families — have received investor visas between 2007 and 2016, including a peak of 3,004 in 2016; 21,603 Mexicans received investor visas over the same decade. With Mexico’s admission into the E-2 club also based on NAFTA, their fate would be equally uncertain in the event of termination.
Unlike other visas used by skilled professionals, like the H-1B, Trump has never criticized the E-2.
“You’re dealing with a highly noncontroversial program as far as America is concerned,” said David North, a researcher at the Center for Immigration Studies in Washington, which advocates reduced immigration. “And the use by Canadians isn’t much of a controversy — any controversy at all.”
Lawyers said their Canadian clients on the investor visa own such businesses as a furniture company in Ari- zona, a Silicon Valley grocery store targeted at Indian professionals, Subway franchises, hotels, momand-pop restaurants, and manufacturers.
In some cases, lawyers said, Canadian investors could find an alternative status through which to secure access to the U.S. But for most of them, Chang said, there would be no easy way to enter the country from Canada if NAFTA were terminated.
“The best categories are all under NAFTA. There’s just no easy category to put them in, in the event the NAFTA disappears, which is why it’s a really big deal,” Chang said. “It’s not just the applicants who will lose. I think America will be at a loss if they cancel this and all the E-2 applicants shut down their businesses.”
It is entirely unclear what would happen to businesspeople, like Keung, who were already in the U.S. when a termination occurred.
It is possible that Trump would agree to allow the return of the Canada-U.S. trade agreement that was suspended when NAFTA took effect. (Some experts think that deal would come back into force automatically; others do not.) In that case, the investor visas would survive.
Trump, however, could decide to kill the old agreement as well.
In that case, investors could be forced out rapidly. They could be allowed to stay only until the completion of their current five-year visa terms. Or, perhaps, Congress and Trump could agree to a new law to protect them indefinitely.
Termination, of course, is far from guaranteed. Trump’s NAFTA rhetoric has become slightly warmer in recent weeks.
“It could go in a million different directions,” said Vancouver immigration lawyer Douglas Cowgill.
Lawyers said their Canadian clients on investor visas also include numerous professionals. One of Chang’s is Kara McCulloch, an orthodontist from Vancouver who employs seven people at the Mercer Island, Wash., practice she bought using the E-2 in 2012.
She said she doesn’t know what she would do without the visa.
“I’m no longer licensed in Canada, so I would have a hard time going back home and securing a job. I would face considerable financial hardship. Plus I have three U.S.citizen children who would no longer be close to their father if I had to take them and move them back home,” she said.
The end of NAFTA would also affect a smaller but still substantial number of Canadians and Mexicans who use the E-1 via for people involved in cross-border trade. That visa is also dependent on having a treaty with the U.S. Since 2010, 3,304 Canadians and 8,971 Mexicans have obtained the E-1.
A spokesperson for Foreign Affairs Minister Chrystia Freeland did not respond to a request to say whether the E-2 or E-1 visas have been discussed during NAFTA negotiations.