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[Baobab]

68. Why pay workers some percentage is US prevailing wages (H1B visas) when you can

wait a year or two and pay them a fraction of that under an L1 under these new agreements with no quotas on numbers.

No necessity tests, no economic means tests,

You can find some outlines on movement of natural persons provisions from Hamid Mamdouh, Director, Trade in Services Division, WTO

This is from 2004, so a lot has changed since then..

Definition of Trade in Services:
(1) Cross border supply
(2) Consumption abroad
(3) Commercial presence
(4) Presence of natural persons


The supply of a service by:

“a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member”


MOVEMENT OF NATURAL PERSONS UNDER THE GATS

Hamid Mamdouh
Director
Trade in Services Division, WTO

Article I – Scope and Definition
Definition of Trade in Services:
(1) Cross border supply
(2) Consumption abroad
(3) Commercial presence
(4) Presence of natural persons
Mode 4 - Article I definition
The supply of a service by:

“a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member”

What natural persons?
Natural persons who are service suppliers of a Member
Self-employed

Natural persons of a Member who are employed by a service supplier of a Member and sent abroad to supply a service
For the ‘same’ company which has commercial presence in another Member’s territory (Intra-corporate Transferees)
To a consumer in the territory of another Member. The contract is made between the home and host companies (juridical contractual service supplier)
The Annex on
the Movement of Natural Persons
The GATS does NOT cover:
natural persons seeking access to the employment market
measures regarding citizenship, residence or employment on a permanent basis
Governments are free to regulate entry and temporary stay, provided these measures do not nullify or impair the commitments
footnote 1:differential visa requirements, not to be regarded as nullifying or impairing benefits under a specific commitment
A snapshot of Mode 4 commitments
Governed by horizontal commitments
Positive listing of measures:
“Unbound except ...”
Absence of full liberalization
Access mostly for those with high-level of training and expertise, often as intra-corporate transferees
Specified duration of stay: 3 months to 5 years

Main limitations scheduled
Limited Categories of workers included
Pre-employment requirements
ENTs/LMTs
Quotas
Technology Transfer

Structure of Horizontal Commitments
(110 Members, as of 2004)

Movements linked to Mode 3: ~60%
Contractual Service Suppliers (employees of juridical persons): ~13%>
Independent suppliers: ~6%>
Length of stay: 3-5 years for ICTs; shorter for CSS: 3 months - 1 year (very few with > 2 years
Possible reasons for the less liberal commitments in Mode 4
Political and Regulatory concerns profoundly affected levels of commitments under Mode Four for all Members
Enforcement concerns and the problem of temporary entry leading to permanent entry
Protection of labour markets associated with lower pay foreign services suppliers.

Negotiating Proposals
7 specific proposals
Developing economies- India, Colombia, Kenya
Developed economies - EC, US, Japan, Canada
Other sector-specific proposals relate to Mode 4, e.g., professional services
Some of the barriers identified
in the negotiating proposals
Structure and coverage of existing commitments
ENTs
Definitional problems
Administrative practices, access to information and transparency
Recognition of qualifications
Some of the solutions proposed...
More and better commitments
more categories, improved definitions, finer classification, “sector-specific” commitments
Removal of barriers
multilateral criteria for ENTs - to be more specific, transparent and non-discriminatory
Greater transparency and predictability
Model Schedule/“GATS visa”
Additional Commitments on transparency and regulation
Strengthened disciplines on MRAs
Mode 4 in Offers so far…*
Horizontal commitments: 17 of the 45 offers include changes to the horizontal section.
2 Members did not include Mode 4 commitments in their horizontal section
In addition, 122 existing sector-specific commitments 14 Members) improved, mostly in business services
Types of Improvement
Inclusion of new categories of natural persons/broadening coverage of definition
Expansion of sectoral coverage/additional sectors to which the service could be provided
Defining/extending the period of stay; providing for renewability of permits
Clarification of the application/reduction of the scope of ENTs/LMTs
Some improvements in the NT column
Some entries in the AC column
State of play of negotiations
Number and quality of offers is thus far unsatisfactory including on Mode 4
New initial offers to be submitted as soon as possible
Revised offers to be submitted by May 2005
CTS to conduct review of progress in negotiations before the 6th Ministerial
Sixth Ministerial Conference to be held in Hong Kong in December 2005.


The Mode 4 debate
Informal discussions concerning Mode 4 issues have been held within the Special Session of the Services Council in the “September cluster”
The work of other Services negotiating bodies (WPDR) is also touching upon issues of relevance to Mode 4

The Mode 4 debate
Some issues currently being discussed:

Categories of natural persons used in GATS schedules of commitments and their consistency with domestic measures
Complementarity of horizontal and sectoral commitments on Mode 4
The need to improve the transparency of Mode 4 commitments and domestic regulatory frameworks
Recognition of qualifications
Administrative procedures relating to visa and work permits
The Way Ahead
The GATS reality as a treaty among governments
Importance of pursuing liberalization of Services trade
Mode 4 – a trade concept part of a much broader picture
The need to bridge the conceptual gap between trade and migration
The need to take account of non-trade policy concerns.
Pursue negotiations on Mode 4 on multiple fronts under the GATS (commitments, additional commitments on transparency and regulatory issues, rules)


THANK YOU