- The Washington Times - Sunday, January 2, 2005

During the International Organization for Migration talks in Geneva last month, special correspondent John Zarocostas interviewed Abdel-Hamid Mamdouh, director of trade in services at the World Trade Organization (WTO).

Question: The “Doha round” of global trade talks also is focusing on temporary labor migration — sometimes called “the movement of natural persons” — and professionals across borders. Please tell us about this.

Answer: What we call mode 4 — or the movement of natural persons — … and their temporary stay in services export markets is one way of exporting services.

So the WTO’s General Agreement on Trade in Services (GATS) deals with services trade, and therefore, deals with the movement of people as well as investment, only in an incidental way.

It’s very important to make this point clear: The GATS is not liberalization of labor mobility. It’s about liberalization of services trade. So it deals with the movement of persons only to the extent to which it is necessary for the supply of the service.

However, whenever you’re dealing with people moving from one country to the other, residing and working, you’re inevitably dealing with regulations — the laws that deal with immigration and labor. So, you immediately get into questions of — not immigration policy in a broad sense — but immigration regulations, administrative procedures like visas and work permits and so on.

Now, that overlap has created a certain degree of confusion about what mode 4 is about. But the reality is, mode 4 is a subset of a subset of the migration picture. It is a very important point of the WTO services negotiations for a number of reasons. But there are inherent difficulties in achieving binding commitments because of the compartmentalization of regulatory cultures within the same country.

Immigration regulators are not used to speaking to trade negotiators and vice versa. Now that created a gap.

Q: How would a [mode 4] agreement that has a critical mass of offers enhance global commerce, and what are the business world’s concerns?

A: Some relate to the liberalization of mode 4 trade, such as opening markets of professional services like legal services, accountancy, software specialists and even lower-levels skills such as nurses, providing more opportunities for suppliers of such services to export their services through their residence in the export market. We need more of them.

When we look at mode 4, there are two types of situations in which people move. One, where the person is an employee of a supplying company — like a manager of a bank or an insurance company, or a specialist. And the second is what we call independent service suppliers. The person himself is a service supplier.

The problem so far in the negotiations is that we have not had many commitments on the later category of independent service suppliers — actually, very few.

Q: Are migration laws lagging behind developments in the world economy, and is that an impediment to efficiency?

A: It is an impediment from the liberalization of services point of view.

But if you look at the broader picture, I think immigration policies are being designed to fulfill the needs countries face now.

If you look at the industrialized countries, the need is quite acute with aging population pressure on social-security systems. Developed countries, if they want to achieve the levels of growth they aspire to, would have to beef up their labor force. So that means they need to get people from other countries.

But that is a strategic picture. Services are much narrower than that, and what you face in services actually is that immigration policies and regulations do not really recognize mode 4 service suppliers. They don’t appear on the radar screen.

We need to put mode 4 on the radar screen of immigration regulators.

Q: What would a WTO agreement on “the movement of natural persons” deliver?

A: We’re looking at a variety of categories. We’re looking at what we call intercorporate transferees. These are people who work in a parent company and are transferred to a subsidiary, or a branch somewhere else.

We’re looking at another category, what we call contractual service suppliers. These are people who sign contracts to supply a service, like a software specialist, engineers or any service supplier who has a contract for a finite period of time.

All categories of mode 4, by definition, are about temporary stay — which means what you are committing to liberalize would be the temporary period of the stay that each country would define. Whether it’s two, three or five years, it’s up to them.

But sometimes some of those stays turn permanent, and they go out of the coverage of the agreement itself.

Q: Are the talks keeping pace with rapid changes?

A: The negotiations are not going well. There has been a great deal of complacency at the beginning, and now we are looking at the current picture of initial offers, and what we see on the table is very, very, poor.

Q: What are the potential benefits for developing and industrialized countries?

A: I think we can see a lot of benefits. I think we can see there is tremendous demand, and there is a shift in competitiveness and in the level of skills and in the supply capacity in developing countries.

Both developed and developing would benefit. You can look at the position of private industry in the U.S. trying to promote the liberalization of mode 4 service suppliers in the United States. Obviously, it reflects the interests of companies to maintain their competitiveness by doing the same job at the same level of competence at a much lower price.

Q: Are we looking at tens of millions of people moving around in the future?

A: Ah, yes — it could be hundreds [of millions] if we liberalize. But the problem with mode 4 is regulatory reform. Because you’re not going to allow service suppliers to come and reside in country X unless you have [the ability] to monitor them.

Q: How much have security concerns in the post-9/11 period taken the steam out of the negotiations?

A: Security concerns have had a chilling effect in the negotiations. I think security concerns have taken a very, very high priority in the minds of policy-makers, as always. But I think the concerns now are much higher because there are more threats than we have seen before, and moving people is one of the most sensitive issues when it comes to security concerns.

But what we are negotiating here is trade commitments that hopefully will last for decades to come. The security concerns that we have now are hopefully very, very, temporary. And the legal framework of the GATS allows countries to deviate from their commitments and obligations in any way they see fit in order to protect their security. You can even have them [commitments and obligations] suspended.

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