A Surefire Doha Show-Stopper: Mode 4, Cont'd.

♠ Posted by Emmanuel in , at 5/16/2008 01:04:00 AM
Here we go again: With regard to old-fashioned trade in goods, developed countries want non-agricultural market access (NAMA) in less-developed countries (LDCs). Meanwhile, LDCs are adamant on not moving unless agricultural market access becomes more of a reality in heavily protected and subsidized Western countries.

When it comes to services, we have something similar going on. Developed countries want greater access to service areas such as banking and telecoms in LDCs, yet are unwilling to move on the main demand of LDCs when it comes to services which is better access to developed markets by temporary workers in line with Mode 4 of the GATS. I recently posted on this matter, noting that developed country concessions on Mode 4 migration are unlikely to come to pass anytime soon as it is regarded more as an "immigration" matter than a "trade" matter. Reuters has more on this issue but makes the same comment that a deal on temporary migration is not forthcoming in the WTO's Doha round:

Global trade negotiations on the services sector are likely to make little progress on a core demand of developing countries -- greater freedom of movement for temporary workers, an expert said on Thursday. The forecast, if confirmed, suggests rich countries will struggle to crack open new markets for services from banking to telecoms, in return for which poor nations want to see rules on temporary workers liberalised.

Rupa Chanda, an economics professor at Bangalore's Indian Institute of Management, said countries preferred to negotiate temporary labour movement bilaterally, rather than in the global Doha round talks at the World Trade Organisation (WTO). "Some of these issues are so complex to discuss multilaterally that bilaterally you would expect much more progress," she told a news conference.

Chanda said there was some chance of liberalisation for temporary workers at the executive or management level in a WTO deal, but little prospect for low-skilled workers. She was speaking at the launch of a report she compiled for the United Nations Development Programme (UNDP) on temporary cross-border movement of service providers, known in trade jargon as Mode 4.

"WTO member countries have shown little interest in liberalising market access to labour flows for the low-skilled workers on a multilateral basis, and they are reluctant to make binding commitments since migration has a bearing on sensitive issues such as national security, integration and unemployment," the UNDP said in a statement.

National security concerns are a particular problem for the United States in letting in more temporary workers from developing countries.

European officials say they are willing to negotiate Mode 4 at the WTO, but need to clarify issues such as defining "temporary" and looking at the impact on domestic wages of an influx of low-skilled workers from poor countries.

David Luke, UNDP coordinator for trade and human development, said developing country representatives at a workshop on the report on Wednesday had not been optimistic about a WTO deal on Mode 4. "Their message to the workshop was their disappointment over the limited progress," he said.

Chanda said WTO negotiators could learn from aspects of the more successful bilateral deals on temporary labour movement. Such deals specify which sectors and type of workers they cover, the duration of their stay and its conditions. They also define the agencies in both the source and host countries that will be involved and coordinate with each other.

Successful arrangements involve the source country handling recruitment, rather than intermediaries or agents who can end up exploiting or abusing temporary workers. They also manage financial remittances sent home, sometimes involving forced savings, to encourage workers to return home.

Schemes to move low-skilled workers from South or Southeast Asia to the Gulf often lacked these institutional arrangements, leaving workers open to exploitation, Chanda said. Women were particularly at risk, with those working outside the visible labour force, such as maids in the Gulf or Singapore, vulnerable to abuse, she said.