Job Destruction Newsletter - 2005 WTO GATS Doha Round of Negotiations
Sovereignty
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JOB DESTRUCTION NEWSLETTER by Rob Sanchez January 16, 2006 No. 1401
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The 2005 WTO GATS Doha Round of negotiations in Hong Kong concluded last December so I decided to check on the progress they are making towards liberalizing guest worker visas. While they didn't come to an agreement, and there are major conflicts between developing countries like India and developed countries like the USA, they did made progress towards committing countries to a "GATS visa". In case you haven't heard of the GATS visa,
George McClure wrote a very good article about it in 2004. The title of his article says it all, and explains why you should be very concerned about what transpired during these trade negotiations.
http://www.todaysengineer.org/2005/Jan/GATS.asp GATS Mode 4: Opening World Service Markets Could Replace H-1B and L-1 Programs
In Hong Kong, the WTO Ministerial Conference agreed to amend the GATS agreement with "Annex C". The wording is quite subtle, and it's necessary to read other WTO documents to connect the dots enough to understand what they are up to.
In summation, the WTO is attempting to set up a universal visa that will be used by all GATS members. It is referred to as the "GATS visa" and supersedes all other visas such as H-1B and L-1 and will not have a numerical limit. Conditions on which a visa can be issued to guest workers will be liberalized from previous WTO proposals. The most alarming part of Annex C is that it mandates "substantial reduction of economic needs tests". Simply put, this means that employers could get GATS visas without justifications, and without regard to the economic impact on the domestic workforce. In essence the WTO is proposing is a worldwide system of global labor arbitrage that allows employers to move workers wherever they want in order to force down labor costs.
Under this type of agreement the WTO will have the power to legislate the immigration policies of member nations. Immigration disputes between nations will be decided by international tribunals - not the Congress of the United States. The only exception to this new jurisdiction would be if a member nation could convince the WTO that the increased immigration was affecting their national security.
So who how many guest workers will be affected? Don't ask the WTO because they don't know! One thing for sure, it will be a lot:
In the world there were 185 million migrants. Of those, the International Labour Organization estimated that 85 million were people who migrated for work. Within those 85 million there was a further, unmeasured subset of people who migrated for work temporarily, and within that subset there was yet a further subset which qualified as mode 4 movement. The actual numbers were unknown and probably not nearly as significant as the 185 million worldwide, but the value and potential economic contribution of that movement was quite substantial.
You may be wondering who in this equation is caring for the interests of American workers. The answer is absolutely nobody! As explained by WTO documents, there are two groups of people concerned with guest worker visas.
1) Employers who no longer want visa elgibility to be determined on the basis of whether workers will be used for manufacturing or services, or whether domestic workers are available to do the work. They want no restrictions on the type of "natural persons" that they can move around the world for the purposes of indentured servitude.
2) Unions who are concerned about protecting the interests and the rights of migrant workers, "and particularly those of lower skilled workers." In the WTOs vision of the world the unions aren't concerned with the plight of the American middle class as much as they are about low paid sweatshop workers in countries like Cambodia. Perhaps the WTO is correct considering that the AFL/CIO supports open border immigration policies.
***** WTO Definitions *****
To fully understand McClure's article, and to understand the excerpts that I included from WTO documents, it's useful to understand the terminology used by the WTO. Like all big organizations they have developed their own vernacular. Here is a quick guide, and of course you can get the official politically correct version at the WTO website. The definitions below are from a previous newsletter, so feel free to skip over them if you are already familiar with the terms.
GATS TRAINING MODULE: CHAPTER 1 Basic Purpose and Concepts
(http://www.wto.org/english/tratop_e/serv_e/cbt_course_e/c1s3p1_e.htm)
*** WTO ***
World Trade Organization. The WTO is an international organization of globalists that deals with the rules of trade between nations. Not only does the WTO make policy, it has enforcement powers through world tribunals and by imposing trade sanctions.
*** GATS ***
The WTO manages a worldwide agreement called the General Agreement on Trade in Services (GATS). This agreement was put into force in January 2000 to oversee multilateral trade negotiations. GATS was designed to control trade in worldwide services, and the people that provide the services. Some of the services that readers of this newsletter are involved in that are included in GATS are: engineering, architectural, medical doctors and nurses), computer IT, science, real estate, management, marketing, telecommunication, construction, education (K-12 and higher education), financial, banking, tourism, and transportation by ground, air, water, and space.
*** Natural Persons ***
The term "natural persons" is an Orwellian euphemism used by the WTO to describe working class people who are considered to be nothing more than mere commodities. The WTO divides the world into two groups: natural persons who provide services, and employers who need services. Most of the people who run the WTO are not natural persons, they are ultra-rich corporate entities.
*** Mode 4 ***
The four modes of the WTO are concerned with the movement and free-flow of commodities across national boundaries. Mode 4 is very important to understand because the commodity to be moved are "natural persons" that travel across national boundaries. Mode 4 seeks to eliminate all barriers to the movement of "natural persons", because restrictions due to immigration are viewed as impediments to the trade of services. Simply put, Mode 4 seeks to eliminate all immigration laws so that any willing employee can immigrate to work for any willing employer, regardless of location or nationality. (I'm not sure how much President Bush reads, but somebody obviously told him about Mode 4!) Mode 4 is where you will find requirements for temporary guest workers such as H-1B and L-1, as well as liberalization of permanent residency status for migrant workers. Full implementation of Mode 4 will commoditize all of the world's workers and will force them into global arbitrage - a situation valued by the power-elite at the WTO.
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Documents Used for this newsletter
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For the WTO documents, go to this search engine and plug in the document number.
MINISTERIAL CONFERENCE Sixth Session Hong Kong, 13 - 18 December 2005 WT/MIN(05)/W/3 7 December 2005
RECLAIMING DEVELOPMENT IN THE WTO DOHA DEVELOPMENT ROUND WT/COMTD/W/145 1 December 2005
MINISTERIAL CONFERENCE Sixth Session Hong Kong, 13 - 18 December 2005 WT/MIN(05)/32
Council for Trade in Services Special Session TN/S/W/57 6 December 2005
Council for Trade in Services Special Session TN/S/M/16 28 October 2005 REPORT OF THE MEETING HELD ON 26, 29 AND 30 SEPTEMBER 2005
http://www.workingintheuk.gov.uk/working_in_the_uk/en/homepag e/work_permits/ applying_for_a_work/gats_-_uk_contractors.html General Agreement on Trade and Services (GATS) - UK contractors
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MINISTERIAL CONFERENCE Sixth Session Hong Kong, 13 - 18 December 2005 WT/MIN(05)/W/3 7 December 2005
(d) Mode 4 (i) new or improved commitments on the categories of Contractual Services Suppliers, Independent Professionals and Others, de-linked from commercial presence, to reflect inter alia:
- removal or substantial reduction of economic needs tests - indication of prescribed duration of stay and possibility of renewal, if any (ii) new or improved commitments on the categories of Intra-corporate Transferees and Business Visitors, to reflect inter alia:
- removal or substantial reduction of economic needs tests - indication of prescribed duration of stay and possibility of renewal, if any
inter alia, the objective of sustainable development, resources
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RECLAIMING DEVELOPMENT IN THE WTO DOHA DEVELOPMENT ROUND WT/COMTD/W/145 1 December 2005
Submission by Argentina, Brazil, India, Indonesia, Namibia, Pakistan, the Philippines,
South Africa and Venezuela to the Committee on Trade and Development
the greatest gains can be made for all in mode 4
20. Perhaps the greatest gains from the Doha Round can be made for both developed and developing countries from serious efforts to liberalize the temporary movement of natural persons (mode 4), from developing to developed member countries. For example, one study reveals that an increase in developed countries' quotas on the inward movement of temporary workers equivalent to 3 per cent of their work forces would generate an estimated increase in world welfare of over $150 billion per annum. To date however developed countries have been reluctant to make any significant commitments in the WTO on mode 4 relaxation of restrictions on temporary entry. We urge developed countries to seize yet another opportunity to unlock the potential to increase global growth and the welfare of all countries.
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MINISTERIAL CONFERENCE Sixth Session Hong Kong, 13 - 18 December 2005 WT/MIN(05)/32 18 December 2005
The liberalization of the movement of natural persons or mode 4 in the area of services (GATS) is also a high priority for developing countries. Discussions on this subject have been constantly avoided and delayed by the developed countries. No progress has been made. We find this regrettable given the potential for mode 4 liberalization to directly contribute in increasing the welfare of our people, while at the same time fostering economic growth in developed countries.
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Council for Trade in Services Special Session TN/S/W/57 6 December 2005
The following communication, dated 5 December 2005, from the delegation of Pakistan, is being circulated to the Members of the Council for Trade in Services.
1. One of the principal gains from the services negotiations in the current round for developing countries lies in Mode 4 liberalization. Our stakeholders have made it clear that they expect substantial commitments in Mode 4 and we have reflected this view in our requests to trading partners. Moreover, commercially meaningful commitments in Mode 4 are central to realizing the developmental benefits in the current round of services negotiations. The Doha Work Program, as well as the 2004 July Package,
recognize the importance attached to this issue.
2. We reiterate that Mode 4 can be seen as a facilitative mechanism to match world labour demand with labour supply. For Mode 4 commitments to effectively allow developing countries to realize their export potential, free movement of temporary workers is required across the globe, rather than being confined to any particular geographical region. Mode 4 service- providers may move to host countries with ease for a short period of time and make an assured return to home countries.
3. Some Members, during bilaterals and in other fora, have referred to difficulties in making Mode 4 commitments. We feel that the concerns raised can be remedied. The following paragraphs list the issues raised by some Members and possible solutions that may address these concerns, in order to advance the discussions of liberalization under Mode 4. This paper is a continuation of earlier developing country papers presented in this body and an attempt to address the concerns raised by Members vis-à-vis their reluctance in liberalizing in Mode 4, for further discussion. (i) Non Trade / Security related concerns:
4. A few Members have voiced non-trade security-related concerns as a hindrance to making commitments in Mode 4. Nothing in the GATS prevents Members from protecting their essential security interests. A Member has the right to depart from GATS specific commitments and other obligations as security exceptions if there are valid concerns without going through the waiver or Article XXI procedures. (ii) Return home of temporary service-providers:
5. Another major concern is that such temporary workers, once in the host country, can stay on permanently. A possible solution is that such temporary Mode 4 workers move on the basis of GATS visa. Home countries can keep a data-base of all GATS visa workers who would report of their departure and arrival back home. Another measure could be that the visa holders may report to the home-country embassy in the host country on arrival and at regular intervals during their stay and on departure by phone or mail. Another less intrusive possibility could be that the employer of the worker in the host country report to the concerned authorities of the arrival and departure of the Mode 4 worker. If the home country does not have an embassy in the host country and if even more stringent assurance is required, the possibility of revalidation of the GATS visa at intervals during the period of stay may be debated. Any such measure will ensure that the temporary workers are monitored and definitely return home on expiry of their GATS visa. Such measures are in accordance with paragraph 4 of the Annex on Movement of Natural Persons Supplying Services under the GATS.
(iii) Definition of temporary:
6. Some Members are finding it difficult to distinguish 'Mode 4 temporary stay' from 'permanent migration', even though the GATS' Annex on Movement of Natural Persons states that it shall not apply to measures regarding citizenship, residence or employment on permanent basis. Consequently, the definition of 'temporary stay' is another contentious issue. Firstly, some Members have scheduled time periods for categories of Mode 4 workers in their respective schedules which makes Mode 4 movement distinct from permanent migration. Secondly, if the concept of the GATS visa (detailed in ii) is agreed upon in practice by Members, there will be no need to have a specific definition for 'temporary' as it will ensure that workers moving on the basis of such visas only enter temporarily anyway.
7. To conclude, we reiterate that Mode 4 movement does not mean migrating on a permanent basis or seeking permanent entry to the labour market of a host country. The GATS specifically excludes permanent migration as clearly stated in paragraph 2 of the Annex on Movement of Natural Persons Supplying Services under the GATS. A Paper published by the Migration Policy Institute also indicates that effective use of Mode 4 has the capacity to control immigration. Members are therefore called upon to make meaningful commitments in Mode 4 in their horizontal schedules of commitments to provide transparency and predictability to Mode 4 service-providers and liberalization gains to developing countries.
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Council for Trade in Services Special Session TN/S/M/16 28 October 2005
REPORT OF THE MEETING HELD ON 26, 29 AND 30 SEPTEMBER 2005
10. As for the trade and migration context, she noted that the mode 4 context excluded consideration of migration-related issues such as the granting of citizenship, visa policies and practices. Migration agreements, regulations and experience were nonetheless relevant, because mode 4 movement was a subset within a subset within a subset of migratory movements. In the world there were 185 million migrants. Of those, the International Labour Organization estimated that 85 million were people who migrated for work. Within those 85 million there was a further, unmeasured subset of people who migrated for work temporarily, and within that subset there was yet a further subset which qualified as mode 4 movement. The actual numbers were unknown and probably not nearly as significant as the 185 million worldwide, but the value and potential economic contribution of that movement was quite substantial.
12. As for the perspectives of employers and trade unions, their views were well known. Employers were looking primarily for more liberalized and predictable rules for the admission of foreign workers. At the seminar they had expressed the view that, for the purposes of their needs and interests, the distinction between services and manufacturing sectors was artificial, as was the distinction between temporary and permanent movement. In contrast, trade unions were focused on protecting the interests and the rights of migrant workers, and particularly those of lower skilled workers. There were currently very few mode 4 commitments related to lower skilled workers; nonetheless, possible further expansion of the commitments might cover a broader range of both sectors or levels of skill.
15. To draw on the lessons learnt in managing temporary labour migration, Julia Nielson, then of the OECD, and currently of the World Bank, had suggested that templates could be developed. These could look, firstly, at the question of transparency of entry requirements, ensuring that entry requirements and procedures be known and available to potential service suppliers and that information was exchanged between the trade and migration officials. Second, templates could include flexible access commitments, linking the level of access to unemployment ratios in the domestic market, either by sectors or with adjustable quotas. Thirdly, templates could comprise a model schedule or GATS visa, to improve predictability; without suggesting that all countries develop and adopt the same migration legislation to address mode 4, some common elements could be found that would apply across the board and effectively serve as benchmarks. Fourthly, the question of enforcement and return guarantees could be addressed by such templates, to ensure that temporary stay remained temporary, possibly drawing from elements contained in bilateral and regional agreements. Finally, the templates would cover the coordination between trade and migration policy officials to keep the dialogue going. It was suggested that such templates could be of relevance in the mode 4 context so that market access would be granted to all Members that met the criteria identified therein. In the IOM context, templates were viewed as something that could be developed outside the mode 4 context to promote better management of migration, which ultimately might also benefit WTO discussions.
94. The representative of Pakistan introduced her delegation's paper contained in Job(05)/210 on mode 4 related issues. She reiterated that the purpose of the paper was to clarify a few fears or misconceptions about mode 4, which Pakistan felt were proving to be a major hindrance in encouraging Members to take mode 4 commitments. She noted that these fears frequently arose in Pakistan's consultations with its trading partners and its stake-holders. The first was a non-trade or security-related concern. She pointed out that there was nothing in the GATS which prevented Members from protecting their essential security interests. A Member had the right to depart from GATS specific commitments and other obligations as security exceptions if there were valid concerns, without going through the waiver or Article XXI procedures. The second concern was the return of temporary service providers to their home country. The paper provided some ideas and solutions. She noted that these were not new and that she had consulted with others when formulating these ideas. One of the possible solutions was for temporary mode 4 workers to move on the basis of a GATS visa. The idea was that the home country could keep a database of this particular kind of visa which would be issued to workers around the globe. When such temporary workers moved out they would report their departure and, when they returned, they would report their arrival back home. Another such measure could be that visa holders might report to the home country and the host country at regular intervals. To avoid an overly onerous procedure, they could report by telephone or mail or some other similar means. Such measures would permit the embassy to tell migrant workers, for example, that two or three weeks remained before the end of their visa and they needed to prepare to leave. A similar but less intrusive measure could be that the employer of the mode 4 worker would inform his regulatory agency of the arrival and the departure of the mode 4 worker. As not all Members might have the presence of all embassies, the option of revalidating the visa at regular intervals could be considered, if considered necessary by the host countries. She underlined that she hoped the paper would generate debate and help inform all Members that there were solutions to mode 4 related concerns. She also noted that all these measures were within the scope of the GATS. She highlighted that paragraph 4 of the Annex on the Movement of Natural Persons did not prevent a Member from applying measures to regulate the entry of natural persons provided that such measures were not applied in a manner which nullified or impaired the benefits accruing to any Member. She noted that some stake-holders had said that they thought a definition of temporary was needed. She stressed that many Members in their schedules have already indicated periods of stay. These varied from a few weeks to five years. In such a case, there was no need to define temporary. Each Member could define temporary as it wished. Moreover, if there was agreement on some specific instrument, such as the GATS visa, there would not be any need for the definition of temporary. She reiterated that mode 4 movement did not mean migrating on a permanent basis or seeking permanent entry to the labour market of the host country. She hoped that she had cleared some of the misconceptions and invited Members to add any ideas they had on these three issues.
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http://www.workingintheuk.gov.uk/working_in_the_uk/en/homepag e/work_permits/ applying_for_a_work/gats_-_uk_contractors.html General Agreement on Trade and Services (GATS) - UK contractors
Service sectors, occupations or industries for which GATS work permits can be issued
Permits are issued for work on service contracts in the following sectors:
Legal services Accountancy services Bookkeeping services Taxation advisory services Architectural services, urban planning and landscape architectural services Engineering services* Integrated engineering services* Advertising* Management consulting services* Services relating to management consulting* Technical testing and analysis services* Translation services* Site investigation services*
GATS work permits cannot be issued for occupations or professions that fall outside these sectors.
Economic needs test
You will need to complete a GATSB form, which we will send to you once the initial work permit application from the overseas employer has been received.
For applications within the service sectors 7 marked*, you (the UK contractor) will need to justify why the contract was awarded to a non-EU service supplier. This is known as an 'economic needs test'.
You should demonstrate that the contract awarded has been advertised in a fair and open manner, in a relevant publication freely available throughout the EU. The advertisement should relate to the specific contract awarded.
The award criteria should not be so restrictive that the contract may only be awarded to a specific contractor, or to a contractor from a specific country. However, where the contract requires very specific cultural or specialist skills, evidence for these requirements should be provided.
You will also need to explain why you have decided to award the contract to a service provider outside the EU. The reasons for doing so should be consistent with requirements for the service specified in any tender for the contract.
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