GATS 2000: New Directions in Services Trade Liberalization

By Pierre Sauvé; Robert M. Stern | Go to book overview

COMMENT BY

Ken A. Richeson

Nothing is more central to the promotion of trade and investment than the ability of business people to move freely around the world. Allison Young tackles this important subject by describing the current state of play on the issue of labor mobility. She begins her discussion with a definition of "mode 4," one of four ways in which the delivery of professional and business-related services is contemplated under GATS. Mode 4 is defined as "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" (Article 12 (d)). Because mode 4 represents the first attempt by multilateral trade negotiators to liberalize the movement of natural persons who provide services, this definition can shed light on the present and future role of labor mobility in the World Trade Organization (WTO).

As Young points out, by addressing "behind-the-border" concerns, mode 4 raises complex regulatory issues regarding immigration and labor market development. During the Uruguay Round, she notes, developing countries took the position that "services supplied by the movement of people across borders is as legitimate a concept of service supply as commercial presence." It is for this reason that developing countries have suggested that an occupation services list could be used to negotiate occupations and service sectors in which "economic needs" or "skill level" tests would not apply as a means of limiting entry.

As is well known, little progress was made during the Uruguay Round or in the follow-up negotiations concerning the movement of natural persons. Commitments under mode 4, whether horizontal or sectoral, are significantly less extensive than in the other three modes. In most cases, where commitments have been made, they only bind the "status quo" and break no new ground.

To remedy this situation and provide the basis for moving forward, Young suggests that mode 4 be defined more clearly, in order to make the trade-offs in the negotiation process more transparent. In addition, WTO members need to agree to comprehensive peer reviews whenever mode 4 commitments are undertaken. Members are urged to increase transparency by explicitly stating the public policy objective of any restrictions. Young also calls on members to develop a parallel list that identifies those service occupations relevant to the delivery of services via mode 4, create technical

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