Movement of natural persons and the GATS

Abstract

One of the great bargains during the Uruguay Round's trade in services negotiations was the idea that developed countries would gain market access for their services companies in developing countries (investment or Mode 3) while developing countries would benefit from sending individual service suppliers to developed countries (temporary migration or Mode 4). While this bargain existed in theory and on paper, it did not materialize in practice. This is mostly due to limited commitments in Mode 4 from developed countries. This point is made and elaborated upon by economist Rupa Chanda in Chapter 5, which examines the fundamentals of the movement of natural persons in the GATS. She also shows that there is a bias in the commitments towards higher level personnel (business visitors and intracorporate transferees such as managers) which means that Mode 4 commitments are more often than not commitments linked to commercial presence (Mode 3). Commitments that would provide market access to self-employed individuals from developing countries or even allow workers from developing countries to seek (temporary) employment abroad are rare if not non-existent. Remedies for this imbalance would require increased and better structured commitments in relation to Mode 4, in particular from developed countries. To facilitate this, a GATS visa could be issued which would also address the concern of many developed countries that temporary migration may turn into permanent migration. Another remedy could be strengthened norms on recognition of qualifications and experience. The problem of limited Mode 4 commitments highlights a central problem of the GATS: its actual impact on economic opportunities depends to a large extent on commitments made during negotiations; the contents and level of these commitments reflect the relative power of the countries in question in the context of trade negotiations. The last challenge for the law on trade in services that we address in this volume concerns the rules of the GATS on non-discriminatory measures of domestic regulation such as qualification and licensing requirements or technical standards. Of the GATS rules on domestic regulation, art. VI:4 GATS is especially relevant. It entitles the Council for Trade in Services to establish disciplines on domestic regulations to ensure that these regulations do not constitute unnecessary barriers to services trade. 6 WTO Members have been negotiating about such disciplines since 1999 in the Working Party on Domestic Regulation (WPDR). One of the most contentious issues of these negotiations has been the question as to whether and to what extent these disciplines should contain a general necessity test. Such a test would require that domestic regulations are 'not more burdensome than necessary to ensure the quality of the service'. The debate about the necessity test lies at the heart of the question about the impact of the GATS on domestic regulation.