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JOINT WTO-WORLD BANK SYMPOSIUM ON MOVEMENT OF NATURAL PERSONS (MODE 4) UNDER THE GATS WTO, Geneva, 11-12 April 2002 PowerPoint PPT Presentation


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JOINT WTO-WORLD BANK SYMPOSIUM ON MOVEMENT OF NATURAL PERSONS (MODE 4) UNDER THE GATS WTO, Geneva, 11-12 April 2002. Temporary Entry of Natural Persons as Service Providers: Issues and Challenges in Further Liberalization under the Current GATS Negotiations Richard Self B.K. Zutshi.

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JOINT WTO-WORLD BANK SYMPOSIUM ON MOVEMENT OF NATURAL PERSONS (MODE 4) UNDER THE GATS WTO, Geneva, 11-12 April 2002

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Joint wto world bank symposium on movement of natural persons mode 4 under the gats wto geneva 11 12 april 2002

JOINT WTO-WORLD BANK SYMPOSIUM ONMOVEMENT OF NATURAL PERSONS (MODE 4)UNDER THE GATSWTO, Geneva, 11-12 April 2002

Temporary Entry of Natural Persons as Service Providers:

Issues and Challenges in Further Liberalization under the Current GATS Negotiations

Richard Self

B.K. Zutshi


Outline of the presentation

Outline of the Presentation

Introduction

Section 1

Mode 4: Scope and Coverage

Section 2

Mode 4: Specific Commitments to-date

Section 3

Issues and Challenges in Current Negotiations

Section 4

Conclusions and Recommendations


Introduction

INTRODUCTION

1.Background to inclusion of services in the UR negotiations

2.Bringing GATS into the WTO

3.Outcome in terms of liberalization in general and under Mode 4, in particular

4.Issues in Mode 4 liberalization


Section 1 mode 4 scope and coverage

Section 1Mode 4: Scope and Coverage

•Definition of Trade in Services

a)Negotiating History

b)Emergence of the Modal Approach to the definition

c)Parity/Symmetry in Factor Movement

(i)Specificity of purpose

(ii)Discreteness of transactions

(iii)Limited duration

(iv)Essentiality caveat

d)Modal Approach embedded/implied in the principle of parity in factor movement


Section 1 mode 4 scope and coverage cont d

Section 1Mode 4: Scope and Coverage (Cont’d)

•Annex on Movement of Natural Persons as Service Suppliers

a)Coverage of self employed and of employees of service supplier associated with Mode 3

b)Temporary movement, Period not defined

c)Exclusion of access to labour market, citizenship, etc.

d)All categories of Natural Persons at all skill levels covered subject to commitment negotiations

e)Flexibility in the application of visa restrictions

f)Illustrative list of categories of Natural Persons as service suppliers

•Ambiguity in definition through distinction between service supply and employment on the basis of the nature of engagement?

•Foreigners employed by host entities.


Section 2 mode four specific commitments to date

Section 2Mode Four Specific Commitments to Date

  • Uruguay Round Commitments in Mode 4

    -Senior Managers and Executives in overseas affiliates

    -Services Sales persons (who cannot provide services)

    -Other commitments on a limited scale and exclusively confined to workers at the highest skill level.


Section 2 mode four specific commitments to date cont d

Section 2 Mode Four Specific Commitments to Date(Cont’d)

  • A comparison of specific commitments in mode four compared to those of other modes

    -Most countries made mode four commitments

    -They inscribed them horizontally

    -Only 50% of services sectors covered by developed countries;

    -11% of services sectors covered by developing countries

    -Quality of mode four commitments generally less than that of mode three.


Section 2 mode four specific commitments to date cont d1

Section 2 Mode Four Specific Commitments to Date(Cont’d)

  • An assessment of commitments (Cont’d)

    -94% of entries covered senior managers et al, and business visitors

    -Most commitments reflected Standstill “Minus”

    -No roll-back

    -Can balance of interests be assessed by examination of four modes -- problems of data and perceived interests among countries.


Section 2 mode four specific commitments to date cont d2

Section 2 Mode Four Specific Commitments to Date(Cont’d)

  • Political and Regulatory concerns profoundly affected levels of commitments under Mode Four

    -Enforcement concerns and the problem of temporary entry leading to permanent entry

    -Protection of labour markets associated with lower pay foreign services suppliers.


Section 3 issues and challenges in current negotiations

Section 3Issues and Challenges in Current Negotiations

a) Article XIX: Rules of Engagement

b)Negotiating Guidelines

c)Scheduling Guidelines


Section 3 issues and challenges in current negotiations cont d

Section 3Issues and Challenges in Current Negotiations (Cont’d)

Substantive Market Access Issues

• Present Situation

• Ways to promote further liberalization

1)Widen and Deepen Commitments under Mode 4

2)Classification of Natural Persons for negotiations and scheduling commitments: Issues and Prospects

• Greater clarity in developing rules and commitments

1)Separating temporary movement and stay of natural persons as service providers within regulations on visas and work permits: Issues and prospects

2)Clarity and precision in scheduling commitments: Ways of achieving this objective


Section 3 issues and challenges in current negotiations cont d1

Section 3Issues and Challenges in Current Negotiations (Cont’d)

DISCIPLINES ON DOMESTIC REGULATIONS: ARTICLE VI:4

• Regulation a sine quo non in services

• Objective of disciplines under Article VI:4: To address disguised restrictions

•Disciplines in the Accountancy Section

•Present status of work in WGDR

•Checklist of issues: Necessity, Transparency, Equivalence and International Standards

•Horizontal v/s sector-specific disciplines?


Section 3 issues and challenges in current negotiations cont d2

Section 3Issues and Challenges in Current Negotiations(Cont’d)

Other Relevant Issues

1)Recognition

2)Wage Parity

3)Social Security


Section 3 issues and challenges in current negotiations cont d3

Section 3Issues and Challenges in Current Negotiations (Cont’d)

  • Negotiating techniques to improve mode four commitments

    -Continuation of horizontal (Uruguay Round) approach or a mix of horizontal/sector specific

    -Advantages to horizontal approach in light of its consistency with national regulatory regimes

    -Formula and Model Schedule Approaches

    •Formula requires uniform level of commitments by all


Section 3 issues and challenges in current negotiations cont d4

Section 3Issues and Challenges in Current Negotiations(Cont’d)

  • Negotiating Techniques (Cont’d)

    -Model Schedule Approach: Proposes a template around which countries negotiate different levels of obligations

    •Model Schedule currently in circulation by private sector groups centering around “GATS Visa” and best practices provisions

    •Advantages of flexibility to a model schedule and its discipline over request and offer


Section 4 conclusions and recommendations

Section 4Conclusions and Recommendations

Objective of the Paper

Effort designed to introduce the issue of mode 4 liberalization for a comprehensive discussion among the participants and promote a better understanding of problems and prospects of this area

Conclusions

The analysis in the paper points to following important conclusions:

1)Modal approach to definition is a reflection of some basic concerned of the participants: For developing countries parity in the treatment of factor movement of capital and labour and for developed countries the assurance that investment in services is a part of a trade framework


Section 4 conclusions and recommendations cont d

Section 4Conclusions and Recommendations (Cont’d)

Conclusions (Cont’d)

2)The notion of parity between factor movement has to find a reflection in liberalization of market access opportunities under modes 3 and 4

3)The current level of scheduled commitments, except in the telecom and financial services sectors, reflect modest liberalization. In case of mode 4, even more so i.e. hardly any liberalization

4)In order to secure a big liberalizing package overall in this Round, the outcome will have to produce significant improvements in mode 4 liberalization by way of providing effective market access.


Section 4 conclusions and recommendations cont d1

Section 4Conclusions and Recommendations (Cont’d)

Conclusions (Cont’d)

5)Otherwise, GATS might end up as a “grim harvester of autonomous liberalization in services rather than a catalyst for future liberalization”

6)The present seems a propitious time to attempt a significant improvement in effective market access liberalization under mode 4


Section 4 conclusions and recommendations cont d2

Section 4Conclusions and Recommendations (Cont’d)

Recommendations

In the backdrop of these main conclusions we would recommend the following steps, at the minimum to realize greater liberalization and effective market access under more 4

1)To negotiate market access and national treatment commitments from a common template that is sufficiently flexible for parties with differing interests and varying levels of ambition.

2)To mount a priority effort to gain a single text of agreed commitments that would improve the transparency of granting temporary entry to service providers.


Section 4 conclusions and recommendations cont d3

Section 4Conclusions and Recommendations (Cont’d)

Recommendations (Cont’d)

3)To aim to arrive at a generally agreed formulation as to the skill levels of workers affected by the temporary entry negotiations, as a part of the negotiating process itself.

4)To impart greater clarity to rules and commitments by negotiating guidelines for the application of rules, and conditions to market-access commitments.


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