Labour Movement and International Trade : Labour Movement and International Trade WTO, FTAs and Bilateral Labour Market Access Agreements


Why does this matter? (Bilateral vs. Multilateral schemes): Why does this matter? (Bilateral vs. Multilateral schemes) A New Bilateralism is emerging that is outside of WTO context. Bilateral Labor Market Access Agreements (BLMAA) FTAs covering visas Temporary Movement and migration are very important sources of forex earning for many Pacific Forum Island economies (Tonga & Fiji) Increasing discussions on temporary movement arrangements for workers from developing countries to developed countries (Canada, US guest worker schemes, ANZ fruit pickers) Aging OECD populations mean that labour movement issues will become more important over the next 25 years WTO Compatibility of such arrangements i.e. BLMAA vis.a.vis regional economic integration agreements.


Is Migration Covered by WTO ?: Is Migration Covered by WTO ? Scholars agree that permanent movement is clearly outside the WTO. Temporary movement arrangements can be seen as either inside or outside. If it is time bound and sector specific it is more likely to be subject to WTO. Are temporary workers in the tourism sector covered by GATS but those in agriculture, not covered? Many WTO members including USA, EU, NZ and Canada have listed various bilateral labour market schemes in their MFN exemption schedule


The WTO MFN Exemption Schedule : The WTO MFN Exemption Schedule At the end of the Uruguay Round WTO members agreed to exempt their WTO violations- it was not intended to be indefinite ‘In principle’ these should continue for 10 years i.e. 2005 and in any case there should be negotiations i.e. built-in agenda Has been reviewed twice and members disagree about the future of MFN exemptions


(i) Bilateral Labour Market Access Agreements: (i) Bilateral Labour Market Access Agreements OECD countries maintain 180 such agreements and the number is rising. Many advanced ‘developing’ countries e.g. Korea, Malaysia, South Africa and the Gulf states import labour and have such agreements with source countries These are often negotiated by immigration and foreign affairs officials with no trade officials participating These are temporary, sector specific and often quota based.


Examples of BLMAA: Examples of BLMAA Canada Seasonal Agricultural Worker Scheme Extends to 13 countries – Mexico and 12 Caribbean countries for 19,000 workers per season in 2005 Scheduled as an ‘indefinite’ MFN exemption in Canada’s schedule Considered as ‘state of the art’ labour agreement’ Mexican provisions could be brought under NAFTA, Caribbean market access needs new arrangement


Examples of BLMAA: Examples of BLMAA US Seasonal Agricultural Scheme (H-2A) Visa (Bilateral or Multilateral?) USA issued 28,000 H-2A visas in 2001, 79% were for Mexicans and 13% for Jamaicans US scheme is not based on quotas and is open to all WTO members , in theory. As a result, unlike the Canadian scheme it requires no MFN exemption In practice the US requires the employer to cover the cost repatriation of the employee and therefore only proximate sources of supply are commercial Unless challenged the US scheme is WTO compatible Bush administration wants to create a ‘humane guest worker scheme’


Examples of BLMAA: Examples of BLMAA Kiribati and Tuvalu model for seafarers for which maritime training were undertaken and funded as early as the 1960’s and 1970’s by the UK, UNDP, British and German shipping companies. Arrangement not entered into EC’s WTO MFN Exemption List


Examples of BLMAA: Examples of BLMAA NZ’s bilateral maritime arrangements with Tuvalu and Kiribati More favourable entry conditions applied for up to 20 nationals per annum from Kiribati and up to 80 nationals at any one time from Tuvalu NZ scheduled this as a Mode-IV inconsistent measure in its WTO MFN List of Exemption plus of ‘indefinite duration’.


Are BLMAA’s WTO Compatible?: Are BLMAA’s WTO Compatible? If they are listed as an MFN exemption and a panel considers 10 years to be the length of time they were expected to exist then ‘no’ They require waivers if they are to be expanded. If no agreement in the current round Panel may have to rule on MFN exemptions of ‘indefinite’ duration


(ii) FTA’s and Labour Movement Issues : (ii) FTA’s and Labour Movement Issues US-Chile & US-Singapore FTAs US has attempted to extend visa and labour market issues until the US-Chile and US-Singapore FTAs. US congress carved out 6,400 visas allocated in these FTAs from MFN quota of ‘up to’ 65,000 H-1B visas provided under GATS. This is of questionable WTO compatibility Who could challenge- most H-1B visas are allocated to Indian and Chinese nationals Since Singapore –US and Chile –US there have been no bold migration measures in US FTAs


FTAs and Labor movement Issues: FTAs and Labor movement Issues New Zealand-Singapore Closer Economic Partnership Agreement (NZ-Singapore EPA) Art.17 – Market Access Art.18 – National Treatment Art 19 & 20 - Commitments Singapore-Australia Free Trade Agreement (Singapore-Australia FTA) Sect.11 – ‘movement of business people engaged in conduct of trade and investment’


FTAs and Labour Market Access: FTAs and Labour Market Access The most recent FTA between Japan and Philippines (not yet implemented) has important provisions for nurse mobility. It is understood that there are differences over whether there should be numerical quotas Japan-Philippines is potentially a new generation of agreements Some WTO issues over whether it is possible to impose numerical quotas on service suppliers.


How do we make FTAs and BLMAAs WTO compatible: How do we make FTAs and BLMAAs WTO compatible Economic Integration Agreements (GATS Article V) Labour Market Integration (Article Vbis) Negotiated solution on MFN exemptions (unlikely) Waivers for on-going MFN violations


Conclusions : Conclusions Labour market access issues will become more important as OECD and Chinese population ages. Need to address this through an appropriate framework either bilaterally through FTAs or multilaterally. TMNP for skilled/semi-skilled/unskilled workers – BLMAA or ANZ-FIC FTA under PACER Visa Quotas also needs to be addressed.