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According to a news agency report from Geneva, a study in the WTO's 2004 World Trade Report, released the other day, found "significant" potential economic and trade gains from the liberalisation of labour flows under the Organisation's General Agreement on Trade in Services (GATS).
However, since GATS is not a uniform agreement and relies, instead, on each of the 147 WTO members setting their individual criteria for access to their markets, through negotiations, little wonder they have been censured by campaigners for failing to remove barriers to labour, at the same time as they liberalised trade.
But the lapse, on this count, may be attributed, as well, to reluctance of many governments to deal with the politically charged issue at the international level. Reference, in this regard, has been made to other complaints too.
They include the lamentation that trade liberalisation has encouraged multinationals to move factories to cheaper locations abroad, thereby, dropping off jobs at home, while also encouraging poor labour standards and wages. It will, however, be noted that the limited GATS provisions constitute the only WTO agreement on liberalising the flow of labour across borders in the same way as it eases barriers to goods and services. Yet the fact remains that it is an area that has yet to be tapped.
As such, understandable should be the World Trade Report's conclusion that extending categories and skill levels in members' offers during the GATS negotiations could significantly affect temporary movements of labour, as also the gains accruing to both the sending and receiving countries.
It is, however, just another matter that most of the effects outlined in the study will be found to be positive. For one thing, it is held that temporary labour liberalisation could generate annual gains of 150 billion to 200 billion dollars, as benefiting both the developed and developing countries.
However, at the same time, it is noted that this would result mainly from the movement of low-skilled workers rather than the high skilled. The report noted that GATS only covered temporary employment of services workers in a foreign country and not permanent access.
But WTO member states have shown wide differences in their interpretation of "temporary", ranging between three months and five years, during negotiations on a new services deal.
The study has supported, in particular, initiative for the rich nations opening up to more extensive temporary migration for workers, saying it could benefit both the countries of origin and the hosts.
Currently, a section of GATS - "mode four" - focuses mainly on allowing multinational companies executives' or business visitors' short-term access to company bases abroad.
On the contrary, the developing countries have been trying, in their own light, to get richer nations to admit both unskilled and skilled temporary services workers.
Needless to point out, relevant reference, in this regard, has been made to occasions in the past when recourse was taken to this approach.
For instance, it has been recalled that a surge in demand occurred in Britain for skilled labour from India and the Philippines, respectively, for computer specialists and health workers in the late 1990s.
It will, however, be noted that this year's World Trade Report, the second in a new series is "designed to deepen public understanding of trade and trade-related policy issues and to contribute to more informed consideration of the options facing governments", as WTO Director-General, Supachai Panitchpakdi, has pointed out in his foreword.
As for the need for coherence, he will be seen to have laid due emphasis on several key issues, including macroeconomic policy, the quality and cost of infrastructure services, policies affecting domestic market structures, and the integrity of institutions.
All this, put together, will point to the need for both the developed and developing countries seriously and objectively comprehending the labour migration issues in the emerging new trade scenario.
For relegating it to the background can certainly prove counter-productive, all the more so in the light of Panitchpakdi's explicit warning that failure or neglect in one area spells disappointment in others.

Copyright Business Recorder, 2004

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