Movement of Natural Persons under GATS - Mode 4: Migration, Development

and Labour Regulation

Dr. Ibrahim AwadDirector

International Migration ProgrammeILO

UN Economic and Social Commission for Western Asia

Cairo, 05-06 September 2007

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GATS - Mode 4

Provides a legal basis for the movement of workers to meet demand for labour in countries of destination. These countries do not incur social and financial cost of integration.

This movement can contribute to development in countries of origin. These countries do not lose their workers permanently.

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Migration, Development and Labour Regulation

Mode 4: Services supplied by a service supplier of one Member, through the presence of natural persons of a Member in the territory of any other Member.

The contention is that this not about labour migration.

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Migration, Development and Labour Regulation (II)

Development: The contention is that GATS- Mode 4 will increase remittances and contribute to development in countries of origin.

Labour Regulation: The Annex provides that the Agreement shall not apply to measures affecting natural persons seeking access to the employment market of a Member, nor shall it apply to measures regarding citizenship, residence or employment on a permanent basis.

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GATS - Mode 4: the ILO perspective

GATS – Mode 4 can be considered from a complementary perspective to that of trade.

This complementary perspective should enrich the debate and contribute to making GATS - Mode 4 more responsive to the interests of all States.

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GATS - Mode 4: the ILO perspective (II)

ILO Declaration of Philadelphia (1944): Labour is not a commodity.

Goods are one-dimensional, have predictable impacts and their border movement can be regulated fairly effectively by border controls.

People are multi-dimensional as workers, consumers and residents with an interest in the organisation of society. They can change their status and they can reproduce.

These differences make it hard to justify calls for treating Mode 4 temporary service providers “outside the domain of immigration-related laws and labour market regulations”.

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Migration

Definition of Migrant Worker in ILO Migrant Workers (Supplementary Provisions) Convention, 1975 (No. 143):

“…a person who migrates or who has migrated from one country to another with a view to being employed otherwise than on his own account and includes any person regularly admitted as a migrant worker”.

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Migration (II)

Temporary presence does not avoid the deeper economic and social problems associated with migration. Temporary workers often stay permanently in the host country.

GATS – Mode 4 cannot be dissociated from migration.

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Migration (III)

In fact, under GATS – Mode 4, Governments are free to regulate entry and temporary stay, provided these measures do not nullify or impair the commitments.

Differential visa requirements are not to be regarded as nullifying or impairing benefits.

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Development Categories of temporary foreign workers

Intra-corporate transferees: executives, specialists, managers Business visitors Contract service suppliers Other high-level management officials/specialists

70% of proposals for commitments deal with high- skilled workers accompanying foreign investments, including business visitors, managers and specialists (WTO, 2004: 54).

Percentage of categories: 1) intra-company transferees (57%), 2) business visitors (23%), 3) contract service suppliers (8%) and 4) other high-level management officials/specialists (12%).

Research indicates that the largest gains come from the movement of low-skilled workers, where the wage gaps are the greatest (Martin, 2006: v).

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Development (II) Remittances: contention is that they will

increase and contribute to development in countries of origin.

Remittances are significant for low skilled workers, where they contribute to poverty reduction.

But remittances are less significant for high-skilled migrant workers, those covered by GATS- Mode 4 commitments.

Remittances could decline with settlement. They could also continue to flow to developing countries and provide a band-aid that allows governments to defer reforms needed to spur economic growth and development.

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Development (III)

Brain drain: For sending countries, the costs of Mode 4 migration may include loss of skills and investments in education.

The balance depends on whether the extra skills acquired by returning service providers exceed the lost skills lost of those who settle.

If GATS made it easier for professional service providers to cross borders and stay abroad, a faster brain drain from developing countries could set in motion vicious circles that slowed development.

Departure of the best and brightest reduces the country’s capacity for long-term economic growth.

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Labour Regulation

Agreement shall not apply to measures affecting natural persons seeking access to the employment market of a Member, nor shall it apply to measures regarding citizenship, residence or employment on a permanent basis.

This provision means that persons moving under Mode 4 do not join the labour market of a receiving country party to the Agreement when in fact they perform a job in its territory.

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Labour Regulation (II) The provision is a basis for excluding persons moving

under Mode 4 from the jurisdiction of the receiving country, in respect of labour law.

In fact, applying national labour regulation becomes a limitation on commitments. Examples are the commitments of:

Cambodia: where a limitation mentions that foreign workers shall be subject to labour law (Tullao, 2007: 16).

Egypt: where a limitation mentions that foreign workers from the following countries (Greece, Iraq, Jordan, Libya, Qatar, Sudan, United Arab Emirates, Yemen) shall be subject to labour law.

Indonesia: where a limitation mentions that foreign workers shall be subject to expatriate charges, labour laws and regulations (Tullao, 2007: 16).

Tunisia: where a limitation mentions that foreign workers shall benefit from social security and health care.

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Labour Regulation (III) The provision allows for differential treatment of

workers performing similar jobs in the same country and probably in the same enterprise.

This is an infringement of the fundamental principle of equality and non-discrimination established in international labour law. The principle is also a cornerstone of international human rights law.

Under a “contract service supplier”, an individual worker in a factory or field is a service provider, covered by Mode 4. In contrast, his/ her directly employed colleague is an industrial or agricultural worker producing goods. This is also a basis for differential access and treatment.

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Labour Regulation and Equality

Equality and non-discrimination in international labour law: ILO Declaration of Fundamental Principles

and Rights (1998)- Freedom of association and right to collective bargaining.- The elimination of forced and compulsory labour.- The abolitions of child labour.- The elimination of discrimination in work place (Conventions Nos. 100 and 111).

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Labour Regulation and Equality (II)

ILO Fundamental Conventions

- Equal Remuneration Convention, 1951 (No. 100) (164 ratifications to date). - Discrimination (Employment and Occupation) Convention, 1958 (no. 111) (166 ratifications to date).

ILO Migrant Workers Conventions Nos. 97 and 143

- Equality of treatment between national and migrant workers.

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Labour Regulation and Equality (III)

The principle of equality and non-discrimination is important:

for the protection and working conditions of workers labouring in foreign countries, in a world constituted by nation-states where rights naturally derive from citizenship.

for preserving the competitiveness of national workers in their countries’ labour markets by not undercutting the cost of their labour.

In other cases for national workers not to work under less favourable terms and conditions than foreign workers.

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Labour Regulation and Equality (IV)

Equality and non-discrimination are therefore essential for cohesive non-conflictual relations between national and foreign workers, and for economic and social stability in the receiving country.

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Labour Regulation and Equality (V)

The need for differential treatment is doubtful:

In industrialized countries, demand for labour is prompted by ageing and dwindling labour forces. In any case, commitments are only made for occupations where agreement on demand exists.

In developing countries, demand for labour is prompted by needs for skills and for furthering growth and development.

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Conclusions: Labour Mobility for Development- the ILO Approach

The ILO Multilateral Framework for Labour Migration is a set of non-binding principles and guidelines for the formulation and application of labour migration policies.

It addresses labour mobility with a view to contributing to development in both countries of origin and destination under Section IV. It sets a principle and provides guidelines on how to promote labour mobility.

Section IV: Effective Management of Labour Migration

Principle 5: “Expanding avenues for regular labour migration should be considering, taking into account labour market needs and demographic trends”.

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Conclusions: Labour Mobility for Development- the ILO Approach (II)

Guidelines include: Establishing systems for periodic, objective

labour market analyses That take into account gender issues and that include:

Sectoral, occupational and regional dimensions of labour shortages and their causes, and relevant issues of labour supply;

Shortages of skilled workers in both origin and destination countries, including in the public, health and education sectors;

Long-term impact of demographic trends, especially ageing and population growth, on the demand for and supply of labour.

Establishing transparent policies for admission, employment and residence of migrant workers.

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Conclusions: Labour Mobility for Development- the ILO Approach

(III)

Establishing policies and procedures to facilitate the movement of migrant workers through bilateral, regional or multilateral agreements.

Promoting labour mobility within regional integration schemes.

Ensuring that temporary work schemes respond to established labour market needs and that these respect the principle of equal treatment between migrant and national workers.

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Conclusions: Labour Mobility for Development- the ILO Approach

(IV)

Providing labour ministries with a key role in policy formulation, elaboration, management and administration of labour migration to ensure that labour and employment policy considerations are taken into account.

Establishing a mechanism to ensure coordination and consultation among all ministries, authorities and bodies involved with labour migration.

Establishing tripartite procedures to ensure that employers’ and workers’ organisations are consulted on labour migration issues and their views taken into account.

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Thank you for your kind attention.