Embed Size (px)
Citation preview
Islamic Development Bank
Multilateral Negotiations on Trade in Services
GATS – Mode 4Daniel C. Crosby - Casablanca, 16 June 2009
Budin & Associés
OUTLINE
• History & GATS background
• Scope & Definition
• Commitments
• Doha Development Agenda
Budin & Associés
2
History & Background
• UR « package » of tradable interests
• Developed countries• High-tech goods (+ beyond the border)• Value-added Services • IPRs• Developing countries
Budin & Associés
3
History & Background
• Developing countries• Low-tech goods, agriculture, textiles• Mode 4
Budin & Associés
4
Present Practice
• Countries invite foreign workers to contribute to their economic growth • Services?• MFN applicable?
Budin & Associés
5
GATS Modes of Supply
• GATS Article I, four modes of supply :
(1) Cross-border supply(2) Consumption abroad(3) Commercial presence (investment)(4) Presence of natural persons
Budin & Associés
6
Mode 4 Supply Defined
• The supply of a service by:
a service supplier of one Member through presence of natural persons of a Member in the territory of any other Member
Budin & Associés
7
GATS Annex on Mode 4
“This Annex applies to measures affecting natural persons who are service suppliers of a Member, and natural persons of a Member who are employed by a service supplier of a Member, in respect of the supply of a service.”
Budin & Associés
8
Annex Coverage
• Self-employed
• Intra-corporate transferees
• Business visitors
• Contractual service suppliers
• Employees of foreign service suppliers
Budin & Associés
9
Mode 4 Categories Budin & Associés
10
The GATS covers services supplied by whom?
Service supplier of another Member
What form can such a “foreign” service supplier take?
Natural person Juridical person
How are services supplied in the host country?
Directly to consumer in host country as
independent service supplier
Through an employee of a “foreign” company with
commercial presence in host country
Through an employee of a “foreign”
company without commercial presence
in host country
What categories of natural persons are generally found in Members' Schedules?
Independent professional
- Contractual service
supplier
Intra-corporate transferee OR
“temporary”employee
Contractual service supplier
Annex Exclusions
• No affect on immigration policy Measures affecting natural persons seeking
“access to the employment market” Measures regarding “citizenship, residence or
employment on a permanent basis”
Budin & Associés
11
Regulation & Mode 4
• Governments retain rights to regulate entry and temporary stay, but not “nullification or impairment” of commitments
• MFN exception – Members may apply differential visa requirements
Budin & Associés
12
Existing Commitments
• Limited by “horizontal commitments”• No full liberalization • Positive listing approach: “Unbound except ...”
horizontal• Often linked to commercial presence• High-level of training/expertise• Specified durations of “temporary” stay: 3 months for
BV, 5 years for ICT
Budin & Associés
13
Main limitations scheduled
• Limited categories included
• Pre-employment requirements
• Economic Needs Tests/Labour Market Tests
• Quotas
• Residency and nationality requirements
• Training/Education/ Qualification
• Authorisation, approval, registration requirements
• Training of locals
Mode 4 ICT Categories
“Intra-corporate transferees” (ICT) – work for an enterprise established in the territory of a Member and are transferred to the enterprise’s commercial presence in the territory of another Member in the context of the supply of a service. Often as executives, managers, specialists.
“Executives” – direct the management, have wide latitude in decision-making, are supervised only by board of directors or stockholders, do not provide service directly
“Managers” – direct organization or department, hire/fire, have day-to-day discretion, supervise other staff
“Specialists” – have essential knowledge at advanced level of expertise, proprietary knowledge of organisation
Business Visitor Categories
• “Business visitors” (BV) are not engaged in supplying the service or making direct sales to the public, and do not receive remuneration from a source in host Member
• “Sales” BV – negotiate for the sale of a service, establish business contacts, attend business meetings and similar
• “Set-up” BV – set-up a commercial presence in another Member, where their employer has none
Contractual supplier commitments
• “Contractual service suppliers” (CSS) – employees of a juridical person (which has no commercial presence in host Member) who supply a service on the basis of a contract their employer has concluded with a consumer in host Member
• The employee receives remuneration from the employer while abroad, has appropriate educational and professional qualifications, may not engage in other employment
• Commitment relates only to the activity which is the subject of the contract
Independent Professionals
• “Independent professional” (IP) – self-employed person based in the territory of another Member who supplies a service on the basis of a services contract with a consumer in the host Member
• IP has appropriate educational and professional qualifications
• Commitment relates only to the activity which is the subject of the contract
Structure of Horizontal Commitments(% of total categories scheduled, 2008)
ICT43%
Contract4%
Other4%
E,M,S25%
BV24%
BV = Business VisitorsICT = Intra-Corporate Transferees
E,M,S = Executives, Managers, Specialists Source: WTO Secretariat (2008)
DDA Negotiations
• Point of departure:
• LEAST liberal of all mode of supply in terms of commitments
• Positive listing• Many restrictions / conditions
Budin & Associés
20
Problems Identified
• Structure and coverage of existing commitments• Economic Needs Tests (ENTs)• Definitional problems• Administrative practices: no access to information
and lack of transparency• Lack of recognition of qualifications
Budin & Associés
21
Solutions Proposed
• More and better commitments • more categories, improved definitions, finer classification,
“sector-specific” commitments
• Removal of barriers• multilateral criteria for ENTs - more specific, transparent and
non-discriminatory
• Greater transparency and predictability• “GATS visa”• More regulatory cooperation amongst sending and
receiving Members
Budin & Associés
22
DDA New Mode 4 Coverage
• 30 of around 70 offers propose some improvement to horizontal commitments (half developed, half developing countries)
• The value or importance of horizontal commitments in mode 4 depends on the number of sectors included in the schedule
Budin & Associés
23
Nature of Improvements
• New categories, broader coverage• Expanded list of sectors to which the commitments
apply• Extended periods of stay; possibility of renewal • Clarification of the application/reduction of the scope
of ENTs• Reduction of discriminatory measures• Some improvements in transparency
Budin & Associés
24
DDA - Mode 4 Objectives
Members to be guided, to the maximum extent possible, by the following mode 4 objectives:
• New or improved commitments on:• CSS, IP and Others de-linked from commercial presence• ICT, Business Visitors
• to reflect inter alia• removal or substantial reduction of ENTs• indication of duration of stay and renewal
Plurilateral Requests
Developing country “collective request” on mode 4
• From 15 developing to 9 developed countries• Seeks commitments on CSS and IP • Commitments are called for in a number of sectors,
falling under business, construction, environmental, tourism and recreational services
• Asks for the removal/clarification of Economic Needs Tests
(Least-developed countries have also submitted a mode 4 request, with a largely similar focus)
Signalling Conference
Indications were exchanged on own new and improved commitments as well as on the contributions expected from others
Overall, positive indications were given about market access commitments across all major services sectors and modes of supply
“Most participants indicated their readiness to improve access conditions for mode 4. In several statements, these signals were expressly linked to the development character of this Round.”[Report by the Chairman of the TNC, 30 July 2008 (JOB(08)/93)]
