Course on Trade in Services for Officials Course on Trade in Services for Officials of the Andean Communityof the Andean Community

Treatment of Mode 4 in Regional Trade Treatment of Mode 4 in Regional Trade Agreements (RTA)Agreements (RTA)

Sherry Stephenson

Trade Unit, OAS

Bogotá - Colombia

May 10-14, 2004

Liberalization of Mode 4Liberalization of Mode 4

Liberalizing the temporary movement of persons Liberalizing the temporary movement of persons should be easier in regional and bilateral agreements should be easier in regional and bilateral agreements among a small set of countries than at the among a small set of countries than at the multilateral level under the WTOmultilateral level under the WTO

QUESTION: Has this been the case in practice ?QUESTION: Has this been the case in practice ?

Mode 4 in GATS Article VMode 4 in GATS Article V

Article V : Article V : Labour Markets Integration AgreementsLabour Markets Integration Agreements   

This Agreement shall not prevent any of its Members from being a party to an agreement establishing full integration of the labour markets between or among the parties to such an agreement, provided that such an agreement:

(a) exempts citizens of parties to the agreement from requirements concerning residency and work permits;

(b) is notified to the Council for Trade in Services

Source: WTO, GATS text Article V

Mode 4 In Regional and Mode 4 In Regional and Bilateral Trade AgreementsBilateral Trade Agreements

Agreements examined:Agreements examined: NAFTANAFTA US - ChileUS - Chile US - SingaporeUS - Singapore CARICOMCARICOM MEROSURMEROSUR Andean Community experience to be commented Andean Community experience to be commented

upon separately.upon separately.

NAFTA and NAFTA- Type FTA’sNAFTA and NAFTA- Type FTA’sMode 4 TreatmentMode 4 Treatment

Separate chapter of agreementSeparate chapter of agreement

Focus is on procedures Focus is on procedures Provision of informationProvision of information Grant of temporary entryGrant of temporary entry Regulatory transparencyRegulatory transparency Dispute settlementDispute settlement DefinitionsDefinitions

Little or NO liberalizing content “per se”Little or NO liberalizing content “per se”

StructureStructure of NAFTA-like FTA’s for Services of NAFTA-like FTA’s for Services in Western Hemispherein Western Hemisphere

Chapter onCross-Border

Trade in Services

(Mode 1 &2)

Chapter on Telecommunications

(With RegulatoryDisciplines)

Chapter onInvestment

(Mode 3)

Chapter on Temporary Entry

for Business Persons

(Mode 4)

Chapter on Financial Services

(Self-Contained) (Investment & Services)

List of Reservations – AnnexesList of Reservations – Annexes

Annex on Professional Services

NAFTA Type FTA’sNAFTA Type FTA’sDefinition of categories coveredDefinition of categories covered

1.1. Business VisitorsBusiness VisitorsPersons seeking to engage in :Persons seeking to engage in :

• Meeting and ConsultationsMeeting and Consultations- Research and DesignResearch and Design- Growth, Manufacture and Growth, Manufacture and

ProductionProduction- MarketingMarketing

- SalesSales- DistributionDistribution- After – Sales servicesAfter – Sales services- General Service ( Financial General Service ( Financial

Services)Services)

2.2. Trader and InvestorsTrader and Investors

Business persons seeking to:Business persons seeking to:

- - Carry on substantial trade in goods and services Carry on substantial trade in goods and services between the territory of a Party the person is national between the territory of a Party the person is national and the other Party in which the entry is soughtand the other Party in which the entry is sought

- - Operation of an investment to which the business Operation of an investment to which the business person has committed a substantial amount of capital person has committed a substantial amount of capital in a capacity that is supervisory, executive or in a capacity that is supervisory, executive or involves essential skillsinvolves essential skills

3.3. Intra – Company TransfereesIntra – Company Transferees

Business person employed by an enterprise who Business person employed by an enterprise who seeks to render services to that enterprise or a seeks to render services to that enterprise or a subsidiary or affiliate in a capacity that is managerial, subsidiary or affiliate in a capacity that is managerial, executive, or involves specialized knowledge.executive, or involves specialized knowledge.

A Party may required that business person to have A Party may required that business person to have been employed continuously by the enterprise for one been employed continuously by the enterprise for one year within the three-year period immediately year within the three-year period immediately preceding the date of applicationpreceding the date of application

4.4. ProfessionalsProfessionals

Business person seeking to engage in a business Business person seeking to engage in a business activity as a professional, or to perform training activity as a professional, or to perform training functions related to a particular profession, including functions related to a particular profession, including seminars.seminars.

Need to demonstrate the attainment of the minimum Need to demonstrate the attainment of the minimum educational requirementseducational requirements

NAFTA Type FTA’sNAFTA Type FTA’sMain features:Main features: Temporary stay Little actual liberalization Focus on high-skilled workers

Sometimes quotas are established for Professionals

Limitations by US

US – Mexico 5,500 p/year Canada – Mexico - US – Chile 1,600 p/year US – Singapore 5,400 p/year Maximum stay 90 days

Only those professions listed under Appendix1603.D1

Note: None of the US trade partners limit the access to US services providers through quotas or length of time.

NAFTA and NAFTA- Type FTA’sNAFTA and NAFTA- Type FTA’sAnnex on Professional ServicesAnnex on Professional Services

Aim:Aim:

To facilitate recognition of qualifications , To facilitate recognition of qualifications ,

diplomas, through Mutual Recognitiondiplomas, through Mutual Recognition

Agreements (MRA).Agreements (MRA).

Covers - Licenses, certificates only for servicesCovers - Licenses, certificates only for services providers. providers.

Recent Trend in US FTAsRecent Trend in US FTAs

No chapter included in recent FTAs on No chapter included in recent FTAs on Temporary Movement Temporary Movement

--Case of US-CAFTA--Case of US-CAFTA--Case of US-Australia FTA--Case of US-Australia FTA

Reason: Opposition to negotiating labor Reason: Opposition to negotiating labor entry by USTR when Congress feels entry by USTR when Congress feels that this area should fall under its that this area should fall under its competencecompetence

CARICOMCARICOMExperience with Liberalization of Mode 4Experience with Liberalization of Mode 4

Skilled Nationals Act (Adopted 1995)Skilled Nationals Act (Adopted 1995)

Three Main Elements:Three Main Elements:

1.1. Freedom of Travel: Freedom of Travel:

Includes the elimination of a need for passports for travel Includes the elimination of a need for passports for travel within the region; facilitation at immigration points; within the region; facilitation at immigration points; elimination of requirements for work permits forelimination of requirements for work permits forCARICOM nationals.CARICOM nationals.

2.2. Free movements of university graduates, other Free movements of university graduates, other professionals, skilled persons and occupationsprofessionals, skilled persons and occupations::

- Graduates from:Graduates from: - University of West Indies- University of West Indies- University of Guyana- University of Guyana- University of Suriname- University of Suriname

- Duly accredited media workersDuly accredited media workers- Sport personsSport persons- Musicians and artistsMusicians and artists- Workers in the Tourism and Entertainment industriesWorkers in the Tourism and Entertainment industries- Any other skilled person eligible under Articles 35d and 36a of Protocol IIAny other skilled person eligible under Articles 35d and 36a of Protocol II

Expanded to include additional categories:Expanded to include additional categories:- Self-employed services providersSelf-employed services providers- Entrepreneurs Entrepreneurs - Technical staffTechnical staff- Managerial staffManagerial staff- Supervisory staffSupervisory staff- Spouses and immediate families of persons consuming services abroadSpouses and immediate families of persons consuming services abroad

3.3. Other supporting measures:Other supporting measures:IIncludes the harmonization and transferability of social ncludes the harmonization and transferability of social security benefits; mechanisms for certifying and security benefits; mechanisms for certifying and establishing equivalency of degrees and accrediting establishing equivalency of degrees and accrediting institutions; coordination of social policies; development institutions; coordination of social policies; development and promotion of a public education program for the and promotion of a public education program for the policy of free movementpolicy of free movement

Labour Mobility :Labour Mobility :• Integral part of Caribbean Single Market and Economy Integral part of Caribbean Single Market and Economy (CSME)(CSME)

• CARICOM has gone further that any regional agreement CARICOM has gone further that any regional agreement except the European Union in fostering Labour Mobility except the European Union in fostering Labour Mobility

Status of Implementation of Skilled Nationals ActStatus of Implementation of Skilled Nationals Act

Member StateMember State Legislation EnactedLegislation Enacted Additional Steps RequiredAdditional Steps Required

Antigua & BarbudaAntigua & Barbuda YesYes Fully Operationalised Fully Operationalised

BelizeBelize YesYes Some administrative and procedural Some administrative and procedural arrangements must be put in place to issue arrangements must be put in place to issue

Certificates for specified categoriesCertificates for specified categories

Barbados Barbados YesYes Fully Operationalised Fully Operationalised

DominicaDominica YesYes Fully Operationalised Fully Operationalised

GrenadaGrenada YesYes Fully Operationalised Fully Operationalised

GuyanaGuyana YesYes Fully Operationalised Fully Operationalised

JamaicaJamaica YesYes Fully Operationalised Fully Operationalised

Saint LuciaSaint Lucia YesYes Fully Operationalised Fully Operationalised

St. Kitts and NevisSt. Kitts and Nevis YesYes Regulations and administrative Regulations and administrative arrangements are still to be completedarrangements are still to be completed

St Vincent and the St Vincent and the GrenadinesGrenadines

YesYes Fully OperationalisedFully Operationalised

SurinameSuriname YesYes Fully OperationalisedFully Operationalised

Trinidad and TobagoTrinidad and Tobago YesYes Fully OperationalisedFully Operationalised

Source: CARICOM Secretariat

MERCOSURMERCOSURVISA MercosurVISA Mercosur

• Decision No. 36, 2000 establishes the common rules for the temporary movement of services providers among member countries.

Main features:Main features:

- Focus on high-skilled workers ( técnicos altamente ( técnicos altamente calificados o especialistas y profesionales de alto nivel)calificados o especialistas y profesionales de alto nivel)- It does not eliminate the need for passport or visa- Eliminates the need for economic test or prior authorization- Maximum stay 2 years, renewable once

Definition of Categories for MERCOSUR visa Definition of Categories for MERCOSUR visa Article 1 of Annex to Decision No. 36Article 1 of Annex to Decision No. 36

• Gerentes y directivos Gerentes y directivos ejecutivosejecutivos

• AdministradoresAdministradores• DirectoresDirectores• Gerentes delegadosGerentes delegados• Representantes legalesRepresentantes legales• CientificosCientificos• InvestigadoresInvestigadores• Profesores Profesores

• ArtistasArtistas• DeportistasDeportistas• PeriodistasPeriodistas• Técnicos altamente Técnicos altamente

calificadoscalificados• EspecialistasEspecialistas• Profesionales de nivel Profesionales de nivel

superior superior

VISA RequirementsVISA Requirements

Necessary to obtain the Visa Mercosur from consular Necessary to obtain the Visa Mercosur from consular authorities with:authorities with:

• Valid PassportValid Passport• Birth certificateBirth certificate• Contract: Information about the company recipient of the Contract: Information about the company recipient of the

service and the type, duration and characteristics of the service and the type, duration and characteristics of the service providedservice provided

• Certificate issued by authorities clearing the applicant of any Certificate issued by authorities clearing the applicant of any criminal record (Certificado de antecedente penal)criminal record (Certificado de antecedente penal)

• Curriculim VitaeCurriculim Vitae

What can we conclude?What can we conclude?

Most regional agreements have not Most regional agreements have not gone very far to liberalize temporary gone very far to liberalize temporary movement of personsmovement of persons

Focus has been on professionals and Focus has been on professionals and highly-skilled laborhighly-skilled labor

Definition of “temporary” variesDefinition of “temporary” varies What can be facilitated are procedures What can be facilitated are procedures

– transparency - and conclusion of – transparency - and conclusion of MRAsMRAs