WTO SymposiumWTO SymposiumMODE 4 OF THE GATS –MODE 4 OF THE GATS –

TAKING STOCK AND MOVING FORWARDTAKING STOCK AND MOVING FORWARD

Geneva, 22-23 September 2008Geneva, 22-23 September 2008

Session 4: Session 4: Mode 4 in practiceMode 4 in practice

– Perspectives from immigration, labour and trade– Perspectives from immigration, labour and trade

Experience in the Separate Customs TerritExperience in the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsory of Taiwan, Penghu, Kinmen, and Mats

uu

Professor Shin-yi PengProfessor Shin-yi Peng

Tsing Hua UniversityTsing Hua University

33

OutlineOutline Mode 4 Trade in East AsiaMode 4 Trade in East Asia

General Review of the GATS Commitments(& the RTAs)General Review of the GATS Commitments(& the RTAs) Existing Regime for Labor Mobility (within GATS mode 4 Existing Regime for Labor Mobility (within GATS mode 4

Framework)Framework) Current Flows of Foreign Natural Persons in Chinese TaipeiCurrent Flows of Foreign Natural Persons in Chinese Taipei

Legal FrameworkLegal Framework Statistical AnalysisStatistical Analysis

Potential Implications and Main ConcernsPotential Implications and Main Concerns Policy Debates and Legal IssuesPolicy Debates and Legal Issues

As a Host CountryAs a Host Country As a Home CountryAs a Home Country

Mode 4 LiberalizationMode 4 Liberalization The APEC ExperienceThe APEC Experience Concluding Remarks Concluding Remarks

44

Mode 4 Trade in East AsiaMode 4 Trade in East Asia General Review of the GATS CommitmentsGeneral Review of the GATS Commitments Existing Regime for Labor Mobility (within Existing Regime for Labor Mobility (within

GATS mode 4 Framework)GATS mode 4 Framework)

55

Mode 4 in East Asia--Mode 4 in East Asia--GATS CommitmentsGATS Commitments

Major Entry Major Entry Conditions & Conditions & LimitationsLimitations

East Asian WTO Members East Asian WTO Members

Link to Mode 3 Link to Mode 3 Chinese Taipei, Thailand, Singapore, Chinese Taipei, Thailand, Singapore, Malaysia, Korea, Japan, Indonesia, Malaysia, Korea, Japan, Indonesia, Hong Kong-China and China. Hong Kong-China and China.

Pre-employment Pre-employment Chinese Taipei, Singapore, Malaysia, Chinese Taipei, Singapore, Malaysia, Korea, and Hong Kong, China.Korea, and Hong Kong, China.

ENT ENT The Philippines, Malaysia, Indonesia, The Philippines, Malaysia, Indonesia, and China.and China.

66

ASEAN?ASEAN?

Others?Others?

APEC?APEC?

Japan-Japan-Singapore Singapore FTA?FTA?

More More successful successful

??

The empirical

facts disprove

that!

Regional ContextRegional Context

77

Selective East Selective East Asian WTO Asian WTO Member Member

Greater Market Access in Mode 4 Initial/Revised OffersGreater Market Access in Mode 4 Initial/Revised Offers

Employment Employment by Domestic by Domestic FirmsFirms

Lower Lower Level of Level of SkillsSkills

De-linked De-linked with Mode with Mode 33

Intra-Intra-corporate corporate TransfereesTransferees

OtherOther

Brunei DarussalamBrunei Darussalam XX XX XX XX XX

ChinaChina X X XX XX XX XX

CambodiaCambodia XX XX XX XX XX

Hong Kong, ChinaHong Kong, China XX XX XX √√ XX

IndonesiaIndonesia XX XX √√ √√ XX

JapanJapan XX XX √√ √√ √√

KoreaKorea XX XX √√ √√ XX

MalaysiaMalaysia XX XX XX XX XX

Macao, ChinaMacao, China XX XX XX √√ XX

MyanmarMyanmar XX XX XX XX XX

The PhilippinesThe Philippines XX XX XX XX XX

SingaporeSingapore XX XX XX √√ XX

Chinese TaipeiChinese Taipei XX XX XX XX XX

ThailandThailand XX XX √√ √√ XX

88

Chinese Taipei--Chinese Taipei-- GATS Commitments and the Existing Regime GATS Commitments and the Existing Regime

Business visitorsBusiness visitors

Intra-corporate Intra-corporate TransfereesTransferees

Contract SuppliersContract Suppliers

•Employment Services Act•Enforcement Rules

Other Law or Regulation:•Attorney Act

•Certified Public Accountant Act

•The Reviewing Standards and Employment Qualifications for Foreigners Engaging in the Jobs

Specified in the Employment Service Act

GATS CommitmentsLabor Law and Major Regulations

99

Chinese Taipei--Chinese Taipei-- GATS Commitments and the Existing Regime GATS Commitments and the Existing Regime

Labor LawMode 4

Commitments

e.g., Business Business visitorsvisitors

e.g., Less skilledLess skilled

workersworkerse.g.,

Annex on Mode 4

1010

Current Flows of Foreign Natural Persons Current Flows of Foreign Natural Persons in Chinese Taipeiin Chinese Taipei

Legal FrameworkLegal Framework Statistical AnalysisStatistical Analysis

1111

Legal Framework—Legal Framework—Employment Services Act (Article  46)Employment Services Act (Article  46)

Unless otherwise provided for in the present Act, the Unless otherwise provided for in the present Act, the work a Foreign Worker may be employed to engage work a Foreign Worker may be employed to engage in within the territory of Chinese Taipei is limited to in within the territory of Chinese Taipei is limited to the following:the following:

1212

1. Specialized or technical work;1. Specialized or technical work;

2. Director/Manager/Executive of a business invested in or set 2. Director/Manager/Executive of a business invested in or set up by foreigners with the authorization of the government;up by foreigners with the authorization of the government;

3. Teacher at schools;3. Teacher at schools;

4. Full-time teacher teaching courses on foreign languages at a 4. Full-time teacher teaching courses on foreign languages at a short-term class registered for supplementary schooling in short-term class registered for supplementary schooling in accordance with the Supplementary Education Act;accordance with the Supplementary Education Act;

5. Sports coach and athlete;5. Sports coach and athlete;

6. Religious, artistic, and show business work;6. Religious, artistic, and show business work;

Mode 4 Commitments under GATS

1313

7. Crew member of a merchant vessel, working vessel, and vessel 7. Crew member of a merchant vessel, working vessel, and vessel ad hoc permitted by the Ministry of Transportation and ad hoc permitted by the Ministry of Transportation and Communication;Communication;

8. Marine fishing/netting work;8. Marine fishing/netting work;

9. Household assistant;9. Household assistant;

10. Work designated by the competent authority in response to 10. Work designated by the competent authority in response to major construction projects or economic/social development needs; major construction projects or economic/social development needs; andand

11. Other specialized work ad hoc approved by the competent 11. Other specialized work ad hoc approved by the competent authority due to the lack of such specialist in the domestic authority due to the lack of such specialist in the domestic employment market and the business necessity to retain the service employment market and the business necessity to retain the service of such specialist therefore.of such specialist therefore.

Outside the GATS Commitments

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Special Professions or Technical Special Professions or Technical AssignmentsAssignments

1. Architecture and civil engineering.1. Architecture and civil engineering.2. Transportation.2. Transportation.3. Tax and financial service.3. Tax and financial service.4. Real estate agency.4. Real estate agency.5. Immigration service.5. Immigration service.6. Attorney ( legal services).6. Attorney ( legal services).7. Technicians.7. Technicians.8. Medical and/or Health Care.8. Medical and/or Health Care.9. Environmental protection.9. Environmental protection.10. Cultural, sports and recreation services.10. Cultural, sports and recreation services.11. Academic research.11. Academic research.12. Veterinarian.12. Veterinarian.13. Manufacturing.13. Manufacturing.14. Wholesale.14. Wholesale.15. Other job descriptions designated by the competent 15. Other job descriptions designated by the competent authorities along with the specific industry authorities. authorities along with the specific industry authorities.

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Mode 4 in practice-Mode 4 in practice- Current Flows of Foreign Natural Persons in Current Flows of Foreign Natural Persons in

Chinese TaipeiChinese Taipei Statistical AnalysisStatistical Analysis

Time PeriodTime Period: From 2004/01-2008/07: From 2004/01-2008/07 DataData: Bureau of the Employment and Vocational Training : Bureau of the Employment and Vocational Training

(BEVT) under the Council of Labor Affairs, Science Park (BEVT) under the Council of Labor Affairs, Science Park Administration, Export Processing Zone AdministrationAdministration, Export Processing Zone Administration

Type of Work PermitsType of Work Permits: Foreign Professionals under the : Foreign Professionals under the definition of the Employment Services Act (Article  46)definition of the Employment Services Act (Article  46) Specialized workSpecialized work Director/Manager/ExecutiveDirector/Manager/Executive Teacher at schoolsTeacher at schools Teacher for supplementary schoolingTeacher for supplementary schooling Sports coach and athleteSports coach and athlete Religious and artistic workReligious and artistic work

1616

Pemitted

6% (9563) 2% (3014)

0% (423)

22% (32848)

26% (39121)44% (66532)

Specialized work

Director/Manager/Executive

Teacher at schools

Teacher for supplementaryschooling

Sports coach and athlete

Religious and artistic work

1717

16245

1414

3270

6188

71

2118

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

Specialized work Director/Manager/Executive Teacher at schools Teacher for supplementaryschooling

Sports coach and athlete Religious and artistic work

Valid Employment

1818

117945

115080

37402

36425

0 20000 40000 60000 80000 100000 120000

Male

Female

Applied Permitted

1919

Permitted

22% (33052)

1% (2115) 0% (605) 3% (4390)

7% (10509)

67% (100834)

Ph.D. Master Bachelor High School Junior High School Others

2020

3450

338134793317

31633041

27202665

2416235123832298

2272

218217681723

1586

1543

0 500 1000 1500 2000 2500 3000 3500

Australia

Russia

Thailand

France

Indonesia

Singapore

Hong Kong

Ukraine

New Zealand

Applied Permitted

2121

387093812522716

2214514865

1446281377979

63036147

58015633

56925487

43324226

38243771

37223590

0 5000 10000 15000 20000 25000 30000 35000 40000

Japan

US

Canada

UK

South Africa

The Philippines

Malaysia

Korea

Germany

India

Applied Permitted

2222

Blue-Collar

0

30,000

60,000

90,000

120,000

1 6 12 1 6 7

Indonesia

Malaysia Mongolia

Vietnam

Thailand

The Philippines

2323

Potential Implications and Main ConcernsPotential Implications and Main Concerns Policy DebatesPolicy Debates

As a Host Country As a Host Country As a Home Country As a Home Country

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Mode 4Mode 4Mode 3Mode 3

De-linking

Intra-corporate Transferees executives, managers, and specialists?

Making the negotiations easier for liberalizing mode 4 on its own

Making the linking of modes 3 and 4 unnecessarily complicated.

Mode 3 v. Mode 4Mode 3 v. Mode 4

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Sector/Sub-sectorSector/Sub-sector Market AccessMarket Access

Horizontal Horizontal CommitmentsCommitments

All SectorsAll Sectors Entry and Temporary Stay of Natural Entry and Temporary Stay of Natural Persons. Persons. Unbound, except for measures…Unbound, except for measures…

Intra-Corporate TransfereesIntra-Corporate Transferees

-Can the services be delivered exclusively through mode 4?

-Are the Services normally supplied by natural persons as an adjunct to a foreign investment due to the technology facilities and business models ?

De-Linking with Mode 3?De-Linking with Mode 3?Horizontal Approach v. Sectoral ApproachHorizontal Approach v. Sectoral Approach

2626

Sub-sectorSub-sector Market AccessMarket Access

Sector-Specific Sector-Specific CommitmentsCommitments

Computer Computer ServicesServices

The situations where the movement of persThe situations where the movement of persons alone can be a feasible mode of supplyons alone can be a feasible mode of supply

Basic Telecom Basic Telecom ServicesServices

The situations where the movement of persThe situations where the movement of persons is mainly for the purpose of facilitating ons is mainly for the purpose of facilitating trade trade in in mode 3mode 3

Any undertaking should therefore be made on the basis of Any undertaking should therefore be made on the basis of individual sectors in order to yield the greatest possible individual sectors in order to yield the greatest possible Liberalization for mode 4.Liberalization for mode 4.

De-Linking with Mode 3?De-Linking with Mode 3?Horizontal Approach v. Sectoral ApproachHorizontal Approach v. Sectoral Approach

2727

TerminologiesTerminologies ““Temporary”?Temporary”? ““Professionals”?Professionals”?

Discretionary Discretionary PowerPower Unpredictability

Lack of TransparencyLack of Transparency No explicit criteriaNo explicit criteria No clear definitionNo clear definition

Trade Officials:Trade Officials:How to access How to access the degree of the degree of reciprocity?reciprocity?

Play it Safe

Toward Greater Mobility--Toward Greater Mobility--Regulatory Transparency of Mode 4 TradeRegulatory Transparency of Mode 4 Trade

2828

The APEC ExperienceThe APEC Experience APEC Individual Action Plan (IAP) APEC Individual Action Plan (IAP) In Chapter 13 of the IAP “Mobility of Business People”In Chapter 13 of the IAP “Mobility of Business People”

to enhance the mobility of business people who are to enhance the mobility of business people who are engaged in the conduct of trade and investment activities in engaged in the conduct of trade and investment activities in the Asia-Pacific region.the Asia-Pacific region.

to enhance the use of information and communications to enhance the use of information and communications technology (ICT) to facilitate the movement of people technology (ICT) to facilitate the movement of people across borders.across borders.

to exchange information on regulatory regimes in regard to to exchange information on regulatory regimes in regard to the mobility of business people in the regionthe mobility of business people in the region

to streamline short-term entry requirements for business to streamline short-term entry requirements for business peoplepeople..

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The APEC ExperienceThe APEC Experience To carry out those promises, Members update their To carry out those promises, Members update their

relevant measures by the following format on an relevant measures by the following format on an annual basis:annual basis:

Chapter 13: Mobility of Business People, IAPChapter 13: Mobility of Business People, IAP

Chinese Taipei’s Approach to Business MobilityChinese Taipei’s Approach to Business Mobility

Section Section Improvements Improvements Implemented Since Last Implemented Since Last IAPIAP

Current Business Current Business Mobility Related Mobility Related Policies and Policies and Arrangements Arrangements

Further Further Improvements Improvements PlannedPlanned

3030

Concluding RemarksConcluding Remarks To the extent that labor policy authorities are being asked to To the extent that labor policy authorities are being asked to

respond to the inquiries for achieving further liberalization of respond to the inquiries for achieving further liberalization of mode 4, they have been cautious in their response, which is mode 4, they have been cautious in their response, which is understandable.understandable.

It is important to be reminded of the fact that the mission of It is important to be reminded of the fact that the mission of most labor authorities is to administer legislations, not to most labor authorities is to administer legislations, not to facilitate movement of foreign services suppliers, since their facilitate movement of foreign services suppliers, since their functions are largely defensive in nature.functions are largely defensive in nature.

The problems associated with mode 4 requires a new level of The problems associated with mode 4 requires a new level of policy co-ordination between relevant regulatory agencies, policy co-ordination between relevant regulatory agencies, particularly those responsible for trade, immigration and the particularly those responsible for trade, immigration and the labor market, in order to find workable solutions and to move labor market, in order to find workable solutions and to move forward with liberalization.forward with liberalization.

3131

Concluding RemarksConcluding Remarks

Labor and trade authorities should engage in an intensive and Labor and trade authorities should engage in an intensive and productive dialogue on the further liberalization of mode 4.productive dialogue on the further liberalization of mode 4. The legal framework of labor law, in most cases, although The legal framework of labor law, in most cases, although

consistent with GATS in substance, is complicated and the consistent with GATS in substance, is complicated and the language does not correspond exactly to the GATS horizontal language does not correspond exactly to the GATS horizontal commitmentscommitments

For most Members, the interface between labor policy-making For most Members, the interface between labor policy-making related to foreign interests is somehow weak. The most difficult related to foreign interests is somehow weak. The most difficult part seems to be that the policy fails to determine who is best part seems to be that the policy fails to determine who is best positioned to respond to these demands for liberalization.positioned to respond to these demands for liberalization.

The different groups in charge of trade, labor and migration The different groups in charge of trade, labor and migration policies in the capitals of the Members must increase their policies in the capitals of the Members must increase their collaboration.collaboration.

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Concluding RemarksConcluding Remarks There is a need for predictability of actual entry conditions. There is a need for predictability of actual entry conditions.

The criteria for mode 4 entry must be more specific so as to The criteria for mode 4 entry must be more specific so as to assist and guide foreign services suppliers. assist and guide foreign services suppliers. There are many vague terminologies and definitions used There are many vague terminologies and definitions used

in the Schedule of Commitments that leave much room for in the Schedule of Commitments that leave much room for administrative discretion.administrative discretion.

Since much of the terminology can be interpreted Since much of the terminology can be interpreted differently by different Members, it becomes rather differently by different Members, it becomes rather difficult if not impossible to assess the overall degree of difficult if not impossible to assess the overall degree of liberality. liberality.

The existing GATS transparency rules are not adequate in The existing GATS transparency rules are not adequate in terms of mode 4. Consideration should be given to terms of mode 4. Consideration should be given to developing specific disciplines for mode 4.developing specific disciplines for mode 4.

Shin-yi PENGE-mail: sypeng@mx.nthu.edu.tw

Website:  http://sypeng.myweb.hinet.net SSRN Author page: http://ssrn.com/author=723329