A former head of the British Council, India, told FE once that free movement of people across borders constitutes ?a political issue? and nations may perhaps find it difficult to negotiate the issue. The matter, however, has been on the WTO agenda under Mode 4, although it may not have the made the progress that it should. The collapse of the WTO?s Doha Round has hit India just where it hurts most?the service sector, although Pascal Lamy, WTO director general, on his recent trip to India has said he is hopeful that the talks will be revived. That includes sectors like information technology and IT-enabled services, both of which contribute hugely to India?s solvency and growth.
Clearly, in sectors such as these, India?s citizens can act as they wish. But their ability to fulfill their dreams depends, to an overwhelming extent, on the logistics laid out by foreign (host) states. That applies, for instance, to GATS? Mode 1: cross-border trade, or ?outsourcing? from the territory of one WTO member to service the consumer of another. Mode 2 allows the servicing of consumption from abroad, with supply being provided from one WTO member through a commercial presence in the territory of another. Even Mode 3 transactions are enabled through the commercial presence of a service supplier via a natural person (or persons) located in the territory of another.
But, Mode 4, the essence of individualism, deals with the issue of the ?presence of natural persons? in foreign, or host, countries. It applies when a foreign?in this case, an Indian national provides a service as consultant, health worker or employee for a host country service provider?like a consultancy, hospital, university, construction or even a municipality.
India has long prepared the ground for favourable quid pro quos from the OECD. It did that in 2005 by developing upon its initial year-2000 offer and offered extensive commitments in numerous new sectors and sub-sectors such as architecture, integrated engineering, urban planning and professions such as veterinarians, environmentalists, distributors, tour operators, educationists, engineers and others in the recreational, cultural and sporting and air-transport areas.
Also, there was an upgrading of pre-existent commitments sectors like engineering, computers and related areas, R&D, basic and value-added telecom, banking, asset management and other non-banking financial services. Those were made alongside a substantial Mode 4 initial offer by including all the categories of natural persons like intra-corporate transferees, business visitors, contractual service suppliers and independent professionals. Further improvements have been made in the sectoral coverage of both the contractual service suppliers and independent professionals and the definition and parameters of all these categories have been brought in line with the common categories paper submitted by a number of members including India.
Services are, in fact, described as anything ?that you cannot drop on your foot??which includes banks, schools, energy, healthcare, water, libraries, railways, airlines, TV and radio. But foreign suppliers must be given a level playing field, at least as favourable a treatment as is meted out to local suppliers. Nor might governments limit the number of service suppliers, or stipulate ?local content? requirements. Overall, the OECD?s approach to labour mobility differs hugely from that of developing countries.
That is what makes the current Mode 4 commitments restrictive, subject to limitations depending on immigration rules and economic needs. Rights of labour mobility, confer no automatic rights to practice a profession; national regulations, licensing, and the need to possess qualifications that conform govern those.
As for the US, it cannot do much about losing investable funds to China or India, but?nearer home?immigration makes ?job destruction? far more visible. And that holds as true of Indian finance professionals on Wall Street, or dentists, doctors and professors of marketing in US business schools as the masses of skilled workers who take up temporary abode in West Asia or elsewhere. Yet, given its current recessionary condition, 5%-plus unemployment and elections in the near term, matters have only worsened. In Australia, for instance, the majority of skilled and semi-skilled workers enter Australia under the subclass 457 visa programme.
The subclass 457 visa is available to persons from all countries including developed and developing countries. Indians accounted for 14% of subclass 457 visas issued to in the 12 months to June 30 2008, second only to people from the UK who accounted for 22% of visas issued. According to an Australian government spokesperson, Australia has been proactive in the Mode 4 regime.
Australia?s 2005 offer responds to requests from developing countries for WTO members to improve their 1995 Mode 4 commitments under Australia?s Doha Round offer: Australia?s 2005 offer specifies that foreign services suppliers must be sponsored by their employer. Sponsorship requires the employer to accept responsibility for key aspects of the visa holder?s welfare. It is also a means of achieving process integrity: sponsors are responsible for ensuring that relevant skill and salary requirements are met.
But all that Mode 4 requires is that the host economy should permit the transfer, relocation or immigration of foreign workers?clearly the concern of its private sector. As for the donor country, a proportion of its population should be eager to emigrate to ?improve prospects?, allied with a willingness on the part of private, and public suppliers of education to cater to expressed needs. There should also be wage differentials to motivate relocation, and information about openings. But many eager emigrants even fish out such information in order to undergo training and then signal their suitability (like, through a professional degree).
It is this eagerness to thrive in challenging conditions that has lead to an Indian diaspora of well over 20 million, numbering a million-plus Indians (NRIs and PIOs combined) in 11 countries and more than a lakh in 22 others. No wonder that India, along with Brazil, were the most vocal proponents for the expansion of emigration under Mode 4.
Clearly, our politicians and WTO negotiators India are perceptive enough to appreciate the development impetus that immigration would impart to India?s economy?which is much more than can be said of altogether too many other member states of the WTO.