Trade Policy Note Final-rev08 - Development

problems. Labour earnings can be squandered on imported consumer goods without
any investment in the communities. MNP is also vulnerable to political factors which
can suddenly cut off access to markets.
Access for Service Suppliers
The inclusion of Mode 4 short term cross border movement of natural persons in the
GATS framework enables developing countries to acquire secure access for their
service workers as part of the overall balance of multilateral trade rights and
obligations. The main barriers to MNP are economic needs tests, that permit the entry
of foreign persons only when locals are not available to provide the services required.
MNP is the subject of bilateral agreements (MOUs) and is now being included in
FTAs. MNP is thus clearly an element of trade policy and trade negotiations, although
it has been neglected in the GATS schedules of commitments. 79
Skilled workers generally have better access to foreign markets, creating a shortage of
skilled workers in the “exporting” country which may perpetuate since skilled
workers are much more likely to remain in the “importing” country. MNP can in some
cases increase inequalities, if only persons with skills and higher incomes are given
access to foreign markets. This unequal treatment is reflected in the structure of
GATS commitments where bound access is normally provided to high level
employees and managers of TNCs, or for essential professionals and skilled workers,
such as medical staff. However, it is unlikely that GATS commitments would
exacerbate the flow of permanent emigration of skilled professionals in short supply
in economically advanced countries. Contrary to such movement which often
exacerbates “brain drain”, MNP commitments may actually reduce “brain drain” as,
given the security of access, individuals may see less need to seek permanent
residence in the importing country. The idea of a “GATS visa” has been suggested as
a means of facilitating entry of service suppliers covered under GATS commitments,
while ensuring the temporary nature of their stay.
A strategy for MNP
MNP, if appropriately designed at the inter-governmental level, can support the
attainment of the MDGs. However, this requires a clear strategy on the part of
governments to maximize the benefits and deal with the adverse factors mentioned
above. MNP exports should not be viewed as a manifestation of failure of national
economic policy but rather as a means of drawing benefits from globalization.
Governments should formulate clear, comprehensive strategies with regard to MNP
and incorporate these into national development strategies and trade policies.
Governments should view MNP from a competitive standpoint,.Workers can be
trained in skills deemed to be in demand on the world market, and niche markets can
be targeted.
Arrangements can be entered into with importing countries to upgrade skills to fit
needs. Such policies should include measures to encourage the return of skilled
migrants and incentives to discourage the emigration of people in occupations in short
supply in developing countries.
79 It should be noted that most of the GCC countries, which are major importers of labour, only became
WTO members at the end of the Uruguay Round, or subsequently, by accession.
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