Liberalising Temporary Movement of Natural Persons: An Agenda for the Development Round

25 Pages Posted: 20 Oct 2003

See all articles by L. Alan Winters

L. Alan Winters

University of Sussex; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Terrie Louise Walmsley

Purdue University - Center for Global Trade Analysis

Zhen Kun Wang

University of Sussex - Sussex European Institute

Roman Grynberg

Government of the United Kingdom - Commonwealth Secretariat

Abstract

We discuss liberalising the temporary mobility of workers under Mode 4 of the GATS, particularly the movement of medium and low skilled service providers between developing and developed countries. Such mobility potentially offers huge returns: a flow equivalent to three per cent of developed countries' skilled and unskilled work forces would generate an estimated increase in world welfare of over US $150 billion, shared fairly equally between developing and developed countries. The larger part of this emanates from the less-skilled, essentially because losing higher-skilled workers cuts output in developing countries severely. The mass migration of less skilled workers raises fears in developed countries for cultural identity, problems of assimilation and the drain on the public purse. These fears are hardly relevant to temporary movement, however. The biggest economic concern from temporary mobility is its competitive challenge to local less skilled workers. But as populations age and the average levels of training and education rise, developed countries will face an increasing scarcity of less skilled labour. Temporary mobility thus actually offers a strong communality of interest between developing and developed countries.

The remainder of the paper looks at the GATS provisions on Mode 4 and the commitments that have been made under it. The paper reviews several official proposals for the Doha talks, including the very detailed one from India, and considers several countries' existing schemes for the temporary movement of foreign workers. Many countries have long had bilateral foreign worker programs, and some regional agreements provide for liberal and flexible movement. These show what is feasible and how concerns can be overcome. We caution that, to be useful, any WTO agreement must increase mobility, not just bureaucratise it.

The paper concludes with some modest and practical proposals. We suggest, inter alia, that licensing firms to arrange the movement of labour is the most promising short-term approach to increasing temporary mobility.

Suggested Citation

Winters, L. Alan Alan and Walmsley, Terrie Louise and Wang, Zhen Kun and Grynberg, Roman, Liberalising Temporary Movement of Natural Persons: An Agenda for the Development Round. World Economy, Vol. 26, pp. 1137-1161, August 2003. Available at SSRN: https://ssrn.com/abstract=443784

L. Alan Alan Winters (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Terrie Louise Walmsley

Purdue University - Center for Global Trade Analysis ( email )

1145 Krannert Building
West Lafayette, IN 47907
United States

Zhen Kun Wang

University of Sussex - Sussex European Institute

Falmer, Brightonm BN1 9QN
United Kingdom

Roman Grynberg

Government of the United Kingdom - Commonwealth Secretariat ( email )

London
United Kingdom
(+44) 20 7747 6251 (Phone)
(+44) 20 7747 6235 (Fax)

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