African Workshop on Economic Partnership Agreements Mode 4: Offensive Interests

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African Workshop on Economic Partnership
AgreementsMode 4 Offensive Interests

• 8-10 October 2008
• Addis Ababa, Ethiopia
• ------------------------
• Offah Obale, South Centre.
• obale_at_southcentre.org.

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Statistics on Mode 4

• Studies conclude that if advanced countries were
  to grant an annual quota for both skilled and
  unskilled temporary workers equivalent to just 3
  of their labour force, the resulting global gains
  would be about 150 billion annually. (26 World
  Economy 2003)
• In Lesotho, remittances receipts represented
  about 27 of GDP in 2001. This improves the
  countrys ability to finance development
  objectives, foremost of which are poverty
  reduction and improvement of human capital

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Mode 4

• Many African governments have embraced the
  artifice of mode 4 because it potentially offers
  them a vehicle through which to pursue a
  previously unattainable goal.
• Temporary emigration can help soak up
  unemployment, provide income to struggling
  communities and alleviate the balance of payment
  deficit.

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Mode 4

• Most African governments therefore prefer to
  export their lower skilled and unemployed, rather
  than their professionals.
• Wealthier destination states also face shortages
  in both the skilled and professional workforce
  and in less appealing services jobs.

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EC GATS Mode 4 Commitments

• Relate to the movement of high-skilled service
  providers, mainly intra-corporate transferees,
  business visitors and specialized persons, and
  typically those associated with establishments.
• Commitments for low and semi-skilled categories
  of service providers are left unbound, both in
  the cross sectoral and the sector-specific
  schedules of commitments.

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Mode 4 in SADC EPA DRAFT

• In mode 4, the EC in the SADC EPA has narrowed
  the scope of temporary presence of services
  personnel to cover only the managerial elite,
  independent professionals, graduate trainees,
  technical experts and typically those associated
  with commercial presence reflecting the
  requirements of transnational firms for their
  managers to work internationally.

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Mode 4 in SADC EPA DRAFT

• Commitments on a limited category of contract
  service suppliers (excluding contracts made
  through personnel agencies and those for the
  person to deliver a service directly to the
  public)
• In addition the contract service supplier must
  have at least three years professional experience
  (obtained after having reached the age of
  majority) in the sector of activity which is the
  subject of the contract.

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Regulatory framework in SADC EPA DRAFT

• Natural persons must possess the qualification
  and professional experience specified in the
  territory where the service is supplied, for the
  sector of activity concerned.
• Parties shall after a process of exchanged
  recommendations by relevant professional bodies
  in their respective territories negotiate an
  agreement on mutual recognition of requirements,
  qualifications, licenses and other regulations.
  This has the potential of constituting a barrier
  to trade in services and thus having a direct
  bearing on Mode 4.

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What scope then for African states in EPA
services negotiations on Mode 4

• The significance of Mode 4 commitments for
  African states remains limited due to the
  exclusion of relevant categories of service
  providers (low and semi-skilled), the extensive
  use of restrictions (stringent skills recognition
  requirements, economic needs test) and the lack
  of clarity in commitments which creates
  possibilities for discrimination and arbitrary
  interpretation of the commitments.
• African governments will have to address the
  issue of skill level coverage if the EPA
  negotiations are to cater to their mode 4
  interests.

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What scope for African states in EPA services
negotiations on Mode 4

• Annex C of HKMD calls for new or improved
  commitments on the categories of Contractual
  Services Suppliers, Independent Professionals and
  Others, de-linked from commercial presence, to
  reflect inter alia removal or substantial
  reduction of economic needs tests, indication of
  prescribed duration of stay and possibility of
  renewal, if any.

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What scope for African states in EPA services
negotiations on Mode 4

• Four key dimensions have to be stressed
• Commitments and recruitment
• Entry and return
• Legal and social protection
• Capacity building and development efforts
• These are the key features that determine the
  viability of an agreement on mode 4 and its
  development friendliness.

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What scope for African states in EPA services
negotiations on Mode 4

• 1) Commitments and recruitment
• On low/semi-skilled service providers
  commitments in categories of persons whose
  movement is de-linked from commercial presence,
  for whom verification of experience, competence
  and capability to supply the service should
  replace recognition of qualifications.
• Extend commitments beyond minimum qualifications
  to include diplomas and experience so that
  semi-skilled workers can be covered.
• Using new ways such as demonstrated experience to
  assess competence where there are non-formal
  qualifications involved.

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What scope for African states in EPA services
negotiations on Mode 4

• Widening a range of alternatives to proving
  competence (such as occupational certification by
  guilds, agencies in the home country, proficiency
  certificates, etc) and speeding up the process
  for verification to within three months.
• Setting up skills testing facilities.

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What scope for African states in EPA services
negotiations on Mode 4

• The elements of the proposed Mode 4 commitments
  for low-skilled workers would be as follows
• Low-skilled workers could be covered under a
  category termed Contractual service suppliers-2
  (CSS-2). They would include those

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What scope for African states in EPA services
negotiations on Mode 4

• screened and deployed overseas by manpower or
  recruiting agencies, and concerned government
  departments or guilds in the sending country.
• whose services are solicited temporarily by
  clients in the host country and contracted via
  government or government authorized agencies in
  the source country, without affiliate presence in
  the host country.

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What scope for African states in EPA services
negotiations on Mode 4

• This category would typically cover persons
  without formal academic qualifications but with
  on-the-job or other training and experience, and
  who go to the host country for short periods of
  six to nine months and not exceeding one year at
  any one time (unless otherwise indicated in the
  commitments) in order to
• Perform a service pursuant to a contract between
  the deploying government or authorized
  agency/occupational guild and a client located in
  the host country
• Fulfill qualification and competence test
  requirements in the form of local aptitude tests,
  apprenticeships and learning period, where
  presence in the host country is required for this
  purpose.

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What scope for African states in EPA services
negotiations on Mode 4

• 2) Entry and return
• National immigration frameworks should either
  recognize an EPA visa or service provider visa
  for scheduled categories of services workers or
  adopt special administrative rules and
  procedures distinct from usual immigration visas
  which would cover natural persons with
  professional skills and a specified minimum level
  of educational and other qualifications,
  including intra-company transferees,
  establishment based and independent contractual
  services suppliers backed by appropriate
  safeguards and legal procedures under the EPA.

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What scope for African states in EPA services
negotiations on Mode 4

• Legal and social protection.
• Host country monitoring and enforcement
  mechanisms as well as continued assistance and
  support provided by sending country agencies, are
  required to safeguard workers rights and
  interests. It may be worth considering the
  introduction of explicit penalties and sanctions
  under the horizontal commitments in Mode 4 and
  the conditions for applying such measures. For
  instance, it may be useful to explicitly state in
  the horizontal national treatment commitments on
  Mode 4, the kinds of actions that would warrant
  penalties and sanctions, including forced labour,
  misrepresentation of services, illegal
  subcontracting, discrimination on the basis of
  wages, gender or race etc. and that any such
  violations would be subject to appeal, review and
  heavy penalties for the employing party.

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What scope for services negotiations on Mode 4

• The transparency and disclosure of confidential
  information procedures in the draft text could be
  used for this purpose. But as is evident there
  needs to be institutional capacity in sending
  countries to inform workers about such protection
  and to assist workers in seeking their rights in
  case of abuse and exploitation.

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What scope for African states in EPA services
negotiations on Mode 4

• Capacity building and development efforts
• EPA services negotiations on Mode 4 need to go
  beyond a commercial and largely trade-oriented
  perspective to a more comprehensive one, where
  social, gender, institutional capacity and
  developmental issues are also considered
• But for this, greater cooperation between
  sending and receiving countries is an imperative.
  Also greater involvement is required within and
  among countries across the trade, migration and
  development communities.

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Tourism and Travel Related Services

• Trade in tourism is a major component of SADC
  countries economies
• In order to address market access opportunities
  for SADC countries, the tourism sector must also
  include related services of computer reservation
  systems and air passenger transport services
  (developed countries dominate essential features
  of the industry such as computer reservation
  systems and concentrate market power in travel
  and tour operator agencies)
• Developed countries have to reinstate
  regulations that ensure equity in usage of CRS
  systems.

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Mode 1Cross-Border Supply

• Requests in Mode 1
• Reduction in market access limitations, such as
  requirements for commercial presence.
• Sectors sought (computer related,
  telecommunications and educational services).
• Key question Does Mode 1 constitute export
  interest for SADC countries?
• With advancing technologies and resulting
  reductions in costs, some developing countries
  are projected to increase their capacity and
  competitiveness in cross border supply of trade
  in services.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

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Mode 2Consumption Abroad

• Requests in Mode 2
• Full commitments NT, MA, reduction of
  requirements for commercial presence,
  nationality, citizenship, numerical quotas.
• Sectors sought audio visual, logistics services
  and distribution services.

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Mode 3Establishment of commercial presence

• Requests in Mode 3
• Removal of foreign equity limitations,
  elimination of J/V requirements, No ENTs, no
  limitations on type of commercial presence, no
  limitations on foreign exchange and profit
  repatriation.
• Sectors soughtenergy, construction, computer
  related services, telecommunications,financial
  services, logistics, education, and distribution.
  
• Key questionsWhat does this mean for GATS
  flexibilities?

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Mode 4Movement of natural persons

• Requests in Mode 4
• De-link commitments from Mode 3 for CSS, IPs
• Visas and transparency
• Sectors soughtAccounting, architectural
  engineering, medical and dental services,
  services provided by midwives, nurses, Computer
  and related service, maintenance and repair of
  equipment,construction, e.t.c
• No African participation (except Egypt)

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Services trade in CARIFORUM-EC EPA

• The sectoral rules on tourism are portrayed as a
  win for CARIFORUM. In contrast to the other
  sectors, however, the tourism chapter is very
  soft. A commitment to us appropriate measures
  to control the anticompetitive practices of the
  big tourism wholesalers, computer reservation
  systems and travel agencies is important, but
  appropriate is very subjective and the EC may
  have little real influence on firms that operate
  on a global basis and largely through IT
  networks. Other promises to support tourism
  development and to encourage compliance with
  environment and quality standards are
  aspirational and will rely on monitoring and
  review, rather than enforcement

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• Thank you!!