State of play - Mode 4 services

RUN UP TO HONG KONG/ WTOSPEAK: N K Singh, former member, Planning Commission

Mode 4 (movement of natural persons) is of particular interest to India as it has a large pool of well qualified professionals.

The Mode, at present, recognises two categories - business visitors and intra-corporate transferees. Attempts are on to include two new categories - contractual service suppliers and independent service suppliers.

India
It is seeking removal of limitations like the economic needs test and labour market tests. It is also seeking commitments in contractual service suppliers and independent professionals and delinking of these from commercial presence. It wants immigration to be treated differently from temporary movement of professionals.

European Union
The 25-member union has said that access to local labour markets should be clearly distinguished from economic immigration. In its revised offer to WTO members, it said that the numerical ceiling in the case of an economic needs test should be negotiated.

The revised European Union offer has liberalised movement of highly qualified persons in terms of permitted length of stay and the number of sectors that are covered.

Foreign companies will be able to send skilled employees to the EU for up to six months at a time. Legal services has been added to the list of sectors where self-employed service suppliers based overseas will be able to enter the EU for a period of up to six months.

United States
The US has a defensive interests in liberalising visa norms for skilled workers due to increased security concerns. It has not bound categories in Mode 4 and favours continuation of domestic regulations. There are limitations in several categories.

For example, salespersons are allowed entry for a 90 day period, while intra-corporate transferees -- managers,executives and specialists are allowed to stay for one year. The US has made requests for liberalisation in Mode 4 in sectors like finance, telecom and insurance.

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What's at stake?

The WTO needs to reignite trade as an engine of growth with its multiplier effect for sustained global recovery and ensure it is equally beneficial to all.

What should Kamal Nath do?

While adopting a flexible and constructive approach, he should seek a balanced and fair outcome for developing countries which did not receive symmetrical benefits earlier.

LEXICON

GATS: The WTO General Agreement on Trade in Services. It covers 12 sectors and 155 sub-sectors

Contractual Service Suppliers: Those who provide services on a contractual basis. India is seeking liberalisation in this category from other countries.

Protocols: Additional agreement attached to GATS. The second protocol deals with commitments on financial services. The third protocol deals with movement of natural persons.