Mode 4: The U.S. Case Jian Pak Trade and WTO Issues Team UN-ESCWA Presented at “Movement of Natural Persons and its Implications on Development in the Arab States” Cairo, 5-6 Sept. 2007

I. U.S. Negotiations on Mode 4 II. U.S. Schemes on Mode 4 - Characteristics - Temporary Admissions - Trends, Challenges, Alternatives III. Implications to ESCWA Region IV. Points to Consider CONTENTS

1.Evolution Tokyo Round -No services agreement, U.S. keeps pressing Uruguay Round -GATS enters into force (2000) –“Built-in Agenda” (Art. XIX) U.S. submits its proposals WTO’s CTS approves guidelines (2001) 2004 Framework or “package” (services briefly included)  Most contentious issues in the DDA I. U.S. Negotiations on Mode 4

I. U.S. Negotiations on Mode 4 (cont’d) 2. U.S. Goals and Requests Market access and national treatment Quality of commitments and complying Regulatory transparency Commercial presence (Mode 3) Reduce restrictions: ENT, multiple-entry visa (Mode 4) Liberalization of financial, telecom, professional, computer-related services among others

3. U.S. Offers I. U.S. Negotiations on Mode 4 (cont’d) Bound to market access and national treatment Includes horizontal commitments: TMNP, acquisition of land, taxation Offers scheduled commitments: many sectors/subsectors –Format: requires members to identify exceptions for each mode, sector and subsector

4. Ongoing Major Issues at the WTO for U.S. I. U.S. Negotiations on Mode 4 (cont’d) Regulatory Transparency/Information Access Definitions/Qualifications: accelerate mutual recognition Sub-contracting schemes: deepen sectoral commitments (timeframe issue) Service Personnel Categories: achieve uniform definition and coverage

II. U.S. Schemes on Mode 4 1.Characteristics of the Mode of Entry “Open door” policy (no set limit on total temp entry) Highly developed visa system Temporary entry increasing Responds to domestic economic needs Attempts to minimize any negative impacts on nationals (e.g., labour market testing) Special facilitation schemes for certain nationals, included on the basis of TAs

Migration categories (temp/perm, dual intent) Flexible and regulated caps Distinguishes entrants (occupation, country) Qualifications/legibility (Labour certification, high education/skills) Flexible duration of stay, renewals possible Movement of dependents Guarantee Rights: land acquisition, taxation, social security All subject to general visa conditions II. U.S. Schemes on Mode 4 (cont’d) 1.Characteristics of the Mode of Entry (cont’d)

2. Temporary Admissions (Non-immigrants) II. U.S. Schemes on Mode 4 (cont’d) CategoryVisa Type 1. Temporary visitors for business B1 2. Temporary workers and trainees H -“Specialty Occupations” (including nurses, non- agricultural workers & industrial trainees) H-1B (H-1C, H-2B & H-3) - Workers with extraordinary ability (assisting) O-1 (O-2) - Internationally recognized athletes/entertainers P-1 ~ P-3 - Workers in int’l exchange programs Q-1 3. Reps of foreign info mediaI-1 4. Exchange visitorsJ-1 5. Intra-company transferees (ICT)L-1 6. MTA, RTAs, FTAs Professionals (Treaty Workers) E-1/2, TC, TN,

3. Nonimmigrant Visas Issued (2006) II. U.S. Schemes on Mode 4 (cont’d) Source: DOS FY06 Annual Report and DOL H Visas (H-1A/B/B1/C, H-2A/B/R, H3, H4) J Visas (J1/2) Agreements (NATO, NATFA, Chile/Singapore/Australia FTAs)

4. A Detailed Look: H-1B Visas II. U.S. Schemes on Mode 4 (cont’d) H-1B H-4 H-2B H-2R H-2A H Cap * (‘000) H-1B Cap (Selected years)H Visas Issued * Excludes 20,000 for those with U.S. MAs, NPOs and government research labs Source: DOS FY06 Annual Report and DOL

5. Characteristics of H-1B Visas II. U.S. Schemes on Mode 4 (cont’d) Definition: Specialized workers admitted on the basis of professional education, skills and/or equivalent experience –“Specialty Occupations” : computer-related, physicians, professors, engineers, accountants… Duration: 3 years initially with possible extensions not exceeding six years Requirements for Employer: –Must prove no U.S. citizen is available to fill job –File process at DOL and USCIS –Abide by U.S. labour law (Adhere to prevailing salary, ensure rights, etc)

Country of Origin: –India (28% of total world H visas issued in 2006) –China (5% of total world H visas issued in 2006) Highest applications for systems analysis/ programming, computer-related, electrical/ electronics engineering and education occupations Median age = years old Median wage = US$50,000 per year 6. Trends in H-1B Visa II. U.S. Schemes on Mode 4 (cont’d)

Employment-based policies are demand-driven Inadequate mechanisms to measure labour- market demand Inter-connected system (Perm vs. Temp) Inflexibility of ceilings and actual admissions Processing/admin delays and complexity 7. Challenges for H-1B Visas II. U.S. Schemes on Mode 4 (cont’d)

8. U.S. Alternative Systems and Proposals II. U.S. Schemes on Mode 4 (cont’d) Lessons Learnt: Bracero Program Points System Assign Task Force/Commission Consistent requirements with labour market More efficient government apparatus/funding Expand mobility of H-1B worker More control on illegal workers Transparent policies, definitions/requirements

III. Implications on ESCWA Region Trade Agreements –Mode 4 Specific: NAFTA, Chile, Singapore, Australia U.S. TAs with Arab Region –General labour provisions/commitments: MEFTA, Oman –Supports national labour reforms: Bahrain, Oman, UAE –Open market access across recipients’ services regime: Bahrain –Free movement of persons (linked to investment/service suppliers): Jordan –Guarantees detailed workers’ rights: “Special Working Contract to non-Jordanians”

U.S. temp admissions for ESCWA region increased 11% in 2006, 21% in 2005 Highest increase for temp admissions (2006) in ESCWA region: Saudi Arabia (29%), Yemen (22%), Qatar (21%) and Egypt (20%) Av. increase in temp admissions ( ): Kuwait (20%), Qatar (16%) III. Implications on ESCWA Region (cont’d) Some Statistics for ESCWA Region

IV. Points to Consider Implications of U.S. temporary schemes on ESCWA region? Range of options for better market access, adjusted to national needs? Inter/Intra-regional policy coordination and dialogue (mechanisms)? Implementing commitments and administrative capacity required?

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