The Temporary Movement of Natural Persons

1
The Temporary Movement of Natural Persons

• Challenges and Opportunities for Egypt
• Presented by Dr. Magda Shahin

2
Introduction

• For Egypt and the Egyptian private sector, the
  potential benefits of increased labor mobility
  under Mode 4 are considerable. As with other
  developing countries, Egypt has faced challenges
  negotiating at the multilateral level, which have
  rendered Mode 4 virtually impotent. In view of
  these challenges, Egypt has looked to bilateral
  and regional frameworks Pan Arab Free Trade
  Area, COMESA, and the European Partnership
  Agreement. Bilateral and regional agreements,
  however, are considered interim and partial
  solutions. The GATS framework must always remain
  as the foundation of any of these agreements. ?

3
Background

• Value of Egyptian services industry
• Current patterns of permanent and temporary
  migration
• Draw of the European labor market
• Migration management vs. TMNP
• Dialogue between the public and private sector

4
GATS Article I2(d) Mode 4

• The supply of a service by a service supplier
  of one member, through presence of natural
  persons of a member in the territory of any other
  member.

5
Main Barriers to Mode 4 Temporary Movement of
Natural Persons

• External Impediments
• Interpretation
• Classification
• Host Country Regulatory Regimes

• Internal Impediments
• Unemployment Skills Deficit
• Lack of Private Sector Awareness
• Lack of Ministerial Coordination

6
External Impediments

• Interpretation
• Confinement to intra-corporate transferee
• Bias toward high skills
• Distinguishing between service supplier and
  employment seeker
• Nature of the contract who qualifies as a
  subject of Mode 4 and under what circumstances?

7
External Impediments

• Interpretation Nature of the Contract
• Strict interpretation
• Persons who are employees in firms owned by
  nationals of the home country
• Self-employed persons of the host country
• Broad interpretation
• Persons who are also employees in firms that are
  not foreign affiliates, but are rather wholly
  owned by the host country

8
External Impediments

• Interpretation Nature of the Contract
• Annex on Movement of Natural Persons Supplying
  Services under the Agreement
• This Annex applies to measures affecting
  natural persons who are service suppliers of a
  Member, and natural persons of a Member who are
  employed by a service supplier of a Member, in
  respect of the supply of a service.

9
External Impediments

• Classification
• In the absence of a common approach to
  scheduling, members have inscribed their
  commitments by category ICT, BV, CSS, IP and job
  type manager, executive, specialist, etc.
• WTO categories should be employed in tandem with
  ILO ISCO

10
External Impediments

• Host Country Regulatory Measures
• Visa and administrative restrictions
• Non-recognition of qualifications
• Economic needs tests

11
Internal Impediments

• Unemployment Skills Deficit
• Unemployment concentrated among educated persons
  University graduates and vocational diploma
  holders constitute 80 of unemployed
• Labor force projected to increase to approx. 34
  million by 2020 (increase of 80)
• Mismatch between education supplied and skills
  demanded on the international labor market
• Quantity vs. quality skills catering to fill
  market gaps?

12
Internal Impediments

• Lack of Private Sector Awareness
• Commercial nature and tradability of services
  unrecognized
• Failure to capitalize on Mode 3 and Mode 4 the
  case of ORASCOM Mobinil
• Lack of transparency in negotiations government
  vis a vis private sector
• De facto exclusion of private sector from trade
  agenda
• Lack of coordination and exchange amongst service
  suppliers in Egypt

13
Internal Impediments

• Lack of Ministerial Coordination
• Lack of coordination between Trade and Labor
  Ministries Egypt-Italy Labor Agreement 2005
  (Readmission Agreement 2007)
• Lost opportunities for GATS Mode 4 liberalization
• France-Senegal Covenant 2006, potential model of
  preferential labor agreement

14
Policy Initiatives and Reforms to Facilitate Mode
4 TMNP

• Bilateral vs. Multilateral Agreements
• Egypt-EU A Win-Win Formula
• Public-Private Partnership
• Recommendations

15
Policy Initiatives and Reforms to Facilitate Mode
4 TMNP

• Bilateral vs. Multilateral Agreements
• Preference for bilateral arrangements
• Absence of MFN allows for preferences and
  obligations
• Significant shortcomings discriminatory skills
  targeting, unilaterally determined recruitment
  measures, focused on migration management vs.
  trade liberalization
• Challenge is reconciling GATS Mode 4 rights and
  obligations within Bilateral framework

16
Policy Initiatives and Reforms to Facilitate Mode
4 TMNP

• Public-Private Partnership
• Private Sector as a Key Stakeholder
• Unique knowledge of Egyptian services sector
  strengths and weaknesses
• Target and identify strategic areas to focus on
  in negotiations
• Benefit from increased competitiveness through
  skills-enhanced labor force
• Greater market access

17
Policy Initiatives and Reforms to Facilitate Mode
4 TMNP

• Public-Private Partnership
• Engaging the Private Sector
• Lack of organization in services sector lost
  opportunities for private and public interests
• Development of Egyptian Services Coalition
• Coordination between organized private sector and
  government for successful negotiations

18
Recommendations

• Ensure use of WTO/ISCO categories, and that all
  additional categories fall under the rubric of
  TMNP
• Sectors and sub-sectors of TMNP must be
  negotiated
• Preserve built-in safeguard mechanisms of the
  GATS structure
• As bilateral agreements are GATS-plus,
  strategic preferences should be maximized to
  enhance the competitiveness of Egypts labor
  force and services sector
• Seek avenues for recognition transitivity clause

19
Conclusion

• While acknowledging that bilateral and regional
  agreements are currently at the fore of
  negotiations, it is merely by default due to the
  ongoing stalemate at the WTO. These arrangements
  can never substitute for a well-functioning
  multilateral framework. Still with the
  weaknesses of bilateral and regional frameworks
  in mind, Egypt must forge ahead to capitalize on
  the potential of Mode4.
• Therefore, the need for a practical and
  operational mix of venues that merge additional
  preferences and capacity building in bilateral
  and regional frameworks with the inherent
  fairness and strength of a multilateral framework
  should be the ideal path for Egypt and other
  developing countries to take in their quest for
  Mode 4 liberalization