Regional and Bilateral Arrangements for Labor Mobility: Potentials and Challenges?

1. Regional and Bilateral Arrangements for Labor Mobility: Potentials and Challenges? Md. Shahidul Haque IOM Regional Representative for the Middle East UN ESCWA – ALO Regional Workshop on “Movement of Natural Persons and its Implications on Development in the Arab States” Cairo, 5 – 6 September 2007

2. Introduction • International labor mobility is a trans-national process and neither destination nor origin countries can address all related issues acting alone. • Since the beginning of industrial civilization, people have been moving to provide services or to promote goods/services in foreign markets. • It was managed though consular and/or trade arrangements mainly between two countries/entities. MRF Cairo - September 2007

3. Introduction • International labor mobility remains a highly regulated affair between or among states. • Labor mobility can be viewed from two general perspectives: • Trade negotiation perspective • Labor market perspective MRF Cairo - September 2007

4. 191 million 86 million* ? ? Overall Migration and Mode 4 Migrants worldwide -- all categories labor migrants Temporary labor migrants Mode 4 MRF Cairo - September 2007 *ILO estimates (Sept 2006)

5. Overall Migration and Mode 4 Mode 4: a very small number of highly-skilled persons 191 million In financial terms: 86 million* considerable impact and potential ? 3% liberalization for labor mobility may lead to global economic welfare gains of US 300 billions for both developing and developed countries ? MRF Cairo - September 2007

6. Political Economy of Labor Mobility Migrants (rights) Markets (liberalization/profit) Destination Countries (sovereignty) Origin Countries (benefit) Transit Countries MRF Cairo - September 2007

7. Arrangements for Labor Mobility • Existing arrangements on movements for employment overseas are as follows: • Multilateral: no global arrangement for labor mobility. • Regional: mainly trade and integration agreements with provisions for labor mobility. • Bilateral: agreements for labor mobility and/or trade agreements with provisions for labor mobility. • Unilateral: policies of some countries for labor mobility. MRF Cairo - September 2007

8. Multilateral Arrangements • No comprehensive global system or instrument to manage labor mobility. • States jurisdiction to regulate migratory flows. • Differences exist between labor origin and destination countries. MRF Cairo - September 2007

9. Regional Arrangements involving Labor Mobility • Regional Trade Agreements (RTAs) mainly aim at decreasing trade barriers between parties (not to manage labor mobility). • It treats mobility mainly in four ways: • Comprehensively deals with labor mobility including permanent and temporary mobility. • Allows free movement of labor (entry to local labor market). • Provides limited movement of labor. • Provides limited movement only for service providers (no labor mobility) - GATS MRF Cairo - September 2007

10. Examples of RTAs and Labor Mobility • RTAs providing full mobility of labor: • European Union • Agreement on the European Economic Area (ECA) • European Free Trade Association (EFTA) • Common Market for Eastern and Southern Africa (COMESA) MRF Cairo - September 2007

11. Examples RTAs….. • RTAs providing market access for certain groups: • Caribbean Community (CARICOM) • North American Free Trade Agreement (NAFTA) and Canada – Chile Free Trade Agreement. • Group of Three (Colombia, Venezuela and Mexico) MRF Cairo - September 2007

12. Examples RTAs…. • RTAs using the GATS model with some additional elements: • ASIA Free Trade Area (AITA) • Euro-Mediterranean Association Agreements (Morocco and Tunisia) MRF Cairo - September 2007

13. Examples RTAs… • Agreements using the GATS model • Southern Common Market Agreement (MERCOSUR) • Agreements providing facilitated entry for labor (no market access) • Asia Pacific Economic Cooperation (APEC) Forum. • South Asian Association for Regional Cooperation. MRF Cairo - September 2007

14. Bilateral Arrangements involving Labor Mobility  Though a common mechanism to regulate inter-state labor mobility and much more widely used than RTAs, most temporary labor mobility takes place outside bilateral state arrangements.  BLA is an arrangement (Treaties and MOU) between states, regions and public institutions that provide for the recruitment and employment of foreign short or long term labor (OECD). MRF Cairo - September 2007

15. Bilateral Arrangements • By 1900, trading nations or entities concluded bilateral arrangements under “Treaties of Friendship, Commerce and Navigation (FCN)” to provide limited right for establishment/mobility.  In post WW – II, industrial nations resolved to labor recruitment from abroad to address domestic labor shortage. MRF Cairo - September 2007

16. Bilateral Arrangements • By end of 1960s, a number of European countries and the USA entered into bilateral agreements for employing foreign workers (most of these agreements were discontinued or replaced by the 1970’s). • By the early 1990’s: renewed interest in BLAs, faced with labor demand particularly European countries signed agreements with non European countries to facilitate entry of labor. • In Asia, by late 70s bilateral agreements have tended to address the labor mobility issues. MRF Cairo - September 2007

17. Objectives of BLAs • Can bring order and predictability in the management of labor markets (recruitment, placement, integration and return). • BLAs address flow of low-skilled labor in particular. • Origin Countries: • increase access to foreign labor market. • enhance economic development (remittance, transfer of skill/knowledge). • higher protection for migrants. MRF Cairo - September 2007

18. Objectives …  Destination Countries: • ease labor shortage and forge commercial and economic relations with origin countries. • assist integration of foreign workers in a host economy and society. • Reduce irregular migration • ensure return of migrants after end of the arrangement/labor market demands MRF Cairo - September 2007

19. Categories of Bilateral Arrangements  The most common categories of BLA are as follows: • Seasonal or guest worker agreement. • Contract/project linked agreement. • Agreements for trainee or other short-term training programs. • Working and holiday schemes. MRF Cairo - September 2007

20. Examples of BAs including BTAs for Labor Mobility • Canada Seasonal Agricultural Workers Program. • Australia – New Zealand Closer Economic Relations (ANZCERTA). • Japan – Singapore Free Trade Agreement. • US – Jordan Free Trade Agreement. MRF Cairo - September 2007

21. Migration Management and Mode 4 Developed along parallel tracks Governmental policies & practices for migration management Mode 4 Two sets of realities Mode 4: not a migration agreement ; it’s about trade in services MRF Cairo - September 2007

22. Migration Management and Mode 4 Two sets of realities Developed along parallel tracks Governmental policies & practices for migration management Mode 4 Mode 4: not a migration agreement ; it’s about trade in services Relevant regulatory framework: Framework governing migration MRF Cairo - September 2007

23. Conclusion  Regional and bilateral arrangements concerning labor mobility have evolved rapidly through broadening its scope, implementation process and institutional framework.  Difficult to measure effectiveness of these arrangements as they often pursue several objectives.  Success of these arrangements depend on the “political” will of the states and stakeholders. MRF Cairo - September 2007

24. Thank you indeed. MRF Cairo - September 2007