Notes
1. Between 1950 and 2000, global merchandize exports grew by more than 100 times – from
around $62 billion to $6.3 trillion – when exports from developed and developing countries
increased by 106 times and 112 times, respectively. See Bora et al. (2004, pp. 2-3) for details.
2. As elaborated below, some of the leading works include: Moses and Latnes (2004),
The World Bank (2006), Anderson and Winters (2008), Winters and Mattoo (2011) and
Machetti and Roy (2012).
3. Recent works, however, indicate that on a value-added basis services trade may account for
around 40 percent of global trade. See Balwin and Sighezza (2010, p. 19).
4. Some estimates, however, indicate that the proportion of international migrants was rather
2.7 percent in early 2000s. Czaika and Haas (2013) maintain that the proportion of international
migrants has steadily decreased from 3.1 percent of the world population in 1960 to 2.9 percent
in 1970, 2.7 percent in 1980, 2.8 percent in 1990, and 2.7 percent in 2000. During the same
period, the world population grew much faster – increased from 2.98 billion to 6.07 billion,
reflecting 104 percent increase, compared with 80 percent increase in global migration.
5. For greater details, see OECD (2002), UN (2002), the World Bank’s Migration and Development
Brief of 2010 through 2012, Stephenson and Hufbauer (2010) and Dowlah (2011).
6. In 2007, for example, per hour wage in readymade garments industry in Bangladesh, India,
China and Mexico were $0.31, $0.51, $1.44, and $2.17, respectively, in 2007 (Kowalski and
Molnar, 2009). Per hour wage in readymade garments industry in Bangladesh, India, China
and Mexico were $0.31, $0.51, $1.44, and $2.17, respectively, in 2007 (Kowlaski, 2009).
7. For greater details on convergence of economic interests in cross-border labor mobility, see
Harris (2005), Cho, Dowlah (2012) and Martin (2009).
8. See O’Rourke and Williamson (1999) and Williamson and Hatton (2005) for greater details.
9. According to UNCTAD (2012, pp. viii-ix), “Brain drain” generally refers to the emigration of
high-skilled people with university-level education, such as physicians, engineers, scientists,
managers and lawyers, as well as entrepreneurs. The same UNCTAD report also points out
that the number of high-skilled international migrants climbed from 16.4 million in 1990 to
26.2 million in 2000 (the latest year for which data are available), and 26 percent of all
international migrants are tertiary-educated, while only 11.3 percent of the world labor force
have tertiary education.
10. This argument has been around for a long time. See for details, Nakosteen and Zimmer
(1980) and Gordon and McCormick (1981).
11. As economic growth partly stems from human capital accumulation, the loss in human
capital induced by the emigration of relatively skilled workers reduces productivity and
income per capita, and slows down growth in the labor-sending economy (Miyagiwa, 1991;
Reichlin and Rustichini, 1998).
12. For example, Indian information technology workers, who worked in Silicon Valley with
temporary visa, returned to India boosting Indian IT exports from $150 million in 1990 to
$23.1 billion in 2008 (NASSCOM, 2009).
13. See O’Rourke and Sinnott (2006) and Greenaway and Nelson (2006) for rising sentiments in
western countries regarding immigrants and refugees.
14. As Anderson and Winters (2008) note, there “is greater doubt among predominantly
Christian western countries of allowing more immigrants from Moslem countries where
recent global terrorism seems to have emerged”.
15. The other GATS modes are: Mode 1-cross-border supply – supply of service from the territory
of one member to another-analogous to trade in goods; Mode 2-consumption abroad – supply
of service in the territory of one member to the service consumer of another member, such as
tourism; Mode 3 – commercial presence – supply of service by a service supplier of one
member in the territory of another member through commercial presence.
16. The possibility of “overstaying,” however, cannot be ruled out as it a common concern for
any type of immigration. Studies suggest that nearly half of illegal immigration originates
from legal entries as tourist (Gimpel and Edwards, 1999). For enforcement difficulties with
GATS Mode 4, some propose posting of a bond as a solution, and for the brain drain issue,
some propose an appropriate tax and/or compulsory service policies. See Hatcher (2003) for
greater details.
17. In fact, high income countries scheduled 45 percent of their services sectors and low and
middle income countries scheduled only 12 percent of theirs at the time of the emergence of
the WTO (Hoekman, 1996).
18. For greater details on such barriers, see Chaudhuri et al. (2004).
19. Borchet et al. (2010) show that service barriers both in high-income and developing countries
are higher than those for trade in goods, and that emerging markets have barriers that are on
average substantially higher than OECD countries.
20. The September 8, 2012 issue of The Economist declared, “The Doha trade talks are dead.
Replace them with a rapid new deal, called the ‘Global Recovery Round’”.
21. Indisputable estimates of potential benefits and magnitude of temporary movement of labor, as
envisaged by the WTO Mode 4, are not available, but calculations made by Karsenty (2000) show
that such trade will constitute between 1 and 2 percent of the total two-way trade in services.
22. Under RTAs, a small group of countries agree to impose lower barriers to trade within the
group than to trade with non-member nations. RTAs, thus, imply both trade liberalization
(for its members) and trade discrimination (against non-members). Currently, an estimated
250-plus RTAs cover over one-third of global trade.
23. The role of the RTAs as an alternative to multilateral negotiations has been explored here
keeping in mind that ordinarily RTAs may divert more trade than they create, and they
disproportionately benefit the hub (the rich country) than the spokes (developing countries).
See The World Bank (2005) and Baldwin and Freund (2011). This paper, however, does not
address another alternative instrument for migration – bilateral labor agreements (BLAs). In
recent years, many advanced countries, including the USA, the EU, and Canada, have been
using BLAs for promoting and regulating the flow of unskilled or semiskilled workers. See
Stephenson and Hufbauer (2010) for greater details.
24. The following discussion on leading RTA provisions on labor-mobility across borders is
primarily based on Stephenson and Hufbauer (2010, pp. 29-68). Also see Martin (2009),
O’Rourke (2009) and Medina and Sobel (2009).
25. Then Mexican President, Salinas de Gortari made this point quite clear when he asserted,
“the whole point of NAFTA for Mexico is to be able to export goods and not people. That
means creating jobs in Mexico”. Cited in Fernandez-Kelly and Massey (2007, p. 105).
26. The TN visas, however, do not grant equal treatment to the Canadians and the Mexicans.
Canadians are exempt from most guest worker visa regulations, including the need for the
employing sponsor to get prior approval to hire someone from abroad. Canadian citizens can
present documents and credentials to immigration officials at the port of entry. Mexicans, on
the other hand, must have an employer submit petitions and the Labor Condition Attestation
(a document the employer signs saying that the wages and working conditions will be the
same as for Americans, among other things). The US Department of Homeland Security
web site shows that during 1996-2003, 572,992 TN visas were issued for Canadian citizens,
while the number for Mexicans stood at 12,449. In recent years, number of TN visas issued by
the US Government were as follows: 8,476 in 2008, 7,327 in 2009, 7,090 in 2010, 7,398 in 2011,
and 7,165 in 2012. Based on US State Department web site, accessed on September 19, 2013.
27. Besides TN Visa, and outside the scope of NAFTA, the USA also grants Treaty Trader (E-1)
and Treaty Investor (E-2) visas for citizens of countries with which it maintains treaties of
commerce and navigation. Such visas can be a nonimmigrant visa for temporary stay, or an
immigrant visa for permanent residence, but candidates must be engaged in substantial
trade, including trade in services or technology, in qualifying activities, such as international
banking, tourism, and so on, principally between the USA and the treaty country; or develop
and direct the operations of an enterprise in which a person has invested a substantial
amount of capital. In 2012, the USA issued 45,110 such visas. The USA also grants a large
number of B-1 visas for temporary visitors for business – in 2012, 35,341 such visas were
issued. Based on US State Department web site, accessed on September 20, 2013.
28. The discussion on leading RTA provisions on labor-mobility across borders, especially for
non-NAFTA RTAs, is primarily based on Stephenson and Hufbauer (2010, pp. 29-68). Also
see Martin (2009), O’Rourke (2009) and Medina and Sobel (2009).