Learning by doing and subsequent labor turnover is an important channel of ITT. While
most of the attention in the (limited) literature has focused on labor turnover associated
with FDI, international movement of people has a potentially much larger role to play in
fostering ITT. In order to be most beneficial to developing countries, policies should
encourage temporary movement of people. The classic problem with movement of people
across borders is that this is often long-term and can give rise to a brain drain, in the
process being potentially negative for home country welfare. Such problems do not arise
if the movement is temporary, and returnees apply new skills and knowledge in the
domestic economy. Temporary movement is not a panacea—returnees need to be able to
apply their skills, which in turn depends importantly on the investment climate. However,
expanding the pool of people that have foreign professional experience could generate
pressure to implement needed improvements.
Negotiations over the temporary cross-border movement of people have already
been launched in the WTO. This is part of the services talks, as one mode of supplying
services is through the temporary movement of a service supplier (mode 4 of the GATS).
Although the focus of the GATS is limited to people providing services, the GATS
approach could be extended to apply to a category of personnel that relocate temporarily
in order to increase their human capital and acquire new skills. In effect, rather than
regarding such temporary movements as a developing-country export activity as is
currently the case under GATS, movements could also be regarded as a mechanism for
host countries to export knowledge to developing countries. While it may not be feasible
or appropriate to incorporate this into the GATS, the mode 4 precedent might be used to
negotiate a stand-alone arrangement under which developing countries are granted
additional temporary visa allocations for working in OECD countries that is motivated by
ITT objectives. This would also be an obvious way to provide concrete SDT to 25
developing countries.24 The mechanics of how such a visa allocation mechanism might
work could be similar to the GATS visa regime that has been suggested by a number of
WTO members (Mattoo and Carzaniga 2003)
Learning by doing and subsequent labor turnover is an important channel of ITT. While
most of the attention in the (limited) literature has focused on labor turnover associated
with FDI, international movement of people has a potentially much larger role to play in
fostering ITT. In order to be most beneficial to developing countries, policies should
encourage temporary movement of people. The classic problem with movement of people
across borders is that this is often long-term and can give rise to a brain drain, in the
process being potentially negative for home country welfare. Such problems do not arise
if the movement is temporary, and returnees apply new skills and knowledge in the
domestic economy. Temporary movement is not a panacea—returnees need to be able to
apply their skills, which in turn depends importantly on the investment climate. However,
expanding the pool of people that have foreign professional experience could generate
pressure to implement needed improvements.
Negotiations over the temporary cross-border movement of people have already
been launched in the WTO. This is part of the services talks, as one mode of supplying
services is through the temporary movement of a service supplier (mode 4 of the GATS).
Although the focus of the GATS is limited to people providing services, the GATS
approach could be extended to apply to a category of personnel that relocate temporarily
in order to increase their human capital and acquire new skills. In effect, rather than
regarding such temporary movements as a developing-country export activity as is
currently the case under GATS, movements could also be regarded as a mechanism for
host countries to export knowledge to developing countries. While it may not be feasible
or appropriate to incorporate this into the GATS, the mode 4 precedent might be used to
negotiate a stand-alone arrangement under which developing countries are granted
additional temporary visa allocations for working in OECD countries that is motivated by
ITT objectives. This would also be an obvious way to provide concrete SDT to 25
developing countries.24 The mechanics of how such a visa allocation mechanism might
work could be similar to the GATS visa regime that has been suggested by a number of
WTO members (Mattoo and Carzaniga 2003)
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