Available literature suggests that a basic convergence of economic interests does exist
between the developed (labor-scarce) and the developing (labor-surplus) countries for
cross-border labor mobility. With remittances emerging as a formidable source of
external finance, labor sending developing countries do have significant interest in
boosting labor exports. Developed countries also have considerable interest for greater
utilization of foreign labor as their populations are aging, and many of their service
sector jobs are becoming less appealing to domestic labor force. GATS Mode 4 provides
a unique window of opportunity for both sides of the isle to reap benefits of greater labor mobility without being burdened by usual baggage of permanent migration. As labor
must return after the contract – as opposed to permanent or other forms of migration,
which are generally plagued with politically sensitive and economically significant
controversial affects, Mode 4 can be viewed as a great compromise for liberalization of
cross-border labor mobility. With the Doha Round now clinically dead, RTAs seem to be
a logical path to follow, at least as an interim measure, to promote greater liberalization
of temporary movement of natural persons across borders. The examples set by some of
the leading RTAs, such as NAFTA and Canadian FTAs, could well be emulated by
other RTAs around the world for liberalizing cross-border mobility among countries
having geographical and cultural proximity, strong similarities in GDPs, and large
differences in factor endowments. Economic research is indeed upbeat about potential
benefits of greater liberalization of cross-border labor mobility
Available literature suggests that a basic convergence of economic interests does existbetween the developed (labor-scarce) and the developing (labor-surplus) countries forcross-border labor mobility. With remittances emerging as a formidable source ofexternal finance, labor sending developing countries do have significant interest inboosting labor exports. Developed countries also have considerable interest for greaterutilization of foreign labor as their populations are aging, and many of their servicesector jobs are becoming less appealing to domestic labor force. GATS Mode 4 providesa unique window of opportunity for both sides of the isle to reap benefits of greater labor mobility without being burdened by usual baggage of permanent migration. As labormust return after the contract – as opposed to permanent or other forms of migration,which are generally plagued with politically sensitive and economically significantcontroversial affects, Mode 4 can be viewed as a great compromise for liberalization ofcross-border labor mobility. With the Doha Round now clinically dead, RTAs seem to bea logical path to follow, at least as an interim measure, to promote greater liberalizationof temporary movement of natural persons across borders. The examples set by some ofthe leading RTAs, such as NAFTA and Canadian FTAs, could well be emulated byother RTAs around the world for liberalizing cross-border mobility among countrieshaving geographical and cultural proximity, strong similarities in GDPs, and largedifferences in factor endowments. Economic research is indeed upbeat about potentialbenefits of greater liberalization of cross-border labor mobility
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