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The frantic negotiations to try and save the Doha Trade Round brought GATS - the General Agreement on Trade in Services - into the spotlight for the first time. This little known agreement has far reaching implications for the IT industry, as it seeks to loosen up restrictions on the movement of IT professionals around the globe. In this series of articles, Get Somebody Now looks at some of the concerns that have been raised over this issue, and explores the extent to which they have any substance.



GATS - A Word of Caution From the ILO
Thursday, 03 August 2006

This discussion paper by Philip Martin from the International Institute for Labour Studies, an arm of the ILO, also takes a look at the debate surrounding the GATS. Philip's angle is less the impact of GATS on IT contractors in the most advanced economies, but on the development needs of countries in the 'South'. Here, the hope is that 'more orderly south-north migration could help to reduce the deep-seated imbalances in the global economy'.

Philip summarises the thinking behind this idea in these words, 'Proponents of more cross-border movement of service providers under Mode 4, what GATS calls the temporary movement of “natural persons", frequently begin with the estimate that, if OECD countries admitted enough migrants to increase their labor forces by three per cent, global GDP would rise by about US $150 to $350 billion, far more than Official Development Assistance'.

However, his research causes him to sound a word of caution, 'This paper urges caution in seeing GATS Mode 4 liberalization as a missing engine for development and a guide for managing labor migration. Most Mode 4 liberalization so far involves easier cross-border movements for managers and professionals employed by multinational firms. Expanding movements under Mode 4 could lead to more professional migration, settlement and fewer remittances and returns'. 

And in a passage of relevance to IT professionals, Philip warns, 'There are dangers in the other major proposals as well. Freeing up the movement of independent contractor service providers such as architects or accountants is likely to lead to the emergence of hard-to-police brokers who capture some or much of the difference in labor costs that motivates migration'. 

For the full paper, titled 'GATS, Migration & Labor Standards', follow the link here .  

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GATS & The Doha Round - A UK Contractor's View
Wednesday, 02 August 2006

The views presented here offer a very different perspective on the outsourcing issue from that of free traders Mckinseys. They reflect the concerns of UK-based contractors who fear the General Agreement on Trade in Services (GATS) being negotiated under the Doha Round will mean the destruction of their livelihoods.

These concerns centre on the ability of employers to bring in IT contractors on 'GATS passports', undercutting local operators and depressing earning. As Gerry McLaughlin puts it, 'It now looks like the floodgates will be open to a world full of cheap IT Contractors and IT Contractor providers. This is likely to happen sometime in the next 18 months. So, enjoy it while you can. God knows what the UK IT Contractor market will be like in 5 years time.  

For Gerry's comments in full and the debate they provoked, follow the link here .

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The 'GATS Visa' - An American View
Wednesday, 02 August 2006

This viewpoint is even more blunt than the UK contractor perspective also posted today on Get Somebody Now. Roger Sanchez presents the negotiations of the Doha Round as nothing other than talks on 'job destruction', and focuses his anger on the so-called 'GATS visa'.

Roger expresses his concerns with these words, 'The most alarming part of Annex C is that it mandates "substantial reduction of economic needs tests". Simply put, this means that employers could get GATS visas without justifications, and without regard to the economic impact on the domestic workforce'.

Justified or not, Roger's position reflects a widespread sentiment in the US and elsewhere, and is of interest for that reason alone. His 'Job Destruction' newsletter is also a useful reference point for the official WTO documents surrounding this issue.

For the full article, follow the link here

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