Gains from Global Linkages: Trade in Services
and Movements of Persons*
A synoptic overview

14 May 1997
No. 788
International Organization for Migration

Greater emphasis by developing countries on accelerated development of the modern services industries and their increased participation in world trade in services through freer temporary movement of service providing persons hold enormous potential for creating new and better jobs and raising incomes in these countries. If these linkages are wisely used, it can reduce pressures for disruptive migration and help in better management of international migration. The message is contained in a new study just released by the International Organization for Migration in Geneva. It is prepared by the organization's senior consultant, Professor Bimal Ghosh.

The study shows, by way of illustration, that by competing in the world market only for those skill- and knowledge-intensive services for which developing countries have a comparative advantage and which can be delivered mainly through telecommunications system they can over time create between 6 and 30 million new jobs and an additional export income of $210 billion.

But these gains, the study warns, will remain largely unexploited in the absence of forward-looking commitments by trading nations on freer temporary movement of persons which is often essential for securing orders and completing the delivery of services. It underscores the point that by laying down, for the first time, the principles of liberalising such trade-related temporary movement of persons, the General Agreement on Trade in Services (GATS), adopted as part of the Uruguay Round trade accords, has opened up new opportunities and challenges for expansion of trade in services.

The study advances an array offorceful arguments, along with practical suggestions, for full use of these new opportunities by developed and developing countries alike—as much for efficiency gains in the world economy as for achieving better management of international migration. In particular, it advocates an internationally harrnonized special visa regime to facilitate and monitor trade-related temporary movements.

Helped by the new visa regime, skilled personnel from developing countries can raise their earnings through increased participation in trade in services. They would thus be under less pressure, and be less inclined, to migrate on a longer-term or permanent basis. And as they return home with improved knowledge and experience resulting from contacts abroad, "brain drain" turns into "brain gain" for these countries. The rich countries, in turn, gain from access to low-cost services and through higher efficiency of the world economy.

This thought-provoking study thus brings together into a single framework two of the most challenging issues of the current processes of economic globalisation — liberalisation of trade in services and management of international migration.

The study concludes:

As nations prepare themselves for the next round of negotiations on trade-related movement of persons in less than three years from now, they should bear in mind that trade-related labour mobility not only enhances global economic efficiency but can also serve as a partial substitute for longer-term migration by lessening the pressure to move for jobs or for permanent settlement.

Further "Highlights of Analysis and Findings upon request.

*Gains from Global Linkages: Trade in Services and Movements of Persons by Bimal Ghosh. Published by Macmillan, Houndmills, and London, UK ISBN 0-333-66s23-6; St Martin's Press, New York, ISBN 0-31216235-g, in association with International Organization for Migration

Source and for more information contact:

International Organization for Migration
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