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Mode 4: Trade, Migration and Quaker Grey

Tom Head

Quakers are following many issues at the Hong Kong WTO meetings, but one of the thorniest is something called Mode 4. This agenda item is part of the negotiations under GATS, the General Agreement on Trade and Services.

In my training as an academic economist, I haven’t seen much of a distinction between goods—physical products like footballs and DVD players—and services—intangibles such as accounting and haircuts. Conceptually, economists often make no distinction. Both goods and services are bought and sold in markets, and the market models, including the analysis of market failures, apply pretty well to both tangible goods and intangible services. That is, until you get to thinking about the fact that services means people. And so the analysis gets a bit more complicated when you go global, taking people across borders.

Voices of Migrant Workers - M. Kunz

People don’t move across national boundaries quite as easily and simply as products do. You can fill up a container with furniture or clothing, ship it to the other side of the earth, and that’s that. But people are different. In fact, when we discover a shipping container full of human beings, it is front page news and we know that something has gone terribly wrong. We are rightly outraged by the mistreatment and exploitation that can and does occur, in instances as dramatic and extreme as this one and in other situations that are not quite so extreme but are nonetheless shocking and unacceptable.

Some trade in services is relatively easy to understand and does not present terribly difficult issues for trade negotiation. By now, we are all familiar with call centers. Thanks to changes in telecommunications and computer technology, we might very well find ourselves talking to someone in India in order to make a hotel reservation for Des Moines, Iowa. That mode of trade in services is easy to understand and not so problematic.

But not all forms of service can be provided over phone lines and the internet. Some international provision of services means that a person must actually cross a border and go to another country to provide the service. A professor may be contracted to lecture at her university’s branch campus in another country. A soft drink executive may be stationed abroad for a period. A telecommunications expert from one country may go to another for six months to set up one of those infamous call centers. All of these cases come under what the WTO calls ‘Mode 4,’ that is, the temporary movement of natural persons (workers) across borders to provide services.

If ‘Mode 4’ employment were limited to highly-skilled workers, the subject might not be all that controversial. For the most part, these professionals can take care of themselves. But if the ‘Mode 4’ concept is extended to unskilled workers, many fear that this will become something of a global guest-worker program with little or no protection for workers. And this is where we really get into a grey area: Is Mode 4 a trade policy or a migration policy?

Migration Panel       - M. Kunz

If Mode 4 is purely a trade matter, it is reasonable that WTO agreements cover the matter. But if this is a migration matter, the issues of human rights and labor standards start to become crucial, and this goes way beyond the mission and mandate of the WTO. Mode 4 could be a nightmare for lower skilled and less educated workers trapped in an abusive labor contract. Yet some developing country negotiators at the WTO see Mode 4 movement as a privilege which the well-educated and highly-skilled workers of the rich and powerful countries already possess while businesses from poorer countries do not have the same privilege to send their employees around the globe. In this sense, broadening Mode 4 becomes a matter of equity.

So, is Mode 4 trade policy or is it migration policy? Should Mode 4 be extended to all as a matter of fairness or kept very limited in order to protect the poor and vulnerable? It is in these grey areas that Quakers have found themselves working. The work out of the American Friends Service Committee emphasizes the history of guest worker abuses in the United States and cautions against an expansion of Mode 4 that might become nothing other than a global guest worker program. The Quaker United Nations Office in Geneva is hearing from poorer countries who are asking for access in services that is parallel to what the rich countries seem to so easily have. We have been comparing notes and having good conversations here in Hong Kong, hearing from a broad array of actors in this arena. We’re not quite all at the same place, but it is clear that we share common concerns and are working toward what are ultimately common goals.

While it may be something of a ‘cop-out,’ my own conclusion is that Mode 4 services are trade policy that easily spills over into migration policy. It is not strange that poorer countries would ask for fair and equitable access to trade in services. And it may sometimes turn out that workers will come and go across borders just fine, completing their contracted work without any migration issues ever arising. But, then again, they may not. And so, whether or not we are dressed in Quaker grey, we are quite definitely Quakers working in a grey area. Thinking through the migration implications of services employment across borders is critical. Quaker agencies have begun some good work in this regard, and I am encouraged that the dialogues in Hong Kong are drawing out deeper and fuller understanding of a very challenging issue.

Tom Head is Professor of Economics at George Fox University, Newberg, Oregon, USA. He serves on the Quaker United Nations Committee—Geneva and is at the Hong Kong WTO Ministerial Conference as a member of the Quaker Peace & Social Witness delegation.
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