RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSS/W/12
24 November 2000
(00-5077)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM INDIA
Proposed Liberalisation of Movement of Professionals under
General Agreement on Trade in Services (GATS)
The attached communication has been received from the delegation of India with the request
that it be circulated to Members of the Council for Trade in Services.
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I. OBJECTIVE OF THE PAPER
1. The objective of this paper is to assess the nature of liberalization that has taken place in
Mode 4 under the existing GATS framework and the extent to which the objectives of Article IV of
GATS have been operationalized through liberalization in this mode, of significant export interest to
developing countries. This paper then identifies the key barriers to the movement of Professionals andthe specific problems with the existing commitmen ts undertaken by Member countries.  Finally, it
suggests possible strategies and approaches to achieving meaningful liberalization in this area which
is of great relevance to many developing countries and could contribute to effective implementation
of Article IV of GATS.
II. EMPIRICAL ASSESSMENT
2. There is considerable asymmetry in commitments between different modes of supply with
minimum level of commitments having been taken by developed countries in mode 4, which is ofprimary interest to the developing countries. For instance, horizontal commitments in mode 4 are
subject to limitations in the case of 100 countries as opposed to only 4 countries for mode 2. The
effectiveness of even these limited commitments is further reduced through a host of limitations and
administrative hurdles.
3. Further, the number of aggregate entries for the main categories scheduled in the horizontal
commitments are as follows:
(a) Intra-Corporate Transferees 135
(b) Business Visitors    70
(c) Executives, managers and specialists 104
(d) Independent contract suppliers   3S/CSS/W/12
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4. Only 12 Members have made commitments in the category of independent Professionals,
including those providing services within a service contract. In other words, existing commitments are
largely linked to commercial presence which is of very limited use to developing countries who are
interested primarily in movement of independent professionals and other persons.
III. SPECIFIC PROBLEMS WITH THE COMMITMENTS
1. Nature of commitments
(a) Horizontal: Commitments in mode 4 are primarily horizontal and these horizontal
commitments are subject to many kinds of limitations. Further, they are bound for only a small subset
of service personnel related to commercial presence and at higher levels and very few commitments
extend to independent movement. The existing commitments also suffer from lack of clarity and
uniformity in some aspects. The personnel categories are either not well defined or differ widely in
their scope and coverage.
(b) Sectoral: The sectoral commitments for most Members are Unbound and refer to the
commitments filed under the horizontal schedules. And the horizontal commitments in turn are
subject to many conditions and limitations as mentioned above.  Mostly, they make the commitments
even more restrictive, allowing no predictable market access at all in the sectors of interest to
developing countries.
5. Thus, the extent of liberalization in mode 4 is quite limited given the fact that not only have
important sectors (where professional movement is important) been left out by many countries in their
scheduling exercise, but that even when such sectors have been scheduled, partial commitments with
critical limitations exist.
2. Other Limitations
(a) Administrative Procedures
6. The administrative and procedural problems effectively rule out market access for developing
country professionals.
(i) Restrictions on the entry and stay of service providers
7. One important restriction to the movement of natural persons originates in immigration and
labour market policies of individual countries. Te mporary movement of labour is not separated from
permanent movement of labour and therefore comes under the purview of immigration legislation and
labour conditions. These restrictions range from strict eligibility conditions for application and
processing of visas and work permits and limitations on the length of stay and transferability of
employment in the overseas market. All of these restrictions raise the direct and indirect costs of
entering the foreign market, thereby eroding the cost advantage of foreign service suppliers.
8. Wage parity is another restrictive eligibility condition which negates the cost based advantage
of developing countries in exporting labour-intensive services. Wage parity is an important part of the
labour certification process in many countries and constitutes an administrative hurdle delaying
issuance of work permits and visas.
9. There are also constraints in the form of quantitative limits on visas in important  developed
countries for movement of professionals.S/CSS/W/12
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10. Restrictions also apply to natural persons after they enter the foreign market such as
limitations on the transferability of work permits and mobility of the provider after he enters the host
country. There are also limits on the duration of stay for service providers.
(ii) Requirement for Economic Needs Test
11. Major entry barriers exist in the form of Economic Needs Tests (ENT), Local Market Tests
and Management Needs Tests to ascertain the need for entry as well as the number to be allowed to
enter. The ENTs are artificial barriers preventing free movement of labour.  Further, the conditions on
which they are based have not been clearly specified and defined, leaving complete discretion in their
application thereby reducing the predictability and certainty of the commitment.  Use of such
discretionary ENTs is widespread and in only three out of a total of 54 cases have criteria been
specified in the schedule
(b) Recognition of qualifications and licensing requirements
12. The ability of professionals to supply services in developed county markets is also adversely
affected by the lack of recognition of professional qualifications and licensing requirements. These
requirements may either prevent market access for the foreign service provider causing a rejection of
the work permit or visa application, or may limit his scope for work to specific activities once he
enters the overseas market, preventing him from practising.
13. Article VII of GATS provides for Mutual Reco gnition Agreements (MRAs) and also provides
opportunity to Members to participate in negotiations to such Agreements.  However, the provisions
of Article VII remain largely unused.
14. Developing countries have normally been kept outside the ambit of such MRAs, they being
limited to developed countries.  Besides, Members are not complying with notification requirementsunder Article VII:4.  Members have also not informed in advance regarding opening of negotiations
and interested Members are not getting adequate o pportunity to participate in them.  All this has
greatly reduced the scope for qualifications being recognised, leading to complete discretion and lack
of multilateral/bilateral norms.
(c) Payment of Social Security Taxes without corresponding benefits
15. The developing countries' professionals are being subjected to payment of social security
contributions in the host country even though they  are not eligible to get the benefits from such
contributions since their period of stay under GATS is invariably lower than the minimum period
required for such benefits to flow to them.
16. The direct or indirect effect of all these limitations is to raise costs of entry and operation for
service providers, reduce the scope for technology and skill transfer, and force substitution of
domestic with foreign service personnel.
IV. STRATEGIES & APPROACHES TO EFFECTIVE LIBERALIZATION
17. Given the unsatisfactory nature and extent of liberalization in Mode 4, alternative approaches
and strategies need to be adopted in this Round for bringing about effective market access in this
mode, thereby contributing significantly to the operationalization of Article IV: 1(c) of GATS.S/CSS/W/12
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1. Improving the Structure of Commitments
(a) Horizontal Commitments
• Horizontal Commitments to specifically include category of Individual Professionals in
addition to the various categories that currently exist.  Consequently, delinking of
commitments with mode 3 is to be achieved.
• Relevant criterion for determination of eligibility to a particular category needs to be clearly
specified.
• Uniform definitions and coverage of broader service personnel categories included in the
horizontal commitments need to be drawn up fo r bringing about greater certainty in these
commitments.
• Further expansion in the scope of categories covered by Horizontal Schedules by defining
coverage of "other persons" and "specialists" to include middle and lower level professionalsby specifying relevant criteria
(b) Sectoral Commitments
• Specific Sectoral / sub-sectoral  commitments needs to be taken in addition to the horizontal
commitments for Professional and Business Services where movement of professionals isimportant
• Sectoral commitments should be detailed and specific in terms of:
− Measures applicable to individual sectors
− Categories for which commitments apply
• All limitations, conditions etc. relevant to the individual sector/sub-sector to be clearly laid
down in sectoral schedules.
(c) Finer Classification of Categories
• Dis-aggregated categories of Service providers in Sectoral Schedules to be clearly specified
relevant to the market needs and potential for each sector/ sub-sector.
In order to achieve this objective, one approach that is suggested is the super-imposition of
International Standard Classification of Occupation (ISCO-88) of ILO on the WTO ServicesSectoral Classification List- MTN/GNS/W/120.  Th e ISCO has established an internationally
adopted classification of 9 major occupational groups.
For purposes of illustration and also the fact that this paper seeks to focus on Professionals,
Annex- "A" to this paper indicates how this superimposition can be done for the Occupational
Category Professionals in so far as it relates to Professional Services Sector of W/120.
Professionals are included in two Major Groups covered by ISCO-88:
− Major Group 2:  Professionals
− Major Group 3:  Technicians and Assistant ProfessionalsS/CSS/W/12
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• Commitments may be made by Members with respect to the specific sectors/sub-sectors as
contained in W/120 buttressed by specific occupational categories relevant to thesesectors/sub-sectors as contained in ISCO-88 as indicated in Annex "A".
2. Removal of Existing Limitations:
(a) Economic Needs Tests (ENT)
• Need for establishment of Multilateral Norms to reduce scope for discriminatory practices in
use of ENT.
• Clear criteria to be laid down for
− Applying such tests
− Establishing norms for administrative and procedural formalities
− Specifying how results of such tests would re strict entry to foreign service providers.
• Fewer occupational categories to be made subject to such tests and consensus achieved on
such categories.
• Specific suggestion is to exclude applicability of ENTs to specified occupational categories of
Professionals as contained in ISCO-88 under the relevant sectors/sub-sectors of W/120.
• In sectors/sub-sectors and Occupations where applicability of ENT is not excluded, its
application should be based on Multilateral Principles laid out in "Reference Paper on Use of
ENT".
The various Principles that such a Reference Paper should address could be:
− Definition of ENT
− Criteria (Qualitative / Quantitative) for introduction of ENT
− Procedures for application
− Guidelines for administration of ENT
− Transparency & Full Availability of information
− Duration & Review of ENT application
− 
(b) Administrative Procedures Relating to Visas, Work Permits
18. Multilateral guidelines/norms are necessary to tackle this area as it negates even the limited
market access available.
• The member countries should try to have a more transparent and objective implementation of
visa and work permit regimes in future.
• Temporary service providers should be separated from permanent labour flows, so that the
normal immigration procedures would not hinder the commitments made for temporarymovement. This could be achieved either by introducing a  special GATS Visa for categories
of personnel covered by horizontal and sectoral commitments undertaken by a Member inmode 4 under GATS or through a special sub-set of Administrative Rules and Procedures
within the overall immigration policy framework.S/CSS/W/12
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• The conditions for entry & stay in the case of both these alternatives should obviously be less
stringent than for permanent immigration.
• The above would be possible if the aforementioned recommendations on specificity, finer
classification and wider coverage of personnel categories and transparency are reflected in thesectoral and horizontal commitments so that minimum  discretion and greater degree of
certainty is achieved.
• The main features would include:
− Strict time-frames within which visa must be granted (2-4 weeks maximum);
− Flexibility for visas on shorter notice for select categories of service providers;
− Transparent and streamlined application process;
− Mechanisms to find out the status of applications, causes of rejection, and
requirements to be fulfilled;
− Easier renewal and transfer procedures;
− GATS visas for select Companies for use by its employees deputed abroad
temporarily;
− Adequate in-built Safeguard mechanisms to prevent entering into permanent labour
market;
(c) Introducing Norms to Address Social Security Issues
• Bilateral Totalisation Agreements need to be entered into by Members for overcoming this
problem.
• Exemption from such contributions for developing country professionals so that their
comparative advantage is not affected
(d) Strengthening GATS Norms and Disciplines on Recognition of Qualifications
(i) Implementing existing Notification Requirements under Article VII of GATS providing for
MRAs between Members.
19. India has already made a statement before the Council for Trade in Services (CTS) in its
meeting held on 6/10/2000 on this issue.  The operational features that would be involved are :
• Prompt compliance by all Members with Notification Requirements laid down in
Articles VII:4(a), (b) & (c)
• Full text of existing MRAs on recognition to be made available immediately to the WTO
Secretariat and circulated amongst all Members.  This should be done automatically in all
future cases
• Effective opportunities to be provided to developing country Members to join in negotiations
for establishment of MRAs
• CTS to regularly monitor implementation of all the above requirementsS/CSS/W/12
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(ii) Establishment of Multilateral Norms to facilitate MRAs among Member countries
• Norms for Professional Service sectors where no formal accreditation or licensing procedures
are required
− Suitable example is Software Services. In this case, criteria should be laid down for
minimum professional experience and minimum professional education.  The idea is
to lay down minimalistic international standards to reduce discrimination or excessivediscretion.
• Norms concerning equivalence of work-related and academic qualifications
− This would seek to draw an equivalence between on-the-job experience and academic
degrees so that this could facilitate entry requirements for specific sectors.
• Norms concerning broad- based equivalence
− Granting recognition through broad-based equivalence of qualifications and
standards. For this purpose, it is necessary  to establish bridging mechanisms in case
of divergence of requirements and existing standards between  host and home
countries.
− Compensatory system based on Local Adaptation Periods and Aptitude Tests for
recognition in host country needs to be developed without requiring actualharmonization of standards and qualifications between the host and home countries.
• Norms Concerning temporary licensing
− Provisions for temporary licensing to practice in the host country where such
licensing procedures are absent in home country e.g. in the case of Engineering
profession.
− Procedures and Sectors where such norms could be applicable to be multilaterally
determined.
• Establishment of Bilateral MRAs to be facilitated through this framework
V. MODALITIES AND ADMINISTRATIVE PROCEDURES FOR EFFECTING SUCH
LIBERALIZATION
• Special Session of CTS should discuss this as a horizontal issue as it is one of the most
important ways to operationalize Article IV  on increasing participation of developing
countries in world Services trade.  It should feature permanently on its Agenda.
• CTS should regularly monitor implementation of Article VII with respect to notification
requirements and also special opportunities provided to developing countries to enter into
such MRAs with developed countries.S/CSS/W/12
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• The Committee on Specific Commitments (CSC) should oversee the implementation of
existing specific commitments relating to Mode 4 as laid down in the "Decision on Terms ofReference for CSC - S/L/6 dated 24.11.1995".
− Specifically, the Administrative Procedures involved in granting visas, work permits
etc. are required to be administered in a reasonable, objective and impartial manner
according to Article VI:1.  Such administrative procedures significantly impact theactual working of the commitments undertaken on Mode 4 and hence, may be
discussed in CSC so as to achieve the objectives laid down in Article VI:1S/CSS/W/12
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ANNEX-A
Superimposition of ISCO-88 of ILO relatin g to category of Professionals on the
Professional Services sector of Services Sectoral Classification list-MTN/GNS/W/120
W/120 Service sector classification Int ernational Standard Classification of
Occupations (ISCO-88)
1A. Professional Services Major group 2: Professionals
a. Legal Services 242 Legal professionals
2421 Lawyers
2422 Judges
2429 Legal professionals not
elsewhere classified
b. Accounting, Auditing and Book-keeping
Services241 Business Professionals
2411 Accountants
Major Group 3: Technicians & Associate 
 Professionals
343 Administrative Associate Professionals
3433 Book Keepers
d. Architectural Servicesg. Urban Planning & Landscape
Architectural Services214 Architects, Engineers and related
professionals
2141 Architects, town and traffic
planners
2149 Architects not elsewhere
classified
e. Engineering Servicesf. Integrated Engineering Services214 Architects, Engineers and related 
professionals
2142 Civil engineers
2143 Electrical engineers
2144 Electronics and
telecommunications engineers
2145 Mechanical Engineers
2146 Chemical engineers
2147 Mining engineers, metallurgists
and related professionals
2148 Cartographers and surveyors
2149 Engineers and related
professionals not elsewhere
classified
h. Medical and Dental Services 222 Health professionals (Except Nursing)
2221 Medical Doctors
2222 Dentists
2229 Health professionals (except
nursing) not elsewhere classifiedS/CSS/W/12
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W/120 Service sector classification Int ernational Standard Classification of
Occupations (ISCO-88)
322 Modern Health Associate Professionals
3221 Medical Assistants
3222 Sanitarians
3223 Dieticians & Nutritionists
3224 Optometrists & Opticians
3225 Dental Assistants
3229 Modern Health Associate
Professionals not elsewhere
classified
i. Veterinary Services 222 Health Professionals
2223 Veterinarians
322 Modern Health Associate Professionals
3227 Veterinary Assistants
j. Services provided by midwives, nurses,
physiotherapists and paramedical
personnel222 Health Professionals
2224 Pharmacists
223 Nursing & Midwifery Professionals
2230 Nursing & Midwifery
Professionals
322 Health Associate Professionals
3226 Physiotherapists & Related
Associate Professionals
3228 Pharmaceutical Assistant
323 Nursing & Midwifery Associate
Professionals
3231 Nursing Associate Professionals
3232 Midwifery Associate
Professionals
B. Computer and related Servi ces 213 Computing professionals
2131 Computer systems designers and
analysts
2132 Computer programmers
2139 Computing professionals not
elsewhere classified
312 Computer Associate Professionals
3121 Computer Assistants
3122 Computer Equipment Operators
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