Movement of Human Resources: An Avenue for Regional Integration*
Tereso S. Tullao, Jr., Ph.D.**De La Salle University – Manila
August 2008
I. Introduction
A. World Bank Study
1. Increased number of migrants in most net-labor importing countries
2. Approximately 300,000 migrants within Southeast Asia in the 1970s
3. Approximately 4 million migrants in Southeast Asia
4. Approximately 2 million foreigners are working in Northeast Asia
B. Contributing factors to the massive movement of people across national boundaries
1. Globalization through the liberalization of services
2. Responses of nations to regional economic and demographic asymmetries
C. Regional Labor and Demographic Asymmetries
1. Potentials for regional advancements
2. Movement of people is a very sensitive issue for receiving countriesa) Impact of the inflows of foreigners on labor marketsb) Heavy pressures on social infrastructure
3. Movement of people incurs social costs on sending countries.
a) Over-dependence on remittances from overseas employmentb) Overvaluation of the real exchange ratec) Displacement of labor and domestic industriesd) Brain drain
II. Framework of Analysis in the Regional Movement of People
A. Trade Negotiation Perspective
1. Refers to the role of trade negotiations at various levels in facilitating orrestricting the flow of human resources across the region.
2. General Agreement on Trade in Services (GATS)
3. ASEAN Framework Agreement on Services (AFAS)
4. Asia Pacific Economic Cooperation (APEC)
5. Bilateral Agreementsa) Free Trade Agreements (FTA)b) Preferential Trade Agreements (PTA)
6. Components of agreements at various levels of trade negotiationsa) Horizontal and sectoral commitmentsb) Market access limitations*A paper presented at the Summer Institute of the Global Institute for Asian Regional Integration, Waseda
University, Tokyo, Japan on August 28, 2008. The paper was culled from the of Tullao and Cortez (2006)“Enhancing the Movement of Natural Persons in the ASEAN Region: Prospects and Constraints” submitted to AsiaPacific Research and Training Network on Trade, United Nations Economic and Social Commission for Asia andthe Pacific (ESCAP).
**Professor of Economics and Director of the Center for Business and Economic Research and Development at De
La Salle University – Manila, Philippines. Research assistance provided by Mr. John Paolo R. Rivera is greatlyappreciated.

1c) National treatment limitations
B. Labor Market Perspective
1. Refers to the market drivers on the regional flow of human resources
2. Creating excess supply of labor: sending countriesa) Lethargic economic performanceb) Rapid population growth can create an excess supply of labor.
3. Creating excess demand for labor: receiving countriesa) Rapid economic growthb) Slow population growthc) Other effects of the demographic dividend
4. Domestic regulationsa) Institutions and agencies involved in the management of external
flows of human resourcesb) Imposition of Taxesc) Managing the cost of temporary labor migrationd) Programs for the protection of overseas workers
Figure 1: Framework of Analysis in the Regional Movement of Human Resources
Trade Negotiation Perspective
Institutional Drivers on the Movement of Human Resources

Multilateral Level

Regional Level

Bilateral Level

WTO / GATS

AFAS / APEC

FTA

•Horizontal / sectoral commitments on mode 4•Market access limitations•National treatment limitations

Movement of natural persons (Mode4)

Foreign direct investment(Mode 3)

Mutual recognition
agreement

Domestic regulation
Flow ofSending countries

Receiving countries
HumanResources

Labor foroverseasemployment

Managementof temporary
labor
migration

Predeployment
Requirements

Sourcinglaboroverseas

Immigration policies

Managementof temporary
labor
migration

Preemployment
Requirements

Domestic regulation
Excess supply oflabor

Excess demandfor labor

Labor market

Labor market

Demand for labor

Supply of labor

Demand for labor

Supply of labor

Lethargic
economic growth

Rapid population
growth

Rapid economic
growthSlow population
growthLabor Market Perspective
Market Drivers on the Movement of Human Resources

2III. Facilitating and Restraining Factors of the Regional Movement of Human Resources
A. Trade Negotiation Perspective
1. AFAS Liberalization Measuresa) Expanded the coverage of liberalization compared with theliberalization measures committed by ASEAN countries in WTOb) Reduction in the level of restrictiveness in intra-ASEAN services tradec) Made moderate progress in improving transparency and predictability
in trade in services especially in cross border transactions andconsumption abroad supply modesd) Reduce the unbound commitments in various sectors and modes ofsupply and in reducing the restrictions under Mode 3 and Mode 4
2. Measures in addressing the regulatory differencesa) Regulatory Heterogeneity(1) Inadequate information(2) Captureb) Regulatory Homogeneity(1) Regulatory Convergence(2) Mutual Recognition(3) Regulatory Harmonization
3. Extension of preferential arrangements in AFAS
B. Labor Market Perspective
1. Regional Economic Dynamisma) Significantly improved income of peopleb) Improved standard of livingc) Expanded traded) Attracted Foreign Direct Investments (FDI)e) Stimulated the flow of people across the region
2. Market Driven Factorsa) Substantial rise in FDIb) Rise of Global Production Networks (GPN)
3. Pressures of economic and demographic asymmetriesa) Heightened economic and demographic asymmetries among countries(1) Net importers of labor services in the region(2) Ageing population(3) Demographic dividendsb) Push factors for overseas employment(1) High paying jobs in economically advanced countries(2) Domestic economic problems(3) Rapid population growth
4. Stringent immigration policies and pre-employment policiesa) Discrimination(1) Immigration policies(2) Pre-employment policiesb) Singapore(1) Gives incentives to employers in hiring highly skilled
professionals

3(2) Imposes heavy levies on unskilled workers in less preferredindustries and sectorsc) Brunei(1) Balance the need for foreign manpower and the need tomaintain national securityd) Vietnam(1) Rationalized the issuance of work permits to attract FDI andhighly skilled foreign workers(2) Eliminated work permit fees(3) Extended the period of engagement(4) Removed the requirement of local workers
IV. Conclusion and Recommendations
A. Establishment of mutual recognition agreements
1. Evaluate the capability of the service provider to render the services in orderto safeguard public interest and the welfare of the consumers.
2. At the regional level, improvements in market access on the movement of
natural persons can proceed through the establishment of MRAs on specificprofessions and occupations.
B. Lifting market access and national treatment limitations
1. Impediments to further trade in services through MNPa) Limited market accessb) National treatmentc) Preference for traditional sources of supply
2. Future rounds of negotiations under the AFASa) Reduce unbound commitments in various sectors and modes of supplyb) Reduce restrictions under Mode 3 and Mode 4c) Further liberalization in Mode 3
3. De-linking of Mode 4 from Mode 3 in trade accords
4. Move towards regulatory homogeneitya) Regulatory convergenceb) Mutual recognitionc) Regulatory harmonization.
5. Liberalization measures or management of temporary migrationa) Subjecting foreign workers to immigration laws and labor market testsb) Market perspectives(1) Exploiting the opportunities offered by the labor markets(2) Bilateral labor agreements should be pursued by concernedcountries to manage inflows and protect the overseas workers

4V. ReferencesThanh, V.T. & Bartlett, P. (2006). Ten Years of the ASEAN Framework Agreement on Services(AFAS): An assessment. REPSF Project 05/004
Tullao, T. (2007). Economic, Social and Demographic Diversity in Southeast and East Asia:
Hindrance or Opportunities for Regional Integration. Yuchengco Center.
Tullao, T. (2008). Demographic Changes and International Labor Mobility in the Philippines:
Implications for Business and Cooperation. Philippine Pacific Economic Cooperation
Committee (PPECC).
Tullao, T. & Cortez, M. (2004). Movement of Natural Persons Between the Philippines andJapan: Issues and Prospects. Philippine Institute for Development Studies. Discussion
Paper Series 2004-11.
Tullao, T. & Cortez, M. (2006). Enhancing the movement of natural persons in the ASEAN
Region: Opportunities and Constraints. Asia-Pacific Research and Training Network on
Trade.

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