from any other country who has qualified in South Africa must also benefit regardless of nationality. Just as in goods trade, a liberal rule of origin enables providers form other countries also to take advantage of preferential liberalization. The greatest benefits arise, however, from the elimination of unnecessary regulatory requirements for providers from all countries. Thus, US recognition agreements should cover all countries with regulations that ensure their providers meet US requirements. For example, if it can be established that India has basically the same educational and training system for engineers as South Africa, then it should also be made party to mutual recognition agreements that include South Africa, such as the Washington Accord.<sup>10</sup> The benefits to the US come from both increased competition and greater diversity of services.

It is possible to illustrate the impact of differential requirements on foreigners at the state level in the United States thanks to the availability of detailed US census data (which, as noted above, captures permanent rather than temporary presence of foreign providers). Econometric tests show the following (see Table 2): (a) First of all, state-specific variables, like per capita income and size of the population have a significant positive influence on a foreign professionals’ choice with regard to place or state of work, while the state’s geographic location (whether on the coast or on the border) seems to have an influence only on engineers;<sup>11</sup> and (b) Secondly, after controlling for the above variables, regulations governing the recognition of professional qualifications, training and experience and the licensing requirements at the state-level are found to have a significant affect on foreign presence in the state; states with a more stringent regulatory environment have a smaller share of foreign professionals in the total number of professionals than states with more liberal regulatory environment (shown in bold letters in Table 2).

In the case of accountants and auditors, we find that states which require in-state experience while applying for a Certified Public Accountants (CPA) license are likely to have 5.7 percent fewer foreign professionals than states that do not impose such a requirement (see the coefficient for variable R3 in Column 1, Table 2). The states that impose restrictions on in-state residency and experience for license and CPA certified experience are likely to have 9 percent fewer foreign professionals than states that do not impose any of those restrictions (sum of the coefficients for variable R3 and R1 in Column 1, Table 2). In case of physicians and surgeons, states that require foreign graduates to spend more years in residency program than natives to take the final professional examination, do not recognize Graduate Medical Examination (GME) completed in foreign countries (other than Canada) for credit towards license, and do not grant licenses to foreign eminent physicians, are likely to have 5 percent fewer foreign doctors than states that do not impose these restrictions (sum of coefficient for variable R1, R2 and R3 in Column 2, Table 2). Unlike accountants and doctors, the impact of statelevel regulations is found to be ambiguous in case of engineers. On the one hand, states that require additional experience to appear in the professional engineering (PE) examination for foreign professionals (with a degree that is not accredited by the Accreditation Board for Engineering and Technology, ABET), are found to have lower foreign presence relative to states that do not impose to who owns and/or controls the parent firm or to where the parent firm is incorporated and conducts “substantial business operations.”

> 10 The Washington Accord, signed in 1989, is an international agreement among bodies responsible for accrediting engineering degree programs. It recognizes the substantial equivalency of programs accredited by those bodies and recommends that graduates of programs accredited by any of the signatory bodies be recognized by the other bodies as having met the academic requirements for entry to the practice of engineering. Signatories are the relevant bodies from Australia, Canada, Chinese Taipei, Hong Kong China, Ireland, Japan, Korea, New Zealand, Singapore, South Africa, United Kingdom and the United States.   Bodies from Germany, India, Malaysia, Russia and Sri Lanka hold provisional membership status as they have been identified as having qualification accreditation or recognition procedures that are _potentially_ suitable for the purposes of the Accord. 11 We see no evidence that foreign-born professionals tend to locate in regions where domestic professionals are reluctant to locate, e.g. away from the coast.

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