Foreign professionals in the United States: Regulatory impediments to trade

Journal of International Economic Law

Volumn 12, Issue 2, 2009, Pages 435-456

  Mishra, Deepak ^a   Mattoo, Aaditya ^b  

^a WORLD BANK   (United States)

^b NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 72449183662     PISSN: 13693034     EISSN: 14643758     Source Type: Journal    
DOI: 10.1093/jiel/jgp019     Document Type: Article

References (18)

1. In terms of the rules of the General Agreement on Trade in Services, quotas fall within the scope of Article XVI on market access while discriminatory taxation falls within the scope of Article XVII on national treatment. Domestic regulations such as licensing and qualification requirements and procedures fall within the scope of Article VI on domestic regulation, but could also fall within the scope of Article XVII if they discriminate in any way against foreign services providers.
2. One exception is the excellent working paper by Debjani Ganguly, 'Barriers to Movement of Natural Persons: A Study of Federal, State and Sector-specific Restrictions to Mode 4 in the United States of America' (ICRIER Working Paper No. 169, September, 2005), which covers ground similar to that in Section III of this article.
3. Data is available on the number of individuals entering the United States on specialty occu pation (H1B) visas, but this data records the number of entries so that an individual may be counted more than once depending on the number of times he or she leaves and returns to the United States.
4. This is largely attributed to poor pedagogy, outdated curricula, inadequate interaction between universities and industry, as well as restrictions on the entry of private domestic and foreign education service providers.
5. For example, see Economic Times (15 June 2006) and Financial Times (17 June 2006), Christian Science Monitor (May, 2006).
6. See Sanat Kaul, 'Higher Education in India: Seizing the Opportunity' (ICRIER Working Paper No. 179, May, 2006)
7. and Pawan Aggarwal, 'Higher Education in India: The Need for Change' (ICRIER Working Paper No. 180, June, 2006).
8. However, it is important to note that in so far as these state-level licensing boards in the United States operate under delegated authority of state governments and since their licensing conduct involves measures affecting trade in services, these measures are covered by the GATS and other trade agreements (except those that specifically carve out sub-national measures as some recent US FTAs have done.
9. Programs in some other countries are accredited, for example, under the Washington Accord (see footnote 11 subsequently).
10. Note that the benefits of preferential liberalization involving tariffs are ambiguous because the gains to consumers from cheaper imports may be offset by the loss in tariff revenue. But if a regulation was generating no revenue, then there is no revenue to lose and only the benefits of cheaper imports remain.
11. The 'rules of origin' currently applied in professional services trade depend on the mode of supply. With regard to the presence of natural persons, they typically relate to the nationality of the professional or to the jurisdiction in which the professional was licensed or qualified. With regard to commercial presence, they relate to who owns and/or controls the parent firm or to where the parent firm is incorporated and conducts 'substantial business operations'.
12. The Washington Accord, signed in 1989, is an international agreement among bodies respon sible 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 poten tially suitable for the purposes of the Accord.
13. 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.
14. According to information obtained from the Indian Ministry of Commerce, the major professional bodies in India covering chartered accountants, doctors, dentists and architects have not entered into MRAs with their counterpart bodies in any other country. The major initiative in this field has been with Singapore bodies after the signing of the Comprehensive Economic Cooperation Agreement in 2006. Although the Singapore body of doctors has accorded recognition suo motu to medical degrees obtained from the All India Institute of Medical Sciences (AIIMS) and Christian Medical College (CMC), Vellore they have been reluctant to agree to a broader MRA. In the case of architects, dentists, nurses and accountants, discussions among the bodies of the two countries are still continuing. As mentioned above, India has provisional membership of the Washington Accord on engineering qualifications.
15. Cross-sectoral issues arising in designing disciplines for domestic regulations are discussed in Aaditya Mattoo and Pierre Sauve, Domestic Regulation and Services Trade Liberalization (Oxford University Press and World Bank, Washington, DC 2003).
16. See Carlo Gamberale and Aaditya Mattoo, 'Domestic Regulations and Liberalization of Trade in Services' in B Hoekman, A Mattoo and P English (eds), Development, Trade and the WTO: A Handbook (ch 29 World Bank, Washington, DC 2002)
17. and Claude Trolliet and John Hegarty, 'Regulatory Reform and Trade Liberalization in Accountancy Services' in A Mattoo and P Sauvé (eds), Domestic Regulation and Service Trade Liberalization (The World Bank and Oxford University Press, Washington, DC 2003) 147-166
18. Article VII of the GATS on mutual recognition agreements and many preferential trade agreements allow variable geometry outcomes between foreign (unitary) countries and sub-national governments so as to deal with sub-national impediments to licensing. Thus the NAFTA foresees the possibility of an MRA between Mexican (nation-wide), Alberta and Iowa-licensed engineers or accountants. This is potentially a useful way to overcome variance in state-level licensing standards.