International Trade in Services.pdf - DSpace at Khazar University

204 International Trade in Services
national treatment regulations may be horizontal rather than sector specific, they
still affect the operational flexibility of international contractors, including the
exposure of these contractors to risk and the possibilities for making profits and
repatriating earnings to headquarters. The prospect of operating an entity without
full control reduces the prospective gains from competition by foreign companies.
Finally, market access is only allowed in some countries if the appropriate
resources and input materials are inaccessible on the local market.
Table 6.5 shows the frequency of measures related to market access and
national treatments. While crossborder supply and consumption abroad are relatively
unaffected by restrictions, commercial presence (particularly for market
access) and the presence of natural persons (particularly for national treatment)
are the main target modes of supply for restrictions. The key negotiating objectives
for construction services as identified by WTO members in the Doha Round
of multilateral trade negotiations include, for commercial presence, various foreign
equity limitations, joint venture and joint operation requirements, discriminatory
licensing and registration procedures, and restrictions on the types of projects that
can be undertaken by foreign suppliers of services (WTO 2005). Policy makers in
developing countries may scrutinize their commitments in WTO and assess which
of these restrictions are deemed effective and least trade restrictive in terms of the
stated purposes.
Identifying market access restrictions on temporary transfers of foreign
project staff
In the construction service sector, with its intensive use of labor, the often stringent
limitations on the temporary movement of natural persons are particularly
serious impediments. These restrictions often disproportionally affect service
providers from poor countries in which there is an abundant supply of low-skilled
and medium-skilled construction workers willing to leave home and take up
physically demanding jobs abroad. The restrictions are seldom part of official
trade policy, but, rather, are formulated as part of labor market regulations and
immigration policy. It is therefore especially challenging for policy makers to
overcome these regulations through trade negotiations. It is also an area of political
sensitivity.
The range of limitations on the temporary movement of natural persons is
wide and covers measures from bans and quotas to economic needs tests and residency
requirements. Even if workers fulfill the criteria for work permits, the
administration of these documents for employees of international contractors can
be bureaucratic and tedious to the extent that the administration delays projects,
thereby increasing operating costs and making project execution unpredictable.
In particular, new market entrants, without a local base of professionals, are