International Trade in Services.pdf - DSpace at Khazar University

338 International Trade in Services
Addressing explicit trade barriers
Policy makers can identify explicit barriers to the trade in environmental services
according to the modes of supply described in an earlier section on the situation
and prospects in environmental services.
The major share of the international trade in environmental services takes
place through commercial presence. Thus, most restrictions faced by environmental
exporters will relate to Mode 3. Examples of typical restrictions affecting
commercial presence in environmental services include the following:
• An economic needs test for the approval of foreign investment in solid waste
management services, air pollution services, and technical testing and analysis
services
• Numerical quotas on the number of operating licenses available to pro -
viders of industrial wastewater treatment services that apply to local and
foreign investors
• A joint venture requirement for the supply of environmental, architectural,
construction, and related engineering services
• Regulation of contracts by value and number through an annual licensing system
in the construction and engineering segment
• Nationality or residency requirements for foreign establishment for companies
operating public utilities, for example, or to gain the right to open a practice in
professional services, such as architectural engineering
• A requirement that foreign businesses hire specific ratios of domestic staff to
foreign staff
• A reservation of some service sectors or activities for nationals or residents
The supply of environmental services through Mode 3 will often be accompanied
by Mode 4 supply to provide skilled and professional services directly to projects
and to maintain local offices. Environmental service firms use a variety of professionals,
such as scientists, ecologists, and specialized technicians. The deployment
of these professionals for temporary assignments in export markets as a complement
to foreign direct investment is common in the industry. The movement of
natural persons is a sensitive issue in many countries because of illegal immigration
and security concerns. Restrictions on Mode 4 may also arise from a country’s
overall immigration policy or specific labor market conditions. Common
examples of specific conditions for the approval of the entry of service suppliers
include the following:
• Labor market testing
• Residency requirements for intracorporate transferees and a requirement that
the foreign company employ specific numbers of local staff