International Trade in Services.pdf - DSpace at Khazar University

2
Increasing Labor
Mobility: Options for
Developing Countries
Sherry Stephenson and Gary Hufbauer
Introduction
The free movement of labor is one of the four fundamental economic freedoms,
together with the free movement of goods, services, and capital. However, of the
four, it has met with the least receptivity by countries in the international economy,
whether developed or developing. Even the most spirited free traders—
countries such as Chile, Singapore, and the United Kingdom—have been reticent
to open their borders to accept foreign labor. Such countries and many others shy
away from a significant opening for natural persons from abroad, even when these
countries experience labor shortages at home.
The contrast between the desire to promote capital mobility and investment
flows and the reluctance to envisage corresponding labor mobility is stark. While
more than 2,800 bilateral investment treaties have been signed across the globe,
nothing equivalent exists in the area of labor. The number of trade agreements covering
services is growing at a rapid pace, but the willingness to incorporate meaningful
provisions on labor mobility as part of a service package is limited: most
agreements contain only modest market access opportunities for foreign workers.
Consequently, there is a considerable gulf between the liberalization of capital
and the liberalization of the movement of labor. Many developed countries are
capital abundant and benefit from the freer movement of capital, while many
developing countries are labor abundant and constrained in realizing the gains
from temporary labor movement. This situation has led to a significant loss in
the prospective income that could be acquired through greater labor mobility. The
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