GATS Mode 4 and Temporary Labour Migration: Need for Reforms

Author Name

Sarulakhmi. R

Author Address

Centre for International Legal Studies, JNU, New Delhi Email id: [email protected]


international labour migration, international borders, GATS Mode 4, WTO, Economic Need Test, transparency, labour recruitment, comparative study, EEA, NAFTA


WTO does not engage with labour per se as it did not deal with finance or investment per se.  As Steve Charnovitz maintains from GATT 1947 to WTO 1994 the multilateral trading system has paid little attention to labour. Nevertheless, labour has entered into the WTO regime through GATS Mode 4. The GATS is a multilateral framework on trade in services which applies between all member states. Its main objectives are to progressively liberalise trade in services, to encourage economic growth and development, and to increase the participation of developing nations in world trade in services. The service sector is one of the fastest growing parts of global economy constituting 74% of GDP in the developed countries and around 50-60% in the low income countries.

The Mode 4 is defined in Article 1.2(d) as ‘the supply of a service by a service supplier of one member, through presence of natural person of a member in the territory of another member.’ The labour recruitment through GATS necessitates the qualification of pre-admission and post-admission tests called Economic Need Test (ENTs). The ENTs require Visa and Work Permits, Credentials and Licenses, and Taxes and Service Providers. These tests fall under the category of labour certification for opening international borders for the free flow of labour. These policies affect international service transactions as WTO does not advocate universal norms for labour recruitment leading the present regime getting complex, non-transparent in nature and act as technical barriers for the free flow of labour. Hence, the objective of this paper is to develop a policy measure to make GATS Mode 4 transparent, through developing a universal measure for labour recruitment as suggested by developing nations and by doing a comparative study of the European Economic Area (EEA) and Trans-Tasman Travel Arrangement between Australia and New Zealand to the NAFTA to facilitate cross-border movement of migrant labour.  


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