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Experience in the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu

WTO Symposium MODE 4 OF THE GATS – TAKING STOCK AND MOVING FORWARD Geneva, 22-23 September 2008 Session 4: Mode 4 in practice – Perspectives from immigration, labour and trade. Experience in the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu. Professor Shin-yi Peng

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Experience in the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu

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  1. WTO SymposiumMODE 4 OF THE GATS –TAKING STOCK AND MOVING FORWARDGeneva, 22-23 September 2008Session 4: Mode 4 in practice– Perspectives from immigration, labour and trade

  2. Experience in the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu Professor Shin-yi Peng Tsing Hua University

  3. Outline • Mode 4 Trade in East Asia • General Review of the GATS Commitments(& the RTAs) • Existing Regime for Labor Mobility (within GATS mode 4 Framework) • Current Flows of Foreign Natural Persons in Chinese Taipei • Legal Framework • Statistical Analysis • Potential Implications and Main Concerns • Policy Debates and Legal Issues • As a Host Country • As a Home Country • Mode 4 Liberalization • The APEC Experience • Concluding Remarks

  4. Mode 4 Trade in East Asia • General Review of the GATS Commitments • Existing Regime for Labor Mobility (within GATS mode 4 Framework)

  5. Mode 4 in East Asia--GATS Commitments

  6. Regional Context More successful ? The empirical facts disprove that! • ASEAN? • APEC? • Japan-Singapore FTA? • Others?

  7. Chinese Taipei-- GATS Commitments and the Existing Regime Labor Law and Major Regulations GATS Commitments • Employment Services Act • Enforcement Rules • Business visitors • Intra-corporate Transferees • Contract Suppliers • The Reviewing Standards and • Employment Qualifications for • Foreigners Engaging in the Jobs • Specified in the Employment • Service Act • Other Law or Regulation: • Attorney Act • Certified Public Accountant Act

  8. Chinese Taipei-- GATS Commitments and the Existing Regime Mode 4 Commitments Labor Law e.g., Business visitors e.g., Less skilled workers e.g., Annex on Mode 4

  9. Current Flows of Foreign Natural Persons in Chinese Taipei • Legal Framework • Statistical Analysis

  10. Legal Framework—Employment Services Act (Article  46) • Unless otherwise provided for in the present Act, the work a Foreign Worker may be employed to engage in within the territory of Chinese Taipei is limited to the following:

  11. 1. Specialized or technical work; • 2. Director/Manager/Executive of a business invested in or set up by foreigners with the authorization of the government; • 3. Teacher at schools; • 4. Full-time teacher teaching courses on foreign languages at a short-term class registered for supplementary schooling in accordance with the Supplementary Education Act; • 5. Sports coach and athlete; • 6. Religious, artistic, and show business work; Mode 4 Commitments under GATS

  12. 7. Crew member of a merchant vessel, working vessel, and vessel ad hoc permitted by the Ministry of Transportation and Communication; • 8. Marine fishing/netting work; • 9. Household assistant; • 10. Work designated by the competent authority in response to major construction projects or economic/social development needs; and • 11. Other specialized work ad hoc approved by the competent authority due to the lack of such specialist in the domestic employment market and the business necessity to retain the service of such specialist therefore. Outside the GATS Commitments

  13. Special Professions or Technical Assignments • 1. Architecture and civil engineering.2. Transportation.3. Tax and financial service.4. Real estate agency.5. Immigration service.6. Attorney ( legal services).7. Technicians.8. Medical and/or Health Care.9. Environmental protection.10. Cultural, sports and recreation services.11. Academic research.12. Veterinarian.13. Manufacturing.14. Wholesale.15. Other job descriptions designated by the competent authorities along with the specific industry authorities.

  14. Mode 4 in practice-Current Flows of Foreign Natural Persons in Chinese Taipei • Statistical Analysis • Time Period: From 2004/01-2008/07 • Data: Bureau of the Employment and Vocational Training (BEVT) under the Council of Labor Affairs, Science Park Administration, Export Processing Zone Administration • Type of Work Permits: Foreign Professionals under the definition of the Employment Services Act (Article  46) • Specialized work • Director/Manager/Executive • Teacher at schools • Teacher for supplementary schooling • Sports coach and athlete • Religious and artistic work

  15. Indonesia Thailand The Philippines Vietnam Malaysia Mongolia

  16. Potential Implications and Main Concerns • Policy Debates • As a Host Country • As a Home Country

  17. Mode 3 v. Mode 4 Making the linking of modes 3 and 4 unnecessarily complicated. Intra-corporate Transferees executives, managers, and specialists? De-linking Making the negotiations easier for liberalizing mode 4 on its own

  18. De-Linking with Mode 3?Horizontal Approach v. Sectoral Approach -Can the services be delivered exclusively through mode 4? -Are the Services normally supplied by natural persons as an adjunct to a foreign investment due to the technology facilities and business models ?

  19. De-Linking with Mode 3?Horizontal Approach v. Sectoral Approach Any undertaking should therefore be made on the basis of individual sectors in order to yield the greatest possible Liberalization for mode 4.

  20. Toward Greater Mobility-- Regulatory Transparency of Mode 4 Trade Unpredictability • Terminologies • “Temporary”? • “Professionals”? Discretionary Power Trade Officials:How to access the degree of reciprocity? • Lack of Transparency • No explicit criteria • No clear definition Play it Safe

  21. The APEC Experience • APEC Individual Action Plan (IAP) • In Chapter 13 of the IAP “Mobility of Business People” • to enhance the mobility of business people who are engaged in the conduct of trade and investment activities in the Asia-Pacific region. • to enhance the use of information and communications technology (ICT) to facilitate the movement of people across borders. • to exchange information on regulatory regimes in regard to the mobility of business people in the region • to streamline short-term entry requirements for business people.

  22. The APEC Experience • To carry out those promises, Members update their relevant measures by the following format on an annual basis:

  23. Concluding Remarks • To the extent that labor policy authorities are being asked to respond to the inquiries for achieving further liberalization of mode 4, they have been cautious in their response, which is understandable. • It is important to be reminded of the fact that the mission of most labor authorities is to administer legislations, not to facilitate movement of foreign services suppliers, since their functions are largely defensive in nature. • The problems associated with mode 4 requires a new level of policy co-ordination between relevant regulatory agencies, particularly those responsible for trade, immigration and the labor market, in order to find workable solutions and to move forward with liberalization.

  24. Concluding Remarks • Labor and trade authorities should engage in an intensive and productive dialogue on the further liberalization of mode 4. • The legal framework of labor law, in most cases, although consistent with GATS in substance, is complicated and the language does not correspond exactly to the GATS horizontal commitments • For most Members, the interface between labor policy-making related to foreign interests is somehow weak. The most difficult part seems to be that the policy fails to determine who is best positioned to respond to these demands for liberalization. • The different groups in charge of trade, labor and migration policies in the capitals of the Members must increase their collaboration.

  25. Concluding Remarks • There is a need for predictability of actual entry conditions. The criteria for mode 4 entry must be more specific so as to assist and guide foreign services suppliers. • There are many vague terminologies and definitions used in the Schedule of Commitments that leave much room for administrative discretion. • Since much of the terminology can be interpreted differently by different Members, it becomes rather difficult if not impossible to assess the overall degree of liberality. • The existing GATS transparency rules are not adequate in terms of mode 4. Consideration should be given to developing specific disciplines for mode 4.

  26. Shin-yi PENGE-mail: sypeng@mx.nthu.edu.twWebsite:  http://sypeng.myweb.hinet.net SSRN Author page: http://ssrn.com/author=723329

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