Abstract
AbstractThis article discusses options to facilitate movement of workers between high‐income and developing countries within the framework of trade agreements, focusing on the European Union's partnership agreements with neighbouring countries. Existing frameworks for co‐operation offer the possibility of expanding temporary rather than longer‐term or permanent movement of workers since extant trade agreements provide scope for negotiating specific market access commitments for services, including those delivered through the cross‐border movement of natural persons. Even though the potential for such ‘embodied’ trade in services will not be anywhere near what would be associated with substantial liberalization of migration regimes, furthering the services trade dimension in the European Union's trade agreements offers significant potential Pareto gains. For the partner countries these gains from temporary movement of service providers are both direct – through greater employment and revenue from providing services in the European Union – and indirect – by helping to increase and sustain higher growth at home.
Highlights
The expansion of the European Union (EU) since 2004 has redefined the European “neighborhood” to span a diverse group of countries in Eastern Europe, the Middle East, the Mediterranean and Central Asia
The Economic Partnership Agreement (EPA) and the agreement with Chile illustrate both the potential that exists for exploiting trade agreements to facilitate movement of services providers and the challenges confronting EU neighboring countries in negotiating meaningful access to the EU market. These agreements show that progress on mode 4 can be made, but that for this to be meaningful it is important to minimize the restrictions and uncertainty that is implied by EU member states maintaining economic needs tests and limiting liberalization to high-skill activities
The economic rationales are compelling from the perspective of source countries, given lower brain drain losses and the temporary nature of the demographic bulge of young workers that are entering the labor market
Summary
The expansion of the European Union (EU) since 2004 has redefined the European “neighborhood” to span a diverse group of countries in Eastern Europe, the Middle East, the Mediterranean and Central Asia. These trends will create pressures for labor flows into the EU countries, even if high domestic employment growth rates are sustained in Mediterranean countries These diverging labor market dynamics provide an opportunity for both the EU and partners to complement their economic and institutional integration efforts with a strategy to enhance South-North migration. Even though the potential for such “embodied” trade in services will not be nearly large enough to address the demographic challenges facing either side, furthering the services trade dimension in EMP context offers significant potential Pareto gains These gains are both direct – through greater employment in/revenue from providing services in the EU – and indirect by helping to increase and sustain higher growth in the partner countries. The size of the 15-64 age group will increase from 250 million to 450 million while the 60+ age group will grow from 26 to 128 million
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