1 of 26 Lecture 8 SERVICES AND LABOR Topics covered: The General Agreement on Trade in Services Regional Intergovernmental Regulations on Trade in in Services The International Labor Organization Regional Rules Governing the Movement of Workers National Rules Governing the Movement of Workers

2 of 26 A.THE GENERAL AGREEMENT ON TRADE IN SERVICES 1.Scope and Goal of the General Agreement on Trade in Services (GATS): a.Scope: applies to all trade in services in any sector except those supplied in the exercise of governmental functions. b.Goal: the progressive opening up of service sectors to foreign competition.

3 of 26 A.THE GENERAL AGREEMENT ON TRADE IN SERVICES 2.General Obligations and Disciplines: a.GATS principles (analogous to GATTS principles) that are applicable to WTO member states: 1)Nondiscrimination. a)Most-favored-nation rule. i.Caveat: Member states may list country-by-country exemptions from the MFN rule. a] Applications for exemptions are considered using the ordinary WTO waiver procedures. b] MFN exemptions can last no longer than ten years and are to be subject to periodic review and to negotiation in future trade liberalization rounds.

4 of 26 A.THE GENERAL AGREEMENT ON TRADE IN SERVICES 2.General Obligations and Disciplines: (cont.) a.GATS principles (cont.) 1)Nondiscrimination. (cont.) b)National treatment rule. i.Caveat: Applies only to specific sectors a member state opens to market access. 2)Transparency. 3)Simplification.

5 of 26 A.THE GENERAL AGREEMENT ON TRADE IN SERVICES 2.General Obligations and Disciplines: (cont.) b.Exceptions (analogous to GATT's exceptions): 1)General Exceptions. 2)Security Exceptions. 3.Specific Commitments. a.Member states submit Schedules of Specific Commitments for annexation to the GATS that list the sectors (or subsectors) they are opening to market access. 1)Members states may list limitations that apply to these sectors.

6 of 26 B. REGIONAL INTERGOVERNMENTAL REGULATIONS ON TRADE IN SERVICES 1.European Union Trade in Services Law. a.The Right of Establishment and the Freedom to Provide Services. 1)EU's European Community Treaty Rights: a)Article 52: The self-employed have the right to set up and carry on a business. b)Article 56: The self-employed have the right to provide services on a permanent or temporary basis.

JUDGE JUDY READY TO RULE-- Case: Jay v. Staatssecretaris van Justitie: +Court+Facts+Legal Significance +Parties+Rational +Issue+Result

8 of 26 B. REGIONAL INTERGOVERNMENTAL REGULATIONS ON TRADE IN SERVICES 1.European Union Trade in Services Law. (cont.) a.The Right of Establishment (cont.) 2)Court Interpretations. a)The two articles should be read together as granting a general right of self-employed persons to pursue activities throughout the Union. i.Persons who are not setting up a business or providing services are still covered.

9 of 26 B. REGIONAL INTERGOVERNMENTAL REGULATIONS ON TRADE IN SERVICES 1.European Union Trade in Services Law. (cont.) a.The Right of Establishment (cont.) 3)Limitations on the right of freedom to provide services and the freedom of establishment. a)Limitations on entry into a member state. i.Entry into a member state can be denied on grounds of: a] Public policy. b] Public security. c] Public health. b)Limitations on public service contracts. i.Nationals of other member states may be excluded from public service contracts.

10 of 26 B. REGIONAL INTERGOVERNMENTAL REGULATIONS ON TRADE IN SERVICES 2.North American Free Trade Agreement (NAFTA) Trade in Services Provisions. a.Most NAFTA trade in services provisions are analogous to those in the GATS. 1)Exception: Parties list service sectors they are closing to foreign competition.

11 of 26 C. THE INTERNATIONAL LABOR ORGANIZATION 1.Primary Goals of the ILO: The improvement of working conditions, living standards, and the fair and equitable treatment of workers in all countries. a.Workers represented include both blue and white collar employees.

12 of 26 C. THE INTERNATIONAL LABOR ORGANIZATION 2.ILO's Role in Creating International Labor Standards. a.Two instruments are used to create international labor standards. 1)ILO Conventions - sponsored by the ILO. 2)ILO Labor Recommendations - issued by the International Labor Office.

13 of 26 C. THE INTERNATIONAL LABOR ORGANIZATION 3.ILO's Administrative Tribunal a.Hears complaints from employees in the secretariats of the ILO and other inter- governmental organizations that have recognized the competence of the Tribunal. 1)UN Administrative Tribunal has a similar responsibility for other IGOs. b.Complaints must relate to either: 1)The "non-observance, in substance or in form, of the terms of appointment of officials"; or 2)To violations of the staff regulations of the ILO or other IGO.

14 of 26 C. THE INTERNATIONAL LABOR ORGANIZATION 3.ILO's Administrative Tribunal (cont.) c.Judgments of the Tribunal are: 1)Limited to rescinding the decision impugned or requiring the performance of the obligation relied upon. 2)"Final and without appeal." a)Exception: The following can be appealed to the International Court of Justice: i.Challenges to the court's jurisdiction. ii.Claims of a "fundamental fault in the procedure followed."

JUDGE JUDY READY TO RULE-- Case: Doe v. Unocal Corp.: +Court+Facts+Legal Significance +Parties+Rational +Issue+Result

16 of 26 D. REGIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 1.Regional Organizations that Oversee the Rights of Works include: a.Council of Europe b.European Union

17 of 26 D. REGIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 2.European Union Worker Rights Law. a.EC Treaty provides for Freedom of Movement of Workers. 1)Art. 48: Workers in any occupation may accept offers of employment and remain in any member state to carry out that employment. 2)Art. 49: The EU Council has the power to remove and harmonize administrative procedures that obstruct the free movement of workers, and to set up the machinery necessary to match up job hunters in one state with job offers in another.

18 of 26 D. REGIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 2.European Union Worker Rights Law. (cont.) a.EC Treaty provides for Freedom of Movement of Workers. (cont.) 3)Art. 51: The EU Council has the power to "adopt such measures in the field of social security as are necessary to provide freedom of movement for workers."

19 of 26 D. REGIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 2.European Union Worker Rights Law. (cont.) b.Limitations on the right of freedom of movement for workers. 1)Limitations on entry into a member state (same as for the self-employed). 2)Limitations on employment in the public service. a)Foreign nationals may be excluded from jobs related to the activity of governing.

20 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 1.The Right to Leave and Return to a Country. a.The Universal Declaration of Human Rights: Everyone has the right to leave any country, including his own, and to return to his country. 1)Caveat: This is not the generally accepted rule of international law. b.Many countries require that their citizens have a passport and permission from the government before traveling abroad. 1)Rationale: To protect national security.

21 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 2.The Right of Aliens to Enter a Country may be Denied by the Host Country a.Common requirement: visa. 1)Issuance is discretionary. 2)Persons are required to comply with the local immigration laws even if they are unaware of them.

22 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 2.The Right of Aliens to Enter a Country may be Denied by the Host Country (cont.) a.Common requirement: visa. (cont.) 3)Persons who do not comply with the limitations imposed on their visas may be imprisoned and/or expelled. a)Note: The issuance, denial, or revocation of a visa is a matter of executive discretion and is not judicially contestable.

23 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 2.The Right of Aliens to Enter a Country may be Denied by the Host Country (cont.) a.Common requirement: visa. (cont.) 4)The right of persons to travel within a country may be restricted. a)Aliens are commonly limited to certain areas of a country. b)Citizens of communist countries had to obtain internal passports and visas.

JUDGE JUDY READY TO RULE-- Case: George v. International Air Service Co. Ltd.: +Court+Facts+Legal Significance +Parties+Rational +Issue+Result

25 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 3.Regulations Governing Foreign Workers a.States regulate the activities of aliens in their territory. 1)Aliens who enter a country to work must obtain an appropriate entry visa (i.e., one that allows them to be gainfully employed). 2)Aliens must comply with a host state's employment laws.

26 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 3.Regulations Governing Foreign Workers b.Many states apply the principle of national treatment to alien workers: Foreign workers are governed by the same labor laws that apply domestically. 1)This may be so even when a foreign worker and a foreign employer agree to abide by the labor laws of their home state

27 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 3.Regulations Governing Foreign Workers c.Some states impose special rules on foreign workers. 1)Some use percentile legislation: This requires that a certain percentage of the local work force be made up of nationals. 2)Others limit the government benefits that foreign employees can receive.

JUDGE JUDY READY TO RULE-- Case: Spiess et. al. v. C. Itoh& Co. (America) Inc.: +Court+Facts+Legal Significance +Parties+Rational +Issue+Result

29 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 3.Regulations Governing Foreign Workers d.Bilateral treaties commonly establish rules governing the employment of aliens. 1)Treaties of Friendship, Commerce and Navigation: Establish a reciprocal right for alien businesses to employ certain categories of workers in each country.

30 of 26 E. NATIONAL RULES GOVERNING THE MOVEMENT OF WORKERS 4.The Extraterritorial Application of Home State Labor Laws a.Most countries do not apply their labor laws extraterritori ally. 1)Exception: the United States.

JUDGE JUDY READY TO RULE-- Case: Morelli v. Cedel: +Court+Facts+Legal Significance +Parties+Rational +Issue+Result

Acceleration Clause