The Case for Treating Migration as Trade

by Amien Kacou on November 15, 2013

One rock at a time

In October 2013, the General Assembly of the United Nations convened a High-level Dialogue on International Migration and Development, which concluded with a unanimous declaration calling for the respect of migrant rights. Unsurprisingly, the declaration did not call for the liberalization of migration, consistent with a tradition of political resistance to that goal, in spite of a relative consensus among economists that liberalizing global migration would enormously benefit global economic production.

The founding principles of the modern global political economy include the free movement of capital, technology, goods, and services, but omit the free movement of labor. Barriers on labor migration have traditionally been regarded as a prerogative of nation states unlike similar protectionist measures in other areas of international trade. This is the case for a range of reasons, including anxieties over the dilution of sovereignty, citizenship, cultural identities, human resources, and welfare states.

However, recent research suggests that the potential economic advantages of liberalizing global migration might be great enough to justify significant changes. It has been estimated that the removal of migration barriers would roughly double global GDP. The creation of a comprehensive, binding multilateral framework for labor migration would provide the best tool for fostering, securing, regulating and enhancing those advantages.

Unfortunately, strong consensus over these estimates has been overshadowed by concerns regarding how those gains would be distributed. In particular, less developed countries fear that the removal of migration barriers would accelerate their “brain drain,” or the departure of their highly skilled workers. For example, according to one source, only 27,000 out of 71,740 nationally registered Nigerian medical doctors actually practice in Nigeria—a country that shoulders ten percent of the global disease burden.

Meanwhile, more developed countries fear that the removal of migration barriers would decrease wages and increase their public burden, due to the arrival of poor people and low-skilled workers. Yet, the debate over wage deflation often ignores how low-skilled immigrants could benefit more developed countries by providing a more competitive alternative to outsourcing. This alternative—substituting the importation of foreign workers to reach capital for the exportation of capital to reach foreign workers—could allow developed countries to preserve more control over labor conditions while recycling foreign worker wages into their domestic economy, as migrants patronize local businesses.

Governments would be able to address concerns over the distribution of gains from liberalization by imposing narrowly targeted regulations and redistribution policies. Less developed countries could encourage the investments or the return of their highly skilled emigrants (with the added benefit of “brain gain” from their newly-enhanced skills) through fiscal incentives in the form of special income taxes. Likewise, more developed countries could continue to limit most immigrants’ access to public benefits, which encourages low-skilled immigrants to return home where their savings carry greater purchasing power once their employment opportunities dry out.

A new, binding multilateral regime would not only increase every government’s capacity for enforcing labor migration regulations but also help enhance the gains from liberalization. Currently, the World Trade Organization’s General Agreement on Trade in Services (GATS) provides a binding global framework for liberalizing the temporary movement of service providers. However, besides covering only a few narrow categories of persons, it has attracted very few commitments, while leaving too much discretion to national governments in interpreting those commitments. Meanwhile, the International Labour Organization’s non-binding Multilateral Framework on Labour Migration is too broad and does not propose any specific programs, standards, or targets for lifting barriers on labor migration.

The international community should expand on the framework provided by GATS, while incorporating past efforts to liberalize the movement of goods by setting targets for the “tarification” of labor migration barriers. Additionally, there should be stronger cooperation on ancillary issues such as migrant data collection, migration cost management, recognition of worker qualifications, the exchange of labor market information, and the protection of worker rights.

Improvements in cooperation on migrant worker rights could assuage fears that framing migration in terms of trade could somehow hinder worker rights by likening workers to commodities. A stronger multilateral regime could encourage the promotion, and even facilitate the implementation, of relevant international conventions. At the same time, it would need to tolerate relevant country-specific social environments to account for unique geographic, demographic, cultural, security, and other political realities. For example, limitations on the GATS principle of “national treatment” would continue to be accommodated for a variety of national public benefits systems.

Countless concerns might well remain over the desirability of any liberal international labor migration system. However, the dearth of serious public debate on the topic makes it difficult to give them a fair hearing. In the meantime, “globalization’s last frontier” remains—perhaps to become one of the last great vestiges of the rule of political prejudice over economic fact.

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