ILS - DOLE

(Author Stephanie Tabladillo is Senior LEO of ILS; Introduction and Conclusion of the Paper are provided below; For the Full Text click the link below)

I. INTRODUCTION

Philippine Commitments in Trade Agreements

With the conclusion of the General Agreement on Trade in Services (GATS), a recognized framework for international rules and negotiations for temporary, short-term movement of individuals for work has been established. The Philippines, in January 1, 1995, acceded to the World Trade Organization (WTO), indicating its intention to be bound by the GATS objectives and principles.

The country‟s interest in trade in services is strengthened in several agreements following GATS. It has entered into regional agreements, namely, ASEAN Framework on Services (AFAS), ASEAN-Australia-New Zealand FTA (AANZFTA), ASEAN-Korea FTA (AKFTA), ASEAN-China FTA (ACFTA), ASEAN-India FTA, ASEAN-EU FTA, and bilateral agreement, the JapanPhilippines Economic Partnership Agreement (JPEPA).

In the GATS, the Philippine commitment under Mode 4, or the movement of natural persons, is to review the labor market test (LMT) within two years upon its accession to the WTO. The reason for this commitment stems from the fact that the LMT, also referred to as the economic needs test, is a barrier to mobility of people. Article XVI on Market Access of the GATS itself includes economic needs test among the market access barriers.

In the AFAS, the country is bound to remove substantially all restrictions on trade in services for all sectors, including priority sectors, by 2015. Again, for the Philippines, one of these restrictions is the LMT.

In all other agreements, the Philippine LMT is always a commitment under mode 4, along with other existing regulations which are Section 7(j) of the Professional Regulation Commission (PRC) Modernization Act of 2000, bringing in the principle of reciprocity, and Professional Regulatory Laws when it comes to practice of profession.

Policy Gap

Despite the fact that the Philippines remains as one of the demandeurs in labor mobility, as shown in its interest in entering into more and more services trade agreements, the country has been demonstrating a contrary position on labor mobility with its restrictive regime on the movement of persons in all sectors. The country‟s interest on labor mobility is understandable because of its large pool of young, competent and skilled professionals. Hence, it is only fitting that the Philippine commitment should complement with what it hopes to gain from co-ASEAN/WTO members and other trading partners.

The DOLE is the government agency tasked to lead the Philippine team in negotiating for mode 4 or movement of natural persons. Though the DOLE The Philippine Labor Market Test in a Global Working World 2 migration policy in terms of sending Filipinos in various, selected markets and as to what kind of Filipino talents could go out is definite and tailored to exhibit the country‟s development strategy on migration, there is lack of clear perspective on its policy of receiving foreign talents as part of the overall migration framework. 

In negotiating for mode 4, the request-and-offer approach is adapted. The Philippines can request from its trading partners a number of opportunities but it should also be ready to offer similarly good number of opportunities. The “request” concern is relatively uncomplicated for DOLE negotiators as the “sending” policy is straightforward, but the “offer” concern requires a clearer and proactive “receiving” policy or approach for effective Mode 4 negotiations. 

Objective of the Paper

The paper aims to contribute in shaping a consistent, forward-looking, and developmental approach or strategy in Mode 4 negotiations in trade in services that will aid DOLE Negotiating Team, by detailing practical steps in making effective the Philippine labor market test or the policy on the employment of foreign nationals in the country vis-à-vis in maximizing the country‟s gains in trade liberalization in services. It suggests certain changes in the existing procedure, and the enactment of a separate legislation governing the employment of these foreign nationals.

The paper starts by introducing the importance of services trade and labor mobility to the Philippines, evaluates the country‟s strategy and position in Mode 4 negotiations in the WTO, ASEAN and bilateral platforms, and argues on whether the country‟s present policy on the labor market test is still fitting and responsive in these times of increasing liberalization in trade in services, the emergence of a knowledge-based global economy where freer movement of people contributes to the economic and socio-cultural advancement of every country, and under the migration and development framework where migration has development effects to both countries of origin and destination, and the Philippines, taking the perspective of a laborreceiving country, can encourage the inflow of foreign nationals for knowledge and technology transfers. Options are presented in order to maximize the country‟s gains in entering into trade agreements, and a conclusion summarizing key issues follows, emphasizing practical steps in achieving these gains.  

LaborMarketTest.pdf