Publication: Foreign Professionals in the United States : Regulatory Impediments to Trade
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Published
2009
ISSN
13693034
Date
2012-03-30
Author(s)
Mishra, Deepak
Editor(s)
Abstract
Changes in demographics and patterns of investment in human capital are creating increased scope for international trade in professional services. India, one of the largest exporters of skilled services, and the United States, one of the largest importers of skilled services, are two countries that mirror these broader global trends. The scope for mutually beneficial trade is today inhibited not only by quotas and discriminatory taxation, but also by a number of domestic regulatory requirements--including qualification and licensing requirements. To illustrate the nature and implications of these regulatory impediments, this article focuses on the regulatory requirements that Indian professionals face in the US market. It explores the consequences of regulatory discrimination and the economic cost of regulations, and presents some illustrative estimates. The article concludes by examining how the trade-inhibiting impact of regulatory requirements could be addressed through bilateral and multilateral negotiations.
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Publication Foreign Professionals and Domestic Regulation(World Bank, Washington, DC, 2008-11)Changes in demographics and patterns of investment in human capital are creating increased scope for international trade in professional services. The scope for mutually beneficial trade is, however, inhibited not only by quotas and discriminatory taxation, but also by domestic regulation - including a range of qualification and licensing requirements and procedures. To illustrate the nature and implications of these regulatory impediments, this paper presents a detailed description of the regulatory requirements faced in the United States market by four types of Indian professionals: doctors, engineers, architects, and accountants. India is one of the largest exporters of skilled services, and the United States is one of the largest importers of skilled services, so these two countries reflect broader global trends. 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Such mechanisms could identify reform priorities and opportunities for utilization of "aid for trade" resources, thereby putting in place the preconditions for future market opening. The second proposal is for a new approach to negotiations in the World Trade Organization, with a critical mass of countries that account for the bulk of services production agreeing to lock-in applied levels of protection and pre-committing to reform of policies affecting foreign direct investment and international movement for individual service providers -- two areas where current policy is most restrictive and potential benefits from liberalization are greatest. If these proposals cannot be fully implemented in the Doha time frame, then any Doha agreement could at least lay the basis for a forward-looking program of international cooperation along the proposed lines.Publication Reform and Regional Integration of Professional Services in East Africa(World Bank, Washington, DC, 2010-09)Professional services matter for development in East Africa. Business services, including professional services, are among the most dynamic services sectors; and are a key input for other sectors. Greater use of professional services by East African firms is associated with higher labor productivity. But there is a large gap between the potential contribution these services could make and the meager contribution they make today. National markets for professionals and professional services in East Africa remain underdeveloped, whereas regional markets are fragmented by restrictive policies and regulatory heterogeneity. An effective reform agenda will require policy action in four areas: education, regulation of professional services, trade policy, and labor mobility at both the national and international levels.Publication Criss-Crossing Migration(World Bank, Washington, DC, 2013-07)The current perspective on the flow of people is almost exclusively focused on permanent migration from poorer to richer countries and on immigration policies in industrial countries. But international mobility of people should no longer be seen as a one-time event or one-way flow from South to North. The economic crisis has accentuated the longer-term shift in location incentives for people in industrial countries. As consumers, they could obtain better and cheaper access to key services -- such as care for the elderly, health, and education -- whose costs at home are projected to increase in the future, threatening standards of living. As workers, they could benefit from new opportunities created by the shift in economic dynamism from industrial to emerging countries. But subtle incentives to stay at home, such as lack of portability of health insurance and non-recognition of qualifications obtained abroad, inhibit North-South mobility and need to be addressed. Furthermore, if beneficiaries of movement abroad exert countervailing power against those who support immigration barriers at home, then that could lead to greater inflows of people, boosting innovation and growth in the North. Eventually, growing two-way flows of people could create the possibility of a grand bargain to reduce impediments to the movement of people at every stage in all countries and help realize the full benefits of globalization.
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