Trade Agreement Migrant Workers

The 2017 bilateral agreement between the EU and Canada, known as CETA, also has immigration rules for some people – and has become a benchmark in the Brexit debate. One relationship is indisputable: migration always has a positive effect on trade flows, especially in the host country. A second is more ambivalent: it is assumed that international trade reduces the causes of migration in the long term by contributing to economic growth and thus sustainable development. This does not mean that trade and growth necessarily and automatically reduce migration. Studies on the “migration bump” show that growth in poor countries first stimulates migration, a reduction occurring only after exceeding the minimum income threshold. Moreover, trade liberalization only leads to economic growth under certain conditions. Whether trade liberalization promotes or discourages migration therefore depends largely on the concrete details of trade policy and free trade agreements: are they adapted to the level of development and the economic structure of the country? Is it rapidly increasing exports and limiting negative structural changes? What is their impact on internal distribution issues? Do they help strengthen long-term social and environmental standards? Are there any accompanying reforms in other policy areas? While it is not certain that the expansion of trade promotes or discourages migration, it is undeniable that migration deepens trade relations between the countries concerned.30 Empirical studies show that migration further stimulates exports from the host country, where migrants are highly skilled and where countries of origin and destination are very different linguistically and/or culturally. Migrants from countries where a very rare language is spoken or where corruption, legal insecurity and weak institutions are predominant can make a significant contribution to the host country by improving understanding of the functioning of their country of origin and strengthening links with their complex national markets. From an economic point of view, this facilitates the removal of informal trade barriers and thus reduces trade costs.31 Migrants, for example, are able to access and provide information on customers and purchasing opportunities. Trade and productivity in the host country can thus benefit from their cultural and technological capabilities. A quantification of this phenomenon for OECD countries revealed: A 1% increase in migration is equivalent to a 3.7% reduction in import tariffs, compared to 21.7% for highly skilled migrant workers and highly differentiated products.32 UNCTAD has studied the same migration phenomenon in Africa and has achieved a positive result33. The effect is high, as has been indicated, as migrant workers are skilled. And highly skilled workers are particularly mobile.

Are stakeholders/importers in Europe and producers in the partner country properly informed of the terms of the agreement? This freedom of movement of persons for the purpose of service delivery covers two main categories: key workers who are transferred within the company, including managers and technical staff; and business travellers or independent foreign professionals in selected sectors. However, the vast majority of fashion 4 movements remain limited to short-term visits and do not allow for professional activity in the host country. It is also significant that, according to WTO statistics, trade in “Mode 4” services accounted for only about 1 to 2% of total trade in 2005.

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