Volume 42 | Number 1 Fall 2006
Conflicts Between United States Immigration Law and the General Agreement on Trade in Services: Most-Favored-Nation Obligation
Page 3 of 5
« First
<
1
2
3
4
5
>
Last »
II. The General Agreement on Trade in Services
Turning from this general overview of United States immigration law, we now begin our inquiry into the GATS, the MFN obligation, and the effect on United States immigration law. The GATS applies to “measures . . . affecting trade in services”25 among the members of the WTO26 through one of the four “modes of supply.”27
A. Measures Covered by GATS
“Measures” are defined as any “act or omission”28 “by a Member, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form.”29
[T]he ordinary meaning of the term “affecting”, in Article I:1 of GATS, does not convey any notion of limiting the scope of the GATS to certain types of measures or to a certain regulatory domain. On the contrary, Article I:1 refers to measures in terms of their effect, which means they could be of any type or relate to any domain of regulation.30
In fact, “no measures are a priori excluded from the scope of application of the GATS.”31
B. Affecting Trade in Services
The measures must, however, have an effect on the conditions of competition.32 The definition of “affecting” is given “a broad scope of application,” based on the ordinary meaning of that word.33 “[T]he scope of the GATS encompasses any measure of a Member to the extent it affects the supply of a service regardless of whether such measure directly governs the supply of a service or whether it regulates other matters but nevertheless affects trade in services.”34 Additionally, the effect need only be minimal or even hypothetical, since the scope of the GATS is to “protect competitive opportunities, not actual trade flows.”35 Under the DSU, “an infringement of the obligations assumed under [GATS] . . . is considered prima facie to constitute a case of nullification or impairment . . . [such that] there is normally a presumption that a breach of the rules has an adverse impact.”36 Therefore, the complaining party need not even show harm to have standing, only a violation that has the potential for hypothetical harm.37
C. Services Covered by GATS
All services are covered except services “supplied in the exercise of governmental authority.”38 For the GATS, government services are only services “supplied neither on a commercial basis nor in competition with one or more service suppliers.”39
It is unclear to what degree the application for nonimmigrant admission must be for the provision of services in order to qualify for GATS coverage or if it may cover the mere incidental provision of services. Under United States law, the appropriate type of nonimmigrant category is that which is consistent with the principal purpose of the admission, even though admission may serve many functions.40 The GATS has no such similar statement. In addition, the GATS does not contemplate an entry that combines goods and services or an admission for which the purpose changes after entry from services to provision of goods or vice versa.41 The DSB has found that the same measure can be subjected to scrutiny under both the GATT and the GATS governing both goods and the service of supplying or distributing those goods, so presumably these purposes would be covered by the GATS even if services provision was a minor aspect of the overall admission.42
D. Modes of Supply
The trade must be through one of the four possible Modes of Supply.43 These modes encompass most, if not all, forms of international services supply; however, as a threshold inquiry, the form of trade must be identified. Mode One involves services supplied “from the territory of one Member into the territory of any other Member;”44 Mode Two involves services supplied “in the territory of one Member to the service consumer of any other Member;”45 Mode Three involves services supplied “by a service supplier of one Member, through commercial presence in the territory of any other Member;”46 and Mode Four involves services supplied “by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member” (for example, construction projects or consultancies).47 Mode Four is clearly the most applicable for this discussion of immigration law; however, Mode Three has also been suggested as potentially invoking immigration policy since a service provider may need to establish a local physical presence. For purposes of this Article, only Mode Four will be discussed.
The classification of services provision under Mode Four is not a simple matter. The Council on Trade in Services (Council),48 the WTO body charged with overseeing the operation of the GATS, stated that in order to qualify for Mode Four the natural person must be linked to a corporate commercial presence, excluding self-employment.49 Not only does this interpretation go beyond the narrow terms of the GATS, but it runs contrary to the parties’ understanding. As an example, when the United States and other nations became members of the WTO, one of the various types of nonimmigrant classifications presumed to be covered was the “business visitor” classification,50 which under United States immigration law, does not necessarily require a corporate presence.51 If the Council’s interpretation is correct, a number of commitments made by the United States under the GATS will escape coverage, contrary to the parties’ understanding.
In addition, it is not settled whether the employment must be with a foreign employer or if it may be with a United States employer (or a United States employer wholly-owned by a foreign employer). The benefits of the GATS must be extended to “natural persons of a Member in the territory of any other Member,”52 suggesting that United States employers cannot benefit from it, but this may not be the case.53 Looking at other GATS commitments, we see that the United States and other WTO nations presumed that the GATS would apply to United States nonimmigrant categories54 that specifically require a United States-incorporated employer.55 There is a presumption that provisions of the GATS are not in conflict,56 so one possible resolution may be that the only United States employers who would be covered would be those that were wholly-owned by foreign entities.
E. GATS Application to Immigration Law
Beginning with such an unsettled definition, one might wonder if immigration law was already exempted. In fact, the answer is clear; the GATS specifically covers visas and nonimmigrant policy.57 The Annex on Movement of Natural Persons Supplying Services Under the Agreement, an additional agreement integrated into the GATS, eliminates any doubt.58 The Annex only exempts from GATS coverage those “measures affecting natural persons seeking access to the employment market of a Member”59 as well as “measures regarding citizenship, residence or employment on a permanent basis.”60 In addition, WTO member nations have been very vocal in their desire to have temporary immigration regulations eased under the GATS, especially for the benefit of developing countries.61
Based on the Annex, the Council initially stated that “general immigration legislation (visa requirements, etc.)” are therefore “beyond the scope of the GATS.”62 However, this statement does not distinguish between permanent immigration and temporary immigration and the related visas. Both types of immigration include provisions of general application and both require visas. The language of the Annex clearly excludes permanent immigration from GATS coverage, but, by implication, temporary immigration must be covered. Despite some discussion,63 no specific period of stay has been defined as “temporary,”64 leaving the distinction somewhat unclear.
Notwithstanding the Council’s remarks, the DSB has already addressed the issue of applicability in the one DSB dispute involving United States immigration and visa policy.65 This dispute involved the United States’s refusal of visas to aliens who have trafficked in confiscated property in Cuba under the terms of the Cuban Liberty and Solidarity (LIBERTAD) Act of 1996 (Helms-Burton Act).66 The EU challenged the Helms-Burton Act at the DSB under the GATS.67 Although the United States initially stated that it would refuse to recognize any WTO ruling,68 it eventually reached an understanding with the EU outside of the DSB.69 This understanding called for the United States to waive the application of a different title of the Act70 and the EU agreed to encourage the transition to democracy in Cuba.71 The EU appears to be satisfied with the understanding. Although the immigration provisions were never reviewed by the DSB and remain in force, the DSB demonstrated that it will entertain disputes over immigration and visa issuance policies.
Despite this inconclusive dispute, the United States has already conceded GATS applicability. The United States included nonimmigrant categories, but not permanent categories, within its GATS commitments and exemptions. In fact, of the various nonimmigrant categories available under United States law, a number have been subjected to the GATS.72 Applicability, therefore, need not necessarily be argued, since the United States has deliberately committed certain nonimmigrant categories already.
F. Exceptions to GATS Coverage
In addition to specific exemptions for certain measures, the GATS also has significant general exceptions from coverage. Given the broad and ambitious scope of the GATS, the negotiating countries demanded general exemptions for measures that affect trade in services and potentially violate the agreement, but are nonetheless necessary.
1. Exceptions for Certain Persons
Although it may appear that only WTO member nationals may receive GATS treatment, this interpretation may not be correct. In order to dispute a measure, a WTO member must show that benefits accruing to it have been impaired. A member may deny the benefits of the GATS to a service supplier only if the member can establish that the supplier is not a supplier of a WTO member.73 This rule alone, however, may not serve to limit the GATS to nationals of WTO members, since under United States immigration law there are several parties involved in services supply.
Under the GATS, a service supplier is any natural or juridical person74 that supplies a service.75 A natural person is an individual who is either a national of a WTO member76 or has been granted the right of permanent residence in a WTO member,77 if that member does not grant status as a “national”78 or provides “substantially the same treatment to its permanent residents as it does to its nationals.”79 In addition, the individual must reside in the territory of a WTO member.80 A juridical person is “any legal entity duly constituted or otherwise organized under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association”81 that is either “organized under the law of that other Member, and is engaged in substantive business operations in the territory of that Member or any other Member”82 or “owned or controlled by . . . natural persons of that Member; or . . . juridical persons of that other Member.”83 Generally, under international law, a state may not espouse the claim of a national who merely owns or has an interest in the juridical person harmed, since it is the nation in which the juridical person is incorporated or has its principal place of business that makes that political choice.84 However, under the GATS, the DSB may assign the nationality of the juridical person based on the nationality of the individuals with ownership or control. A juridical person is “‘owned’ by persons of a Member if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Member.”85 A juridical person is “‘controlled’ by persons of a Member if such persons have the power to name a majority of its directors or otherwise to legally direct its actions.”86 Lastly, a juridical person is “‘affiliated’ with another person when it controls, or is controlled by, that other person; or when it and the other person are both controlled by the same person.”87
Whether the employer is a foreign entity or a United States entity should not matter. GATS treatment must be accorded regardless of whether the service is supplied directly by a natural or juridical person88 or through a commercial presence inside the WTO member’s territory.89 The United States has already committed nonimmigrant categories that require a United States-incorporated employer.90 Since many foreign service suppliers establish wholly-owned subsidiaries within the United States, the United States may be required to provide GATS treatment to a United States-incorporated entity when it is owned or controlled by a foreign entity with WTO member nationality.
The employer and employee should not both need to have WTO nationality. The benefits of the GATS accrue to WTO members, not to particular individuals or companies. Under the immigration laws of the United States and many other countries, there are several persons involved in a nonimmigrant admission: the employee, the employer, and, in some cases, the foreign owner(s) of the employer. If an employee is a national of a WTO member and an employer is a United States corporation which is wholly-owned by a corporation that is a national of a WTO member, then all demand GATS treatment and any impairment of the supply would impair the GATS benefits to the WTO member(s).
However, if the employee was not a national of a WTO member, but the foreign owner of the employer was, then the problem of disparate nationalities arises. On the one hand, if the employee did not receive GATS treatment, then the foreign owner’s ability to supply its service through the employee has been affected. On the other hand, extending GATS treatment to an employee who is not a WTO member national merely because the foreign owner has WTO member nationality essentially extends GATS treatment to any nationality, provided the individual was employed by the right employer. It is interesting to note that in the Helms-Burton Act dispute, the measure at issue was directed at the employees of corporations, although the complaining companies had WTO member nationality.91 We can reverse the hypothetical and consider an employee who was a national of a WTO member, but a foreign owner who was not, and again find the same arguments on either side.
Theoretically, the GATS might also cover cases where an employer, who was not a WTO member national, hired an employee, who was also not a WTO member national, but was a WTO member permanent resident. A natural person under GATS includes permanent residents of WTO members.92 This definition means that an employer would not be limited to citizens of WTO member nations, but also permanent residents; although in order to be covered, the individual must reside in the territory of a WTO member nation.93 Whether the employee might abandon his permanent residence in the WTO member nation by taking temporary employment in the United States, and thus lose the very basis for his qualification for the GATS, treatment is unclear.
2. Exceptions for Border Control Regulations
Despite applying to nonimmigrant policy and visas, the GATS specifically exempts “measures to regulate the entry of natural persons into, or their temporary stay in, its territory, including those measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across, its borders.”94 However, that language is not a blanket exemption of border control rules because the GATS only exempts them if “such measures are not applied in such a manner as to nullify or impair the benefits accruing to any Member under the terms of a specific commitment.”95 Therefore, even border control could be the subject of a GATS dispute if the United States was abusing its rights. Unfortunately, the GATS does not establish what standard would be used to determine if a measure was applied in a “manner” to nullify benefits. The strict GATS language could support the conclusion that unintentional effects alone might be considered impairment of benefits because they affect the conditions of competition.96
3. Exception for Labor Markets Integration Agreements
The GATS also exempts labor markets integration agreements and economic integration agreements.97 A labor markets integration agreement is the agreement of two or more countries to fully integrate their labor markets by exempting each other’s citizens from “requirements concerning residency and work permits.”98 This provision appears to be designed for the EU free movement of persons99 and similar labor markets unions since, in a footnote to the Article, the GATS states that “[t]ypically, such integration provides citizens of the parties concerned with a right of free entry to the employment markets of the parties and includes measures concerning conditions of pay, other conditions of employment and social benefits.”100
4. Exception for Economic Integration Agreements
Similarly, economic integration agreements are also exempted.101 Economic integration agreements are agreements to liberalize trade between two or more countries.102 An economic integration agreement will be exempted if the agreement “has substantial sectoral coverage, and . . . provides for the absence or elimination of substantially all discrimination . . . between or among the parties . . . through . . . elimination of existing discriminatory measures, and/or . . . prohibition of new or more discriminatory measures.”103 Whether an agreement has substantial sectoral coverage will be judged by the “number of sectors, volume of trade affected and modes of supply,”104 and an agreement will not qualify if it “provide[s] for the a priori exclusion of any mode of supply.”105 In addition, the agreement may not have the effect of raising the barriers to trade for any WTO members outside of the agreement.106 Discrimination will be judged against the standard in the GATS article on National Treatment,107 which requires that a relevant WTO member “accord to services and service suppliers . . . treatment no less favourable than that it accords to its own like services and service suppliers.”108 The treatment may be “either formally identical treatment or formally different”109 but will be considered “less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Member.”110 However, the agreement may provide for the elimination of discrimination on the basis of a reasonable time-frame111 and the DSB will consider the “wider process of economic integration or trade liberalization among the countries concerned.”112 The only exceptions to the rule of non-discrimination113 are for restrictions on “international transfers and payments”;114 “payments or transfers” undertaken “[i]n the event of serious . . . external financial difficulties”;115 and General and Security Exceptions discussed below.
Ever since the GATS came into force, there has been an on-going debate regarding the applicability of the GATS to regional Free Trade Agreements (FTAs) and their compatibility.116 By way of comparison, under the GATT, there is an exception from coverage for customs unions and FTAs.117 Clearly, the parties to the Uruguay Round knew how to write an obligation that specifically exempted FTAs but neglected to do so under the GATS. Since FTAs are specifically exempted under GATT, they are, by silent implication, specifically covered by the GATS. The WTO Committee on Regional Trade Agreements was founded shortly after the implementation of the North American Free Trade Agreement (NAFTA) to examine whether or not that agreement complied with the GATS. The Committee has yet to make a determination.118 In a surprising admission, the Congressional Research Service has, however, already determined that FTAs are facially inconsistent with GATS obligations, despite the fact that the FTAs themselves claim that they are exempt.119 Regardless of the Committee’s ability to reach an agreement, the DSB has already decided in favor of applying the GATS to FTAs.120 In Canada – Certain Measures Affecting the Automotive Industry, Canada defended its trade measures by claiming that they were part of NAFTA, and, since NAFTA was exempted from the GATS as an economic integration agreement, so were the trade measures.121 The DSB Panel found that the measures were not part of NAFTA, and, even if they were, the particular provisions did not qualify since they did not provide for the absence or elimination of substantially all discrimination.122 The Panel stated: “[T]he purpose of Article V is to allow for ambitious liberalization to take place at a regional level, while at the same time guarding against undermining the MFN obligation by engaging in minor preferential arrangements.”123 The Panel report was reversed on appeal to the DSB Appellate Body, but it was not reversed on the grounds stated above.124 Having reversed the Panel on other grounds, the Appellate Body did not rule on the question, so the finding of the Panel is potentially still correct. Therefore, the DSB may still find in the future that NAFTA is subject to the GATS and that some NAFTA measures are not exempted. Even if the DSB eventually finds that NAFTA is exempted, the DSB has shown a willingness to look below the surface of FTAs and similar agreements to determine if they truly qualify for the exemption rather than deferring to a nation’s self-judging assertions of compliance.
An additional question in the area of immigration is whether the economic integration exemption is an alternative to the more clearly applicable labor markets integration provision. The WTO has found that measures may be governed by GATS and GATT concurrently,125 and that measures may be also governed by two separate GATS provisions.126 On the other hand, in the context of Specific Commitments, the DSB has found that sectoral classifications are “mutually exclusive.”127 It is unclear whether these exemptions for economic and labor markets integration, being treaty reservations, are overlapping or mutually exclusive. If movement of persons provisions were intended to be alternatively exempted under the more liberal economic integration provision, then it should not have been necessary to create a labor markets exemption at all. Surely the WTO would not have separate exemption provisions with different requirements without the inherent requirement of mutual exclusivity. The purpose of having a separate, more rigorous, labor markets exemption would be superfluous if a labor market measure could qualify for exemption through an alternative. The parties to the Uruguay Round must have perceived that the movement of labor involves different issues that could not be grouped with other economic relations and thus the exemptions are mutually exclusive. Therefore, it is unlikely that a measure regarding labor markets and movement of persons could be alternatively exempted under the economic integration agreement exemption.
5. General Exemptions and Security Exemptions
There are also two broad provisions that exempt a number of matters from GATS consideration. These exemptions fall under two types: “General Exemptions” and “Security Exemptions.” Notwithstanding any rules in GATS to the contrary, the General Exemptions allow:
Measures . . . (a) necessary to protect public morals or to maintain public order; (b) necessary to protect human, animal or plant life or health; (c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those related to: the prevention of deceptive and fraudulent practices or to deal with the effects of a default on services contracts; the protection of the privacy of individuals [and]; . . . safety [and]; (d) [measures] . . . aimed at ensuring the equitable or effective imposition or collection of direct taxes . . . .128
In order to qualify, the measure must fall into one of the above-listed types of measures, not violate the conditions of the exemption,129 and be “necessary” to achieve that end.130 The DSB considers a measure “necessary” when it is “located significantly closer to the pole of ‘indispensable’ than to the opposite pole of simply ‘making a contribution to.’”131 The DSB will consider “whether a less WTO-inconsistent measure is ‘reasonably available.’”132 Additionally, the measure must not be “applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services.”133 Unfortunately, this provision fails to give guidance on the standard for assessing the manner of application.
The second broad class of exemptions is Security Exemptions. These exemptions also allow countries to resist GATS rules that would:
(a) require any Member to furnish any information, the disclosure of which it considers contrary to its essential security interests; or (b) to prevent any Member from taking any action which it considers necessary for the protection of its essential security interests . . . relating to . . . provisioning a military establishment; . . . fissionable and fusionable materials; . . . taken in time of war or other emergency in international relations; or (c) to prevent any Member from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.134
Although these are extraordinary situations, the GATS still establishes the same requirement of necessity as above135 and that “[t]he Council for Trade in Services . . . be informed to the fullest extent possible of measures taken under [the exemption] and of their termination.”136 It is unclear if a Member can claim an exemption if it failed to inform the Council and whether the Council can review a Member’s self-judgment of necessity.137
As mentioned previously, the immigration provisions of the Helms-Burton Act138 were disputed. The United States claimed that the Act was outside the WTO’s jurisdiction, and even if reviewable, the Act was justified under the Security Exemption.139 Since the EU withdrew the dispute, the DSB never determined if it could review a member state’s self-judgment of necessity. However, during the initial stages of the challenge, many nations and international organizations doubted that Cuba presented any real security threat to the United States140 and argued that the Act was contrary to international law.141 Since the United States agreed to negotiate under pressure, the United States may have thought that there was a risk that it might lose. Although not definitively establishing reviewability, this event shows that even immigration provisions that exclude aliens on national security grounds may be subject to review by the DSB, and that the standard of review might be based to some degree on world opinion of the defending member’s security assessment.
G. Obligation to Provide Most-Favored-Nation Treatment
Within the General Obligations of the GATS is the MFN obligation.142 Under MFN, all WTO member nations “shall accord immediately and unconditionally to services and service suppliers of any other Member treatment no less favourable than that it accords to like services and service suppliers of any other country.”143 This provision is an unconditional end to discrimination among WTO member nations and establishes a common denominator of trade policy without regard to nationality.144
Although some commentators have stated that immigration and visa policy would only be covered by Specific Commitments and not General Obligations such as MFN, this is without basis.145 First, there is nothing in the text of the GATS to support such an assertion since MFN does not distinguish between the two, whereas other obligations do.146 Second, the DSB has found that measures may be covered by one or more GATS or GATT provisions, so immigration provisions covered by Specific Commitments may still be covered by MFN.147 Third, in the Helms-Burton Act dispute, the EU specifically complained that the immigration measure conflicted with MFN, and this assertion was not contested by the United States.148 Lastly, the United States and several other countries took steps to list exemptions that insulate some of their immigration laws from MFN and would not have done so if MFN did not cover immigration laws.
1. Tests for Violations of MFN
One of the most significant aspects of MFN is that the standard for discrimination is both de jure and de facto.149 The DSB will examine either intentionally discriminatory regulations or regulations that have discriminatory effects, regardless of intent. This requires United States immigration law to satisfy a standard foreign to United States law. Failure to appreciate this standard is partly why many may not perceive the potential for conflicts between United States immigration law and MFN.
There are several tests for violations of MFN.150 De jure discrimination occurs when the nationality of the service provider is specifically noted as a criterion in qualifying for admission, regardless of the scope of applicability.151 De facto discrimination exists when a measure operates in such a way as to create a discriminatory effect against a particular nationality compared to other nationalities, again, regardless of intent.152 The three potential tests for de facto discrimination are the “diagonal” test, the “subcategory” test, and the “asymmetric impact” test.153 The diagonal test examines all service suppliers from WTO members to determine if any one nationality is receiving less favorable treatment.154 The subcategory test examines services supplied by type of service to determine if any one nationality within that subcategory receives less favorable treatment.155 The asymmetric impact test examines all service suppliers, comparing the proportion of service suppliers with each nationality receiving less favorable treatment, looking for disproportionate effect. This test is the one most commonly applied by the DSB, and is the only test that has been applied in an MFN dispute to date.156 It is also the test that appears to be favored by the Council when it notes “measures having a disproportionate impact.”157
2. Treatment of Inherent Competitive Disadvantages
WTO members must take the level of development of other nations into consideration in applying MFN.158 As a basis of comparison, let us consider the application of the Specific Commitment of National Treatment. National Treatment will not be discussed in detail in this Article because the United States has not consented to its application; however, the comparison is instructive.159 While MFN is the obligation to refrain from discriminating on the basis of nationality among foreign service suppliers, National Treatment is the obligation to refrain from discriminating between domestic and foreign service suppliers.160 The National Treatment obligation specifically states that the obligation “shall not be construed to require any Member to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.”161 Since this limitation is specifically listed under National Treatment but a similar limitation is not listed under MFN, the implication is that MFN is not similarly conditioned. While National Treatment excuses members from compensating for the foreign character of the services, the MFN obligation may require members to compensate for the different foreign characters of the services. Accordingly, WTO members may not claim that de facto discriminatory effects are the result of inherent competitive disadvantages.
3. Exclusion from MFN for Visas
In a footnote, the Annex on Movement of Persons states that “the sole fact of requiring a visa for natural persons of certain Members and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment.”162 By specifically exempting this type of discrimination from amounting to a per se violation of Specific Commitments, the Annex implies that it may be regarded as violating MFN.163 The Council appears to agree.164 This footnote may have been drafted based on the mistaken belief that immigration law was not covered by MFN. Although the language of GATS is to be read literally and the interpreter may not substitute different words, for the sake of argument, we will entertain the possibility that visas are somehow exempted from MFN.
i. Distinction Between Visa and Status
What is unclear about this footnote referring to “visas” is whether it intends to refer to the visa document stamped in a passport by an embassy or consulate as a prerequisite to travel to a country or whether it refers generally to admission in a particular non-immigrant status. Even seasoned immigration practitioners often informally say that a person is in the country “on a visa” when in fact that usage is not correct.165 A visa is merely evidence of the consular officer’s review of the alien’s qualifications and grant of permission to board transportation, travel to the country, and apply for admission in a particular status.166 This travel authorization usually takes the form of a stamp placed in a passport. It is this stamp only that is the “visa.” The inspecting officer at the port of entry always retains the right to refuse an applicant entry even if holding a valid visa.167 Provided the alien has applied for admission during the visa’s validity period and has been admitted, the alien receives nonimmigrant status for a set period of time and the visa becomes irrelevant since its sole purpose is over.168 Therefore, an alien is never in a country on a visa, but rather pursuant to a particular grant of nonimmigrant status.
One of the sources of the confusion may be the fact that some of the more common visas are issued with validity periods identical to the periods for which aliens will receive authorized stay. Upon admission, the expiration of status is often coterminous with the validity of the visa. However, this is not always the case and many visas are issued with validity either longer or shorter than the proposed stay.169 If the visa is valid longer than the stay, the alien will receive a certain term at admission and must exit before its expiration, not before the expiration of the visa. The person may return another day, still during the visa’s validity, to request another period of stay. On the other hand, if the visa’s validity is shorter than the proposed stay, then the alien merely has a shorter window of time during which admission must be requested; however, the period of stay will not be limited to the visa’s validity and may in fact extend beyond the visa expiration.170 If the alien decides to leave the country and return after the visa expiration, even if only for a brief trip, the alien must apply for and receive a new visa from the country’s foreign mission in order to receive renewed permission to apply for entry.171
ii. Definition of Visa
Based on the above, it is debatable how the DSB will define visa and how the definition will apply to United States immigration law. Language of the GATS must be given its “ordinary meaning . . . in [its] context and in the light of its object and purpose.”172 Initially, we observe that the word “visa” is used in the French version of the GATS173 and the word “visado” is used in the Spanish.174 As both of these terms are literal translations of visa this question of interpretation does not involve a word unique to English.175 Since there is no definition of visa in the GATS, we will examine dictionaries and general international custom to determine its ordinary meaning.
The DSB has found that it may use dictionaries to assist in determining the customary usage of a term.176 In Black’s Law Dictionary, a visa is defined as:
An official endorsement made out on a passport, denoting that it has been examined and that the bearer is permitted to proceed. A recognition by the country in which the holder of a passport desires to travel of that passport’s validity. U.S. v. Vargas, D.C. N.Y., 380 F.Supp. 1162, 1168. A visa is generally required for the admission of aliens into the United States. Cf. 8 U.S.C.A. §§ 1181, 1184. . . .177
The court in the cited case of United States v. Vargas found that a visa was defined in more detail as “an endorsement made on a passport by the proper authorities (as of the country the bearer wishes to enter) denoting that it has been examined and that the bearer is permitted to proceed.”178 In the more modern Webster’s New World College Dictionary, a visa is defined as “an endorsement on a passport, showing that a person has been granted official entry into or passage through a country.”179 Similarly, in the Concise Oxford English Dictionary, visa is defined as “an endorsement on a passport which indicates that the holder is allowed to enter, leave, or stay for a specified period of time in a country.”180 However, in this context, the etymology provided by the dictionary is also informative: “via Fr[ench] from L[atin] visa, past part[iciple] of videre ‘to see.’”181 This etymology suggests that the visa is a product of review, i.e., primarily an evidentiary concern. Although they do vary to some degree, in all of the dictionary definitions the relevant authority referred to the visa as being solely an endorsement placed in a passport as evidence of review. Two of the definitions referred to a grant of authorization to stay in a country, but the definitions still referred to the visa as merely evidence of the grant. This distinction is akin to that between citizenship and a passport, or the substantive right and evidence of the right.
As a multilateral agreement, the DSB will not necessarily judge the MFN obligation by reference only to United States usage; accordingly, we must also look to international usage. In the Glossary on Migration, the International Organization for Migration (IOM) provides proposed universal definitions of common terms used in discussing international migration to avoid just these types of misunderstandings.182 While acknowledging that “definitions in this field are often vague, controversial or contradictory,” and that “the usage of migration terms varies from country to country,” “care has been taken to provide the international definition where it exists; in other cases, a general definition is provided and mention made of alternative definitions.”183 The IOM defines visa as
[a]n endorsement by a consular officer in a passport or a certificate of identity that indicates that the officer, at the time of issuance, believes the holder to fall within a category of non-nationals who can be admitted under the State’s laws. A visa establishes the criteria of admission into a State.184
Since the IOM did not include alternative definitions for visa, the IOM must have found that the above definition is an international definition without commonly accepted alternatives. This definition supports the distinction between visa and status detailed above, specifically, that the visa is evidence that the alien appears to be eligible and allows the alien to request admission.
Furthermore, we can also look to the usage of individual nations, especially those nations who were parties to the Uruguay Round. Most nations use the term visa in a similar manner and employ the dichotomy of visa and status as described above,185 such as the requirement of many nations for aliens to have both a visa and a work permit. If a visa were the grant of authorized stay, then a separate work permit should not be necessary. Even for those nations that do not require separate visas and work permits, they still recognize the legal distinction.186 In fact, many of the nations that were parties to the Uruguay Round do not issue visas that are coterminous with the alien’s anticipated stay.187 Accordingly, those negotiating parties were even more acutely aware of the difference and presumably applied that understanding when negotiating the GATS. The fact that the GATS may have been actually negotiated by trade officers of a given country rather than immigration officers with a more refined understanding of the subtle language distinction is not relevant since the language is clear and the DSB will not investigate the subjective intent behind a clearly defined word.188
As it is widely acknowledged that a visa and authorized stay are fundamentally different concepts, we cannot merely substitute the word status for visa, as written in the Annex, and must read the word literally.189 Therefore, the footnote in the Annex must be read as “[t]he sole fact of requiring [documentary evidence of authorization to travel to the WTO Member nation] for natural persons of certain Members and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment.”190 Accordingly, only the exemption of some nationalities from the requirement of receiving a visa stamped in their passport before traveling to the country may be acceptable discrimination under MFN. Discriminatory measures that go beyond that documentary requirement, such as differing qualifications for nonimmigrant status, are subject to MFN.
iii. Visa Application Procedure and Adjudication
In addition, the process for applying for a visa is not entirely insulated from the GATS. Even if requiring a visa is acceptable discrimination, submitting an application is only the tip of the iceberg. There are requirements for place of application, burden of proof, procedures,191 and other requirements that go far beyond submitting ministerial paperwork.192 Note that the WTO members were free to state that different visa application treatment will not be a violation, but they did not. The Members only agreed that “the sole fact of requiring [documentary evidence] . . . shall not be regarded as [a violation].”193 Accordingly, treatment and processing of the visa application is also within the scope of the GATS.
Although this Article is not the forum for a detailed assessment of visa processing procedures, some aspects of the procedures that implicate visa qualifications are pertinent. A quick survey of the documentary requirements at United States posts shows that different nationalities are required to present different documents to evidence qualification.194 Sometimes, these documents are United States documents or their local equivalent, but in some cases, the documents are locally unique.195 In these cases, we must wonder why the post requires different documents for different nationalities to qualify for the same visa. Practitioners observe that consulates appear to routinely apply differing burdens of proof to nationals of different countries. Many of these standards are established by local posts based on experience with fraud. These practices are clearly discriminatory and might be considered “measures” since there are no a priori exclusions from the definition. These policies could not be justified under the security exception since any qualifying alien may be refused a visa on valid security grounds. Requiring a higher burden of proof is not necessary to establish a security barrier.
4. Exclusions from MFN for Country-Specific Scheduled MFN Exemptions
In negotiating the GATS, the member nations realized that MFN was not immediately feasible. They therefore allowed members a single opportunity to schedule country-specific exemptions for certain measures that would otherwise violate MFN.196 These exemptions would allow members to continue discriminatory measures past the entry into force of the GATS. Many of the exemptions are for specific historic trading partners or nations with whom bilateral trade agreements have been entered.197 If the member nation did not schedule the exemption at the entry into force of the GATS, then the nation is prohibited from doing so without the consent of the other WTO Members.198 As new nations join the WTO, they are likewise granted an initial opportunity to schedule and are barred from amending thereafter without consent. These exemptions are listed in the Annex on Article II Exemptions, which is considered an integral part of the GATS.199
The WTO member nations were not completely unrestrained in scheduling exemptions. The exemptions must meet the conditions of the Annex to be enforceable.200 The Annex includes the condition that exemptions should not, “[i]n principle,” exist for more than ten years after the entry into force of the GATS.201 This ten-year period was intended to be a transition period to full MFN treatment.202 In the Annex, members were required to enter the date on which the exemption would expire although many WTO members listed exemptions as “indefinite.”203
The consequences of maintaining a measure beyond the ten-year limit are unclear. The limit has never been the subject of a DSB dispute, although the DSB has found that other similar expressions of intent are relevant when a member fails to pursue the goal in good faith.204 This obligation is in addition to the general principle of pacta sunt servanda in customary international law.205 The ten-year anniversary from the date of entry into force of GATS for the United States was January 1, 2005, at which point the United States MFN exemptions should have, in principle, expired.
Although the ten-year expiration is couched in terms of aspiration, the United States should not interpret this language to mean that exemptions will be tolerated long-term. The WTO has consistently reaffirmed that the exemptions are temporary206 and one of the expressed goals of the Doha Round is the elimination of exemptions.207 In fact, the Council has already issued Procedures for the Certification of Terminations, Reductions and Rectifications of Article II (MFN) Exemptions.208 In addition, the United States should not discount the fact that many nations have been vocal in their complaints that discrimination is still being practiced.209 Some members, such as Japan,210 did not list any MFN exemptions at the outset and are increasingly critical of nations that did. Many WTO member states are adamant that the ten-year period was merely a transition211 and have already begun to propose the commencement of the phase-out process and transition.212 Lastly, an exemption would need to be claimed as a defense at the DSB if a measure was challenged. The DSB might decline to recognize a more than ten-year old exemption as a valid defense. Member states have expressed a preference for negotiation on the elimination of exemptions rather than dispute resolution, so exemptions may be tolerated for some time.213 However, any MFN provision maintained beyond the ten-year mark is vulnerable.
In addition, WTO member nations must also justify their exemptions. Exemptions that expired more than five years in the future were reviewed by the Council to determine “whether the conditions which created the need for the exemption still prevail; and . . . determine the date of any further review.”214 The initial five-year review was admittedly ineffective but this does not mean that the Council has abandoned its right to review the exemptions for continued justification.215 If an exemption was disputed, the DSB could find that the exemption did not expire but is no longer justified. In addition, the exemptions are still subject to subsequent negotiations regardless of the outcome of the Council’s review or a DSB dispute.216
Lastly, there is some discussion whether such an exemption for a bilateral trade agreement must be recognized if both parties to the agreement did not take reciprocal exemptions. The Council has noted that “[p]references granted are not frequently mirrored by similar exemptions on the part of beneficiary countries.”217 The Agreement Establishing the WTO states that deviations from the agreements are not generally allowed, but where they are, they are considered treaty reservations.218 As has been noted above, the GATS is interpreted according to customary international law, including the Vienna Treaty Convention.219 Under the Convention, treaty reservations are not honored against a state which, at the time of entry into force, maintained an objection to the reservation.220 Some WTO members still maintain that these exemptions must be reciprocal or they are not recognized.221 How the Convention’s rule would apply in this multilateral context is unclear, but it is possible that parties have not taken their exemptions effectively so they are void ab initio either against the particular nation or the WTO generally.
5. Country-Specific MFN Exemption Scheduled by the United States
In its list of exemptions, the United States included nonimmigrant aspects of bilateral treaties for trade and investment.222 This exemption allows for:
Government issuance of treaty trader or treaty investor non-immigrant visas that extend a special visa category to nationals of treaty partners in executive and other personnel categories engaged solely to carry on substantial trade, including trade in services or trade in technology, principally between the US and the foreign state of which a natural person is a national, or solely to develop and direct the operations of an enterprise in which a natural person has invested or is actively in the process of investing a substantial amount of capital.223
This exemption applies to nationals from “[c]ountries with whom the United States has a Friendship, Commerce and Navigation Treaty (FCN), a Bilateral Investment Treaty (BIT), or certain countries as described in Section 204 of the Immigration Act of 1990.”224 The United States currently accords seventy-eight nations preferred nonimmigrant treatment under these agreements225 and continues to engage in negotiations for additional agreements that might fall under this exemption, even after the implementation of the GATS.226 The exemption is justified by the need “[t]o facilitate trade under FCNs and BITs” and as with most of the exemptions, it is listed as indefinite.227 Nonetheless, this exemption was theoretically slated for elimination on January 1, 2005, the ten-year anniversary of the entry into force of the GATS.
It is interesting to note that most countries that have an FCN or BIT with the United States have not entered a reciprocal exemption.228 Of the sixty-seven nations with whom the United States has concluded a treaty and who are also members of the WTO, only Brunei,229 Costa Rica,230 Estonia,231 Jordan,232 the Philippines,233 and Trinidad and Tobago234 have entered exemptions that are arguably reciprocal. Some of the most frequent users of the treaties have not entered reciprocal exemptions, notably Japan235 and the United Kingdom.236
Furthermore, the failure of the United States to have a fixed list of exempted agreements is also criticized. Certain countries, as described in the Immigration Act of 1990, are covered, but this is not a fixed list.237 The Act grants treatment equivalent to a treaty for countries that qualify under prescribed statutory requirements.238 Currently, Australia and Sweden have been designated by administrative determination as qualifying.239 This exemption is, therefore, neither transparent nor reliable since others must refer to national legislation to clarify the exemption240 and even then, the countries involved are not clearly identified.241 Moreover, additional countries may in the future receive the exempted treatment if they qualify.