Volume 42 | Number 1 Fall 2006
Conflicts Between United States Immigration Law and the General Agreement on Trade in Services: Most-Favored-Nation Obligation
IV. Conclusion
The United States is currently violating the MFN obligation of GATS and may violate it further in the future. Although the members of the WTO may be tolerating measures that pre-dated the implementation of GATS, the United States has negotiated treaties such as the Chile and Singapore FTAs and passed legislation such as the E-3 that post-date the GATS and violate the agreement on its face. These treaties and legislation could be construed as bad faith acts in implementing the GATS.
If these measures are violations, then the obvious question is why the other members of the WTO have not disputed them yet. The answer may lie in politics. The WTO is keenly aware that it is being criticized for overreaching its mandate, even if wrongly so, and may be inclined to discourage politically sensitive disputes. Even if a measure is a per se violation of MFN, lodging a dispute is still within the political judgment of the members, who may always decline. The members must balance the potential gain in immigration liberalization against the potential loss if trade sanctions have to be imposed. The GATS and other WTO agreements are still the subject of ongoing negotiations at the Doha Round, and members may be reluctant to commence disputes in order to preserve their leverage in negotiations and not jeopardize future concessions. There may in fact be a closed door agreement on just this issue for the promise of other benefits. In addition, faced with recent losses at the DSB, the United States still considers withdrawal from the WTO as a serious alternative432 and members may lose even more by pushing the United States too far. These countries could also be mindful of their own MFN violations and be hesitant to bring the United States’ violations into the light of DSB scrutiny. The fact that the other members of the WTO have not disputed the United States’ immigration laws does not mean that the measures do not violate MFN, only that they have not been challenged for any number of reasons.
However, there are signs that the above political decisions are beginning to show cracks. Although the EU quickly withdrew its dispute over the Helms-Burton Act, other countries are now openly discussing filing disputes over aspects of United States immigration policy. India is pressing the United States over the restrictions on H-1Bs,433 and Canada is considering a dispute over immigration provisions affecting healthcare workers.434 Also important is the recent report by the WTO regarding its institutional changes that has strongly criticized the growth of non-MFN trade agreements of just the sort the United States entered with Chile and Singapore.435 In addition, India is pressing for a general “GATS visa,”436 and some countries such as Canada437 and the United Kingdom438 have already introduced special GATS nonimmigrant categories. A further aggravating situation is that each year’s limited annual allotment of H-1Bs seems to be more quickly exhausted than the previous year’s, requiring companies who miss the cut-off to be more aggressive and creative in pursuing alternate nonimmigrant categories, such as the L and the others described in this Article. If the United States Government begins to limit those other categories, as has been suggested,439 a serious confrontation may arise.
The next question is whether the United States has a moral obligation under pacta sunt servanda to comply with MFN. Under this general principle of international law, the United States must make a good faith attempt to bring its measures into MFN conformity. The example of the expiration of the MFN exemption is a case in point. As there was a specific expression of intent, pursuing additional agreements and claiming they fall under an expanded definition of the exemption could amount to abuse of the exemption.
In sum, the USTR appears to be unaware or unappreciative of the potential of the GATS MFN obligation to force significant changes in United States immigration law under the threat of WTO authorized trade sanctions. Perhaps the USTR is, in a Machiavellian sense, acutely aware but willfully ignorant of such a potential. Regardless, the United States may be precariously positioned for an uncomfortable surprise if many of its immigration laws that protect the domestic labor market from international competition fall in a relatively short span of time following a dispute. In such a case, the United States may be forced, under the terms of GATS MFN, to truly compete internationally for the provision of services.
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Footnotes
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