Legalized Human Trafficking


he World Trade Organization
(WTO) negotiations in Hong Kong in December 2005 have been praised
in the mainstream U.S. media for further freeing world trade to
bring greater global prosperity. 

Meanwhile, criticisms of the WTO are diverse, but a common theme
emerges; namely, that the WTO is promoting a model of global trade
in goods and services that, far from lifting millions out of poverty
as proponents claim, will impoverish millions, threaten the space
available to them for democratic self-determination, and further
endanger the environment. 

This article focuses on a specific aspect of the WTO, namely “Mode
4” of the General Agreement on Trade in Services (GATS), which
deals with the “movement of natural persons.” 

The WTO negotiations cover three broad areas: (1) Agriculture; (2)
Services, which include utilities such as water and electricity,
banking and financial services, tourism, transportation, health
care, education, and a host of other sectors; and (3) “Non
Agricultural Market Access,” meaning anything that’s not
agriculture and services, including fisheries, forest products,
mining, and manufacturing. 

The Services area, in turn, consists of four “modes” of
trade. Mode 1 deals with a customer in one country obtaining services
from a provider in another (for example, a U.S. business hires a
French accountant based in Paris). Mode 2 consists of persons from
one country traveling to another and using services there (tourism
is the obvious example). Mode 3 consists of service firms from one
country setting up shop in another. Mode 4 deals with people from
one country settling down in another. Mode 4 deals only with temporary
migrants who go to a foreign country to work for a limited (specified)
time, for a particular job with a particular employer or to fulfill
a specific contract. This category is often called guestworkers. 

GATS Mode 4 and the system of short-term foreign guestworkers that
it promotes is a threat to guestworkers and to native-born workers
in the countries where they work. It is a threat to long-standing
human rights principles and a threat to the long-term development
prospects of the countries of origin of guestworkers. 

Trading in People 


nder guestworker programs, workers will not
enjoy the customary legal rights they are entitled to in their home
countries or that native-born workers in the host country have.
In theory they will be covered by legal protections from their own
country. In practice, that’s meaningless—being in a foreign
country, they will lack physical access to labor unions, legal services,
human rights organizations, and courts in their own country. Even
in the extremely unlikely event that they were to surmount these
barriers and attempt to file legal proceedings in their home country
against their employer, the jurisdiction of the courts in most cases
will not apply because the abuse will have occurred outside the
territory of the worker’s home country. It’s also quite
likely that the employer will be based in a third country. (For
example, an Australian contractor can win a contract in Germany,
recruit workers in the Philippines, bring them into Germany under
GATS Mode 4, abuse them, and not be accountable under Philippines

Unfortunately for the guestworkers, they are not going to be protected
by the laws of the host country either. Under Mode 4, guestworkers
will be contractually bound to an employer, they are unlikely to
have the right to join a union and they may even be required by
contract to pay their employer for their passage out of their country.
Such an exploitative scenario is possible because guestworkers will
be classified as “service providers” rather than as workers
and their movement across borders will be regarded as “trade”
rather than migration, according to draft Mode 4 language, thus
excluding them by definition from even the limited protections they
may enjoy as migrant workers under International Labor Organization
(ILO) provisions or under domestic law in the host country. 

The treatment of guestworkers will probably vary by host country
and by circumstance, with some hosts providing marginally more protection.
In the absence of binding legal commitments to provide protections
to guestworkers, host countries are under no obligation to do so,
and often won’t, whether to appease xenophobia at home or out
of deference to foreign investors. Even when a host country tries
to protect the rights of guestworkers, they may not be allowed to
do so under GATS. 

Migrants’ rights advocates worldwide have described this as
the creation of a 21st century system of indentured servitude and
argue that “migration policy must acknowledge migrants as human
beings and address their dignity and human rights” (as proclaimed
in a joint statement from numerous U.S. human rights and immigrant

GATS Mode 4 thus represents a retrograde step for migrants’
rights. Over the last several decades, the definition and coverage
of human rights has expanded significantly, at least on paper, with
successive United Nations conferences and conventions on the rights
of women, indigenous peoples, and other marginalized populations.
For migrant workers, the relevant international instrument is the
Convention on Migrant Workers, which has unfortunately only been
ratified by 27 countries to date. GATS will render this convention
obsolete before it can be further ratified, thus undermining decades
of work by human rights activists, organized labor, and others to
remake global immigration policies in a more humane manner. Effectively,
GATS is “setting up a separate sphere of migration not based
on rights, which works to legitimize the idea that migrant workers
don’t deserve rights,” says Bjorn Jensen of the American
Friends Service Committee (AFSC). 

Speculation has been rife about what categories of workers Mode
4 will cover. At present it appears to be more geared towards the
movement of highly skilled workers, such as doctors and computer
programmers. While the potential for exploitation of these workers
is probably less than for unskilled workers, it nevertheless is
a concern. The experience of foreign high-tech workers in the U.S.
under the H1B visa program shows how even skilled workers face lack
of job portability (i.e., being contractually tied to one employer)
and are vulnerable to layoffs. During the “dot com bust”
in the U.S, when firms in the computer industry laid off large numbers
of employees, the first to lose their jobs were the foreign workers
with H1B visas. 

Gender Inequality 


s with any exploitative labor market, particularly
vulnerable sectors of workers—mainly women —will fare
even worse, as shown by present-day trends. According to the United
Nations Development Fund for Women (UNIFEM), women constitute 50
percent or more of migrant workers in Asia and Latin America and
they significantly outnumber men in countries such as Indonesia,
the Philippines, and Sri Lanka. Colin Rajah of the Oakland, California-based
National Network for Immigrant and Refugee Rights (NNIRR) points
out that most women migrant workers are in precarious jobs, often
at the mercy of their employers and recruiting agencies. 

the U.S., there are numerous documented examples of women domestic
workers being held in near-slavery conditions. The parallel between
the legal situation of domestic workers in the U.S. and of “service
providers” under Mode 4 is disturbing indeed. Domestic workers
are often brought into the U.S. legally by employees of embassies,
the United Nations, the World Bank, the International Monetary Fund,
and other international institutions under special visa categories
(A-3 and G-5) with few attendant rights, much as would happen under
GATS. The Break the Chain Campaign of the Institute for Policy Studies
and other domestic worker advocacy organizations have documented
abusive conditions faced by domestic workers in the U.S., which
include having their passports taken away, being almost imprisoned
in their employers’ homes, lacking proper food, verbal and
physical abuse, and sexual assault. 

A Wider Race to the Bottom 


igrant workers are not the only workers threatened
by GATS Mode 4. It gives employers the flexibility to cut labor
costs by firing their own workers and contracting with a labor supplier
who can bring in foreign workers at lower pay (with very few legal
rights). The incentive to save on labor costs and ensure a docile,
easily exploitable workforce is strong and joblessness is likely
to increase in the host country as a consequence. Even the threat
of bringing in foreign guestworkers can be used by employers to
force unions to accept undesirable provisions in contracts or to
force employees to give up unionization drives. Thus far, manufacturing
workers in wealthy countries like the U.S. have seen their jobs
migrate to foreign sweatshops, but service workers have been relatively
immune from this threat, since geographical presence is a prerequisite
for many types of services. Under GATS, however, employers can legally
bring the sweatshop home to the U.S., threatening service sector
workers here with the same trend of mass layoffs that manufacturing
workers have had to deal with. 

The migration of skilled workers poses its own problems for the
countries of origin. It is expected that the movement of workers
under Mode 4 will typically be from poorer countries to wealthier
countries. GATS thus sets up a “brain drain” scenario
in which poor countries with a small number of educated professionals
will lose many of them to emigration. 

For example, for a country with a shortage of doctors, of medical
colleges to train doctors, and of people with the educational background
to be admitted to medical college, the loss of doctors is disastrous.
Similarly, the loss of engineers, computer programmers, architects,
accountants, and so on will devastate poor countries. 

Some Global South countries, particularly India, have pushed for
the expansion of Mode 4 for high-skilled workers, such as computer
programmers, in the hope that they will benefit by exporting one
of the few “commodities” in which they have a competitive
advantage, namely cheap, highly skilled labor. Besides being an
unconscionable commodification of their own citizens on the part
of these governments, it is also shortsighted economic policy of
the kind that noted Indian economist Jayati Ghosh terms the “political
economy of self-delusion.” 

It is risky for an economy to be too dependent on remittances from
emigrants, for a multitude of reasons. The most serious risk is
that changing political realities in the host countries—such
as a marked shift towards xenophobia— can stop the flow of
migrants into labor-importing countries or, even worse, reverse
the flow of migrants by sending people back and thereby stop the
flow of remittances back to the migrants’ home countries. Rising
xenophobia in host countries can also manifest itself in taxes,
penalties, and other financial roadblocks to remittances. 

if migrants are not barred from host countries or prevented from
remitting their savings back home, financial institutions providing
money transfer services take a growing bite out of remittances.
Profiteering by money transfer services such as Western Union is
already a problem. The Transnational Institute for Grassroots Research
and Action (TIGRA) estimates that in 2005, immigrants in the U.S.
will remit $170 billion to the Global South, but the wire transfer
companies will pocket $25-30 billion of this money. As the money
transfer industry grows, it is likely that migrant workers will
be gouged even worse by wire transfer services. 

Building a Movement 


n the U.S. and other Northern countries,
the opposition to Mode 4 provisions comes from opposite ends of
the political spectrum. Expectedly, immigrants’ rights and
workers’ rights organizations are mobilizing against threats
to immigrants’ labor rights, and more fundamentally their very
humanity, embodied in GATS. Right-wing, anti-immigrant organizations
for their part have their own criticisms of Mode 4 because they
oppose any program that brings large numbers of foreigners into
their country, even though they often couch their opposition in
different terms. For example, the Center for Immigration Studies,
a U.S.-based anti-immigration think tank, takes the position that
negotiating guestworker programs in the WTO places the entire framework
of U.S. immigration law at risk of being challenged as a “trade
barrier” and overturned in the WTO dispute resolution process. 

Even though motivations are different, immigrants’ rights groups
thus find themselves advocating for similar outcomes as the very
same right-wing groups whose agenda they are normally battling in
the public policy arena.  

Most immigrants’ rights organizations (certainly, all the groups
the author is aware of) know better than to attempt to form an alliance
of convenience with the right wing. Progressives’ responsibility
is to articulate a position that is clearly different from the anti-immigrant
agenda and to emphasize this difference at every opportunity. As
NNIRR’s Rajah puts it, the first and foremost reason that immigrants’
rights groups oppose GATS Mode 4 is “because it jeopardizes
the well-being and human rights” of immigrants; this needs
to be articulated again and again so as not to allow our opposition
to Mode 4 to even unintentionally strengthen the right wing. 

Related to this question is how progressives can win labor support
on these issues without pandering to xenophobic positions. The labor
movement in the U.S. (and other wealthy countries) is legitimately
concerned about loss of job security and erosion of working conditions
for its membership under GATS guestworker provisions. The challenge
is how to channel these concerns into a progressive movement for
the rights of all workers, whether native born or immigrant, instead
of pitting one group of workers against another. According to Rajah,
the struggle is not against foreign workers who will swarm our shores
and take away our jobs, but rather against “policies that unjustly
drive down worker protections here and abroad, and the incessant
demand by corporations for cheap, disposable labor.” Jensen
echoes this analysis by stressing that all workers need to “question
a system that pits workers against each other to work for less and
less under worse and worse conditions while allowing top management
to earn salaries hundreds of times the average workers’ pay.”
These ideas form the nucleus of a progressive agenda linking immigration
and economic justice.


Sen is a freelance writer and activist in Washington, DC, who works
on global economic justice, immigrants’ rights, and housing justice