Legal Framework for Cross-Regional Networks: The Case of Services and Migration

Paper prepared by Marion Panizzon and Charlotte Sieber-Gasser for the International Conference on the Political Economy of Liberalising Trade in Services, Hebrew University of Jerusalem, 14-15 June 2010 Recent literature has shed light on the economic potential of cross-border networks. These networks, consisting of expatriates and their acquaintances from abroad and at home, provide the basis for the creation of cross-border value added chains and therewith the means for turning brain drain into brain circulation. Both aspects are potentially valuable for economic growth in the developing world. Unilateral co-development policies operating through co-funding of expatriate business ventures, but also bilateral agreements liberalising circular migration for a limited set of per-sons testify to the increasing awareness of governments about the potential, which expatriate networks hold for economic growth in developing countries. Whereas such punctual efforts are valuable, viewed from a long term perspective, these top-down, government mandated Diaspora stimulation programs, will not replace, this paper argues, the market-driven liberalisation of infrastructure and other services in developing countries. Nor will they carry, in the case of circular labour migration, the political momentum to liberalise labour market admission for those non-nationals, who will eventually emerge as the future transnational entrepreneurs. It will take a combination of mode 4 and infrastructure services openings-cum regulation for countries at both sides of the spectrum to provide the basis and precondition for transnational business and entrepreneurial networks to emerge and translate into cross-border, value added production chains. Two key issues are of particular relevance in this context: (i) the services sector, especially in infrastructure, tends to suffer from inefficiencies, particularly in developing countries, and (ii) labour migration, a highly complex issue, still faces disproportionately rigid barriers despite well-documented global welfare gains. Both are hindrances for emerging markets to fully take advantage of the potential of these cross-border networks. Adapting the legal framework for enhancing the regulatory and institutional frameworks for services trade, especially in infrastructure services sectors (ISS) and labour migration could provide the incentives necessary for brain circulation and strengthen cross-border value added chains by lowering transaction costs. This paper analyses the shortfalls of the global legal framework – the shallow status quo of GATS commitments in ISS and mode 4 particular – in relation to stimulating brain circulation and the creation of cross-border value added chains in emerging markets. It highlights the necessity of adapting the legal framework, both on the global and the regional level, to stimulate broader and wider market access in the four key ISS sectors (telecommunications, transport, professional and financial services) in developing countries, as domestic supply capacity, global competitiveness and economic diversification in ISS sectors are necessary for mobilising expatriate re-turns, both physical and virtual. The paper argues that industrialised, labour receiving countries need to offer mode 4 market access to wider categories of persons, especially to students, graduate trainees and young professionals from abroad. Further-more, free trade in semi-finished products and mode 4 market access are crucial for the creation of cross-border value added chains across the developing world. Finally, the paper discusses on the basis of a case study on Jordan why the key features of trade agreements, which promote circular migration and the creation of cross-border value added chains, consist of trade liberalisation in services and liberal migration policies.

Consumption and food production in crisis time: Swiss consumption co-operations as farmers at the End of World War I

During the last two years of World War I food supply in Switzerland declined and caused shortcomings in consume, leading to social distress and conflict. Mainly two important factors caused these problems: First, Switzerland was highly dependent on food imports and during the war traditional supply lines faded. Second, weather extremes in the years 1916–1917 caused crop failure all over Europe and North America, which intensified the decline of food trade between the nations. In 1918 a conflict between classic urban consumers, such as workers, and famers erupted due to the food shortcomings and led to a lasting discord between urban and agrarian regions in Switzerland. But there was not only disharmony and conflict between the urban and agrarian regions. As a matter of fact several agents (urban and agrarian) interested in presenting adequate coping strategies to overcome the food shortages developed ideas of alternative ways of food production and supply since 1917. The aim of the paper is to outline these strategies that were undertaken to create a new era of food production that was not solely dependent on the agrarian sector or the import-trade. Actual growing of vegetables in estate areas is an important, but just one, factor of establishing a new system of food production, distribution and consume. The market-leading grocery stores in Switzerland nowadays (Coop and Migros) started their business during that time as co-operatives establishing new forms of distribution and food-production. So the interest of the paper is not only in actual «urban farming», but it wants to share some light on how swiss urban and agrarian spheres overlapped their functions in order to create a modern system of agro food-chains at the beginning of the interwar period.