Study Claims Senate Visa Proposals Could Violate GATS, Grassley Objects

Study Claims Senate Visa Proposals Could Violate GATS, Grassley Objects

Study Claims Senate Visa Proposals Could Violate GATS, Grassley Objects
By Erik Wasson

Limitations on visas for highly skilled workers proposed as part of an immigration reform outline that Senate Democrats prepared in April to attract bipartisan support would likely violate U.S. commitments under the General Agreement on Trade in Services (GATS) and could invite trade retaliation, according to a study by the National Foundation for American Policy (NFAP) released on June 16.

The group describes itself as a non-partisan, non-profit think tank, and hired the law firm of Jochum Shore & Trossevin to write the study.

The congressional immigration reform bill outline proposes to add new restrictions on the uses of the visas, such as expanding restrictions on issuing visas related to domestic layoffs and raising minimum wages for visa recipients. The NFAP study claims that these are inconsistent with the limited restrictions the U.S. included in its GATS schedule.

The new restrictions would serve to nullify and impair market access granted other WTO partners under the GATS and could spur a WTO dispute settlement case from such countries as India, according to Marguerite Trossevin, an attorney who prepared the study.

Stuart Anderson, the executive director of the NFAP who worked at the Immigration and Naturalization Service under the Bush administration said in the press call that if immigration legislation does stall this year,
as many predict, there is an increased chance members will try to attach the legislation to other bills that must be passed.

Business organizations such as the U.S. Chamber of Commerce have long opposed restrictions on H-1B visas and a Chamber representative said this week the study would prove a valuable tool in combating the restrictions in Congress. According to Anderson, the Chamber did not help finance the study despite its general support for its findings.

Randy Johnson of the Chamber of Commerce, who participated in the press conference, said that business associations “have not focused on this possible conflict to the extent we should have” and the Chamber would now raise it to members of Congress.

He said there is a serious risk that the provisions could become law this year. “This study is a real eyeopener,” he said, noting that potential trade retaliation from a WTO case could affect a wide swath of U.S. services companies.

The 26-page outline for comprehensive immigration reform was unveiled in late April by Senate Majority Leader Harry Reid (D-NV), Sen. Charles Schumer (D-NY) and Sen. Robert Menendez (D-NJ) as the basis for an immigration bill that would include tough enforcement provisions to attract Republican support.

The outline lays out proposed new restrictions on H-1B visas in general terms in a way that NAFP says refers to two previously introduced bills: S. 887 sponsored by Sen. Richard Durbin (D-IL) and Senate Finance Committee Ranking Member Charles Grassley (R-IA), and S. 2804 sponsored by Sen. Bernie Sanders (I-VT) and Grassley. Sanders has already attempted to attach S.2804 to tax extenders legislation this year.

Grassley’s staff this week rejected the NFAP analysis. “Senator Grassley considers each bill to be consistent with existing U.S. commitments under the General Agreement on Trade in Services,” a Grassley spokeswoman said.

“Senator Grassley will continue fighting for American workers in this time of unacceptably high unemployment, and he will do so in a manner consistent with our international obligations.”

The NAFP study concludes that the proposed outline on H-1B highly skilled worker visas and L-1 intracompany transfer visas appear to nullify and impair U.S. Mode 4 commitments under GATS by introducing restrictions not reflected in the U.S. schedule.

In the GATS, the U.S. committed to permit entry using H-1B visas of up to 65,000 persons annually engaged in set “specialty occupations.” The GATS commitment contains limitations on the wage paid and specifies that the wage must be equal to pay for comparable employees or to the prevailing wage. It also states that the employer sponsoring the visa applicant cannot have laid off workers in the 90 days prior and 90 days after the visa petition, amounting to a total of 180 days of layoff restriction.

On H-1B visas, S.887 would among other things extend the layoff restriction to a total of 360 days and raise the wage requirement to the median average wage or the median wage in the Department of Labor’s “level 2” for that occupation. It would also forbid employers with more than 50 employees from being sponsoring H-1B visas if more than 50 percent of their current employees hold H-1B visas.

The bill would also apply the wage provisions to L-1 visas which are visas available to employees of companies that have offices in both the United States and their home country or for managers that are attempting to set up a company’s first-time office in the United States.

These managers would not be granted visas if they had received two or more L-1 visas in the two prior years, according to the outline.

Additionally, for a one-year L-1 visa, companies would have to show to show the ability to commence operations upon approval of the visa. For extensions, the outline would require employers to be doing business at the new office on the date of visa application.

Trossevin added that this provision would defeat one of the main purposes of L-1 visas, which are to allow managers to enter the U.S. to set up new enterprises.

S. 2804 would require employers petitioning for H1-B and L-1 visas not to have notified a mass layoff under the Worker Adjustment and Retraining Notification Act (WARN) in the previous year and to declare they do not intend to file a WARN notice at this time.

Furthermore, if any WARN act notice is file, existing visas will be made to expire in 60 days. The layoff requirement is stricter that the GATS commitments for H1B and would create a layoff restriction for the first time for L-1.

Trossevin said that WTO members such as India, which heavily uses H1-B visas, could come under domestic pressure to bring a WTO case from domestic firms. She indicated that a case could be brought even though such a move could hamper developing country’s goal raising of the U.S. 65,000 cap on H1-B visas. India has pushed for the cap to be raised in bilateral talks and in the context of the WTO Doha round.

Trossevin also noted that if the U.S. were to try to withdraw its GATS commitment as it did for Internet gambling in the wake of the Antigua gambling case, it would have to make costly offsetting concessions to other WTO members.

Source: World Trade Online, June 18, 2010

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