Trade And Immigration Are Not Separate Issues

Trade And Immigration Are Not Separate Issues

Trade And Immigration Are Not Separate Issues
By Stuart Anderson

As President Barack Obama attempts to jumpstart immigration legislation, a new controversy is brewing. The reason is many people assume trade and immigration are separate issues. They’re not. Even in the U.S. Congress and at federal agencies, few officials realize that under a trade pact signed by the U.S. government in 1994, the U.S. risks trade retaliation if it fails to admit, within certain limitations, high-skilled foreign nationals to work in America. This 1994 trade pact stands like a roadblock on the highway for members of Congress who seek to enact new curbs on foreign-born professionals, researchers and scientists. Will influential U.S. senators attempt to run it?

Under the General Agreement on Trade in Services (GATS), the U.S. agreed to admit at least 65,000 foreign nationals on skilled temporary visas known as H-1Bs. Those admitted must be paid the higher of the prevailing or actual wage paid to similar U.S. workers. The treaty also allows the U.S. to require employers to recruit U.S. workers and not lay off Americans in the same job within 90 days of hiring individuals on H-1B visas. In addition, the U.S. government agreed to allow foreign companies to transfer into America from abroad executives, managers and individuals with specialized knowledge on L-1 visas.

International students earn one-half to two-thirds of advanced degrees from U.S. universities in key technology fields. And individuals who earn their degrees abroad are also important contributors to U.S. growth and innovation. Despite this, some U.S. legislators want to prevent skilled professionals from working in America. The controversy over these treaty commitments has not come to a head for only one reason–restrictive immigration measures against highly skilled foreign nationals have yet to become law. But that could change.

Sen. Bernard Sanders. I-Vt., recently attempted to attach his anti-immigration bill, S. 2804, as an amendment to tax legislation. The Sanders bill goes well beyond the job-specific layoff restrictions in the U.S. commitments under the GATS. It would prohibit any new work visa (and even the termination of existing ones) if during the previous 12 months a company filed a layoff notice under the Worker Adjustment and Retraining Notification (WARN) Act. For larger companies, closing down an unprofitable facility with 50 or more employees can easily trigger such a notice.

Sens. Richard Durbin, D-Ill., and Charles Grassley, R-Iowa, have also produced legislation, S. 887, which would institute a variety of changes to H-1B and L-1 visa law. It would require a higher wage to be paid to H-1B and L-1 visa holders than under current law, issue new rules on H-1Bs and layoffs, and prohibit new H-1B and L-1 visas for employers with more than 50 percent of their workforce in H-1B or L-1 status.

Now that comprehensive immigration reform appears dead in Congress, it is more likely that Sens. Sanders, Durbin and Grassley will attempt to attach their immigration bills to other pieces of legislation. Durbin and Grassley already convinced Sens. Harry Reid, D-Nev., Charles Schumer, D-N.Y., and Robert Menendez, D-N.J., to include these portions of their bill in a Democratic document released in May 2010 outlining immigration reform proposals.

A new legal analysis released by my organization, the National Foundation for American Policy (NFAP), found key provisions of both the Durbin-Grassley bill and the Sanders legislation would violate U.S. commitments under the General Agreement on Trade in Services. In addition, the study found attempts to raise the current $1,500 training/education fee employers pay to hire H-1B visa holders could also violate the GATS. Trade lawyers at the Washington, D.C.-based law firm of Jochum Shore & Trossevin, PC, performed the analysis.

The legal analysis took no position on whether such proposed legislative changes constitute sound immigration policy. But it does conclude that passing such legislation would be highly vulnerable to challenge from World Trade Organization members whose companies use H-1B or L-1 visas to perform services in the U.S.

Such a challenge, if successful, could lead to retaliation against U.S. exporters and harm America’s reputation on trade issues. This has alarmed business groups. “The U.S. Chamber of Commerce is very concerned that provisions in proposed immigration reform bills may violate international trade agreements,” said Randel K. Johnson, senior vice president of labor, immigration and employee benefits, U.S. Chamber of Commerce, who participated in a press briefing discussing the legal analysis.

Under U.S. trade commitments, market access includes allowing employers to hire individuals from another nation to work and provide services in America. If a World Trade Organization (WTO) member believes that another member is violating a U.S. commitment under the GATS commitments, then the complaining member may use the WTO dispute settlement mechanism. If the measure is found inconsistent with the GATS, the Dispute Settlement Body will recommend that the member bring its measure into conformity. If the member fails to bring the measure into conformity with the GATS, the complainant may seek authority to retaliate against the other party.

Sen. Grassley’s office responded to the study by saying, “Sen. Grassley considers each bill to be consistent with existing U.S. commitments under the General Agreement on Trade in Services.” And that “Sen. 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.”

With any luck, members of Congress will try to pass legislation that strengthens America’s competitiveness by keeping the door open to highly skilled professionals, scientists and researchers. Attempts to restrict such skilled individuals will undermine efforts to compete in the global economy and risk a trade war at a time when the United States and its global partners can least afford it.

Source: Forbes, June 30, 2010

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