Peter Gallagher

Time to buy West­ern Union (NYSE: FDC). The World Bank’s Global Eco­nomic Prospects for 2006 has just appeared (a 2.8mb pdf file, but ‘lighter’ ver­sions are avail­able here). It ana­lyzes the huge flows of worker’s remit­tances, show­ing that even the recorded flows to devel­op­ing coun­tries are big­ger than the devel­op­ment assis­tance bud­gets of devel­oped coun­tries. But, for WTO, migra­tion may be the next ‘agri­cul­ture’.

“Inter­na­tional remit­tance flows to devel­op­ing coun­tries are expected to rise to $167bn (€143bn, £97bn) this year, twice the amount of offi­cial aid paid by gov­ern­ments, the bank said in its Global Devel­op­ment Prospects report.

Unre­ported flows mean that remit­tances are prob­a­bly 50 per cent greater than the recorded num­ber, at a con­ser­v­a­tive guess, the bank said. Up to 45 per cent of total remit­tances are paid by migrant work­ers in other poor coun­tries, it said.”(Finan­cial Times)

In the terms of the WTO’s Gen­eral Agree­ment on Trade in Ser­vices, the tem­po­rary move­ment of workers—such as con­struc­tion work­ers or nurses or ships-hands—from one cus­toms ter­ri­tory to another is known as the ‘fourth mode’ of ser­vices deliv­ery. But it’s been one of the hard­est issues to deal with in WTO; in part because many devel­op­ing coun­tries are just as obsti­nately opposed to lib­er­al­iz­ing this vital trade as the devel­oped countries.

Here’s just a taste from the Overview of the report that indi­cates the fas­ci­na­tion and the dif­fi­culty of this huge, but so-far largely under­ground issue for the mul­ti­lat­eral trad­ing system:

“Over the past two decades, bar­ri­ers to cross-border trade and finan­cial trans­ac­tions have fallen sig­nif­i­cantly, while bar­ri­ers to the cross-border move­ment of peo­ple remain high. Despite its eco­nomic ben­e­fits, migra­tion remains con­tro­ver­sial and, for some peo­ple, threat­en­ing. In part, this is because migra­tion, like trade and cap­i­tal move­ments, has dis­trib– utional con­se­quences, whereby net gains for soci­ety may mask impor­tant losses for some indi­vid­u­als and groups. But migra­tion also sparks resis­tance because the move­ment of peo­ple has eco­nomic, psy­cho­log­i­cal, social, and polit­i­cal impli­ca­tions that the move­ment of goods or money do not.” Global Eco­nomic Prospects, 2006

If, as I still expect, the Doha round begins finally to dis­man­tle the absurd, his­tor­i­cal pro­tec­tion of indus­trial coun­try agri­cul­ture, migra­tion may be the next major chal­lenge for the mul­ti­lat­eral trad­ing system.