BackIndia, US hold secret bilateral talks over WTO visa dispute
Although the two sides remain silent about the overall consultations, experts say chances of a resolution seem bleak due to growing opposition to H-1B visas
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Geneva: India and the US on Friday held “confidential" bilateral consultations at the World Trade Organization (WTO) for resolving several issues raised by New Delhi in a major trade dispute against Washington’s alleged barriers on the movement of short-term services providers, or non-immigrant visas, but the chances of an amicable outcome appear difficult, according to experts of trade in services.
In a three-page complaint filed more than two months ago, India raised two sets of issues concerning the US’s “measures relating to Fees for L-1 and H-1B visas", and “measures relating to Numerical Commitment for H-1B visas".
While the HI-B visa category corresponds to the US’s commitments in the GATS schedule with respect to natural persons engaged in “speciality occupations", the L-1 visa category corresponds to intra-corporate transferees. GATS refers to the general agreement on trade in services, a WTO treaty.
During the two days of consultations under Article 4 of the dispute settlement understanding, India and the US have exchanged their views on specific issues raised by India on various US measures on non-immigrant visas.
These measures include the US Consolidated Appropriations Act of 2016 (Public Law 114-113)—which would require higher filing fees and fraud prevention and detection fees under specific circumstances—and Section 402 of the Emergency Border Security Supplemental Appropriations Act of 2010 (Public Law 111-230)—which was valid for the period between 13 August 2010 and 30 September 2015, involving higher filing fees and fraud prevention and detection fees of an additional amount of more than $2,000.
India had maintained that “the current measures, under Public Law 114-113, has increased the earlier fees under Public Law 111-230 by twofold, and makes the enhanced fees applicable for extension of the visa status as well". New Delhi argued that these measures appear to be inconsistent with the US’s schedule of specific commitments under GATS.
India also maintained that the US measures denied Indian IT companies favourable treatment as compared to American companies offering “like" services in sectors such as the computer and related services sector, thereby resulting in non-compliance of obligations the US undertook in its scheduled GATS commitments.
In short, the US measures, according to India, “affect the movement of natural persons (short-term services providers) seeking to supply services in a manner that is inconsistent with the United States’ commitments in its Schedule of Specific Commitments".
“These measures also appear to nullify or impair the benefits accruing to India directly under the GATS," India complained. New Delhi maintained that the American measures on non-immigration visas are not in conformity with various GATS core provisions.
India challenged the US on the issue of numerical commitments for H-1B visas for up to 65,000 people annually, saying Washington has subsequently modified the commitment in its free trade agreements with Singapore and Chile that affect the Indian quota. Besides, the short-term services providers from Singapore and Chile are offered better benefits that “raise overall barriers for services suppliers seeking entry into the United States", India maintained.
Although the two sides remain silent about the overall consultations, including the specific issues raised by India, experts said the chances of an amicable resolution seem bleak because of the growing opposition to the H-1B visas. Republican presidential candidate Donald Trump has targeted the H-1B visa on the grounds that it is leading to jobs being denied to American skilled personnel.
Indian IT companies such as Tata Consultancy Services Ltd, Wipro Ltd and Infosys Ltd are among the biggest users of H-1B visas, along with American giants that hire in India such as Microsoft Corp. and Google Inc.
Depending on the overall assessment of the responses it receives from the US, India will decide either to drop the dispute or press ahead with a request for establishing a WTO dispute settlement panel, according to a European expert.
Recently, when India tabled a proposal for comprehensive discussion on escalating regulatory barriers on the movement of short-term services providers under Mode 4 at the WTO, the US blocked the WTO Secretariat from preparing a white paper on the grounds that the issue had been raised in a trade dispute by India. Major industrialized countries secured substantial market access in developing nations for their capital-intensive services such as financial services, telecom services, distribution services and courier services among others.
But the industrialized countries have slapped increasingly complex barriers to Mode 4 entry, according to a WTO Secretariat background paper of 2009. Under Mode 4 of trade in services, industrialized countries had promised in the previous Uruguay Round to provide increased market access for short-term services providers on a non-immigration basis. That promised market access under Mode 4 has not fully materialized because of continued barriers through domestic regulation in industrialized countries.
Further, the Indian non-immigrant service suppliers, who typically stay for a period of three to seven years, are forced to pay approximately $1.6 billion towards the US Social Security System. The cumulative contributions made by the Indian service suppliers in the past six years in the US ranges between $8 billion and 12 billion for social security.
However, when such people return to India after performing their services, they do not obtain any benefits in respect of their social security contributions, India has said. “In a nutshell, a service supplier on a non-immigrant visa loses all his social security contributions since there is no mechanism for refund, or of portability of such benefits to the home country," New Delhi maintained.
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