RP to protect OFWs, local BPOs using WTO platform

Written by Max de Leon / Reporter

Thursday, 12 March 2009 22:41

WITH the crisis tempting economies to implement protectionist policies that may also affect trade in services, the government is now looking at using the World Trade Organization (WTO) platform to protect overseas Filipino workers (OFWs) and the local business-process outsourcing (BPO) sector—which combine for about $26 billion in dollar earnings—from new regulations that could be enforced by the member-countries. Foreign Affairs Undersecretary Edsel Custodio said he will ask the Philippine trade negotiating team in Geneva to propose to the WTO the adoption of a status quo principle in the implementation of new policies or regulations among its 140 member-economies that would restrict cross-boarder services trade and movement of natural persons. Custodio said this should become a negotiating principle while new rules under the WTO-General Agreement on Trade and Services (GATS) are still being formulated. “Because we are benefiting from BPO, it is to our advantage to come up with a proposal like that,” Custodio told the BusinessMirror at the sidelines of a WTO forum, organized by the Philippine Chamber of Commerce and Industry and the Universal Access to Competitiveness and Trade at the Dusit Hotel on Thursday. He said right now, with the crisis making governments think of protectionist policies, there is no guarantee that there will be no new regulations that will restrict trade in services. For example, Custodio said what if the United States would follow up on its “Buy-American” policy by coming up with a law penalizing companies that would outsource some of their operations to other countries? Without a WTO agreement, Custodio said there would be no avenue for the Philippines to seek dispute settlement if these kinds of regulations are adopted. The GATS agreement covers four modes for services trade, and cross-boarder supply, which applies to BPOs, is in Mode 1, while movement of natural persons is in Mode 4. In 2008 the local BPO sector contributed about $6 billion to the domestic economy, while the OFWs remitted about $20 billion to their families both through the banks and through informal channels. Custodio said WTO Director-General Pascal Lamy has already made a statement that countries should resist protectionist policies.