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Local content in the oil and gas sector (World Bank)

"A number of countries have recently discovered and are developing oil and gas reserves. Policy makers in such countries are anxious to obtain the greatest benefits for their economies from the extraction of these exhaustible resources by designing appropriate policies to achieve desired goals. One important theme of such policies is the so-called local content created by the sector- the extent to which the output of the extractive industry sector generates further benefits to the economy beyond the direct contribution of its value-added, through its links to other sectors. Local Content Policies (LCPs) were first introduced in the North sea in the early 1970s and ranged from restrictions on imports to direct state intervention in the oil sector. While LCPs have the potential to stimulate broad-based economic development, which is necessary to alleviate poverty and achieve the United Nation's Millennium Development Goals (MDGs), their application in petroleum-rich countries has achieved mixed results. This paper serves to introduce the topic by describing policies and practices meant to foster the development of economic links from the petroleum sector, as adopted by a number of petroleum-producing countries both in and outside the Organization for Economic Co-operation and Development (OECD). The paper is organized as follows: chapter one defines local content and briefly illustrates the links between the petroleum sector and other economic sectors (where policies may be able to increase the economic benefits of the petroleum sector). An attempt is made to measure local content levels in a wide sample of petroleum-producing countries including net importers and net exporters, and countries at different stages of economic development to put LCPs in context and to consider if the structure of an economy is a key driver of local content levels. Chapter two discusses the arguments that have been used in favor and against the use of productive development policies in general and LCPs in particular. Chapter three provides an outline of the tools and types of LCPs that have been used by petroleum producing countries, and present their strengths and weaknesses. Chapter four focuses on issues related to the measurement and monitoring of LCPs, and discusses the limitations of alternative metrics. Chapter five provides a description of LCP objectives, implementation tools, and reporting metrics used in a selected sample of oil-producing countries including Angola, Brazil, Kazakhstan, Indonesia, Malaysia, and Trinidad and Tobago and draw initial lessons that may be relevant to other countries"

Certain U.S. Laws for Foreign Workers Draw Fire from India in the WTO

This is a Congressional Research Reports report (PDF) on the DS503 case. Note that they say that there is a possibility of the US losing the case, and having to modify behavior on the contested parts of our work visa system, which includes the quotas that limit the rate of increase in job outsourcing workers and GATS Mode 4 generally. It's only because of the quotas that far more jobs that can be, are not offshored. Professor Alan Blinder of Princeton found that 26% of all US jobs could be outsourced and offshored.

What is "Services Liberalization", and what does it mean for our way of life?

Bluntly, as they describe it, the high cost of labor in the developed countries is acting like a huge weight around corporations necks, forcing capital to invest in developing countries, not in us. What is really happening is the system has become less and less dependent on any one workforce. Increased profits are motivated by both greed and increased competition for jobs.

International Regulatory Initiatives in Services: Background Note by the Secretariat - WTO Document S/C/W/97

The main goal of the GATS is trading services, roughly 80% of a modern economy and including most jobs. This is an area that most people don't associate with trade nor do they realize that its been put in the hands of the WTO. One important part of the neoliberal project is trade across borders in various kinds of work. Importing workers to do jobs they can do more economically than "locals". (This initiative was only in its earliest stages in 1997 when this Note was written, now that its more than 20 yrs later its much farther along, but, except in a few service sectors like IT, the US is dragging its feet). Eventually the neoliberal project hopes that trillions of dollars "now wasted on over-high wages" could be "saved" and transformed into profits. Basically, like NAFTA, but for the rest of the country's jobs. Under Track Two of the GATS, barriers to global outsourcing, offshoring, etc. of professional and non-professional services such as work permit or visa barriers or anti-discrimination statutes that might impede outsourcing and similar are quietly being eliminated on a global scale. Outsourcing and offshoring jobs that people depend on to eat out from underneath entire countries and generations of workers is a very sensitive subject so the strategy is "Privatization by stealth".

Boeing’s 737 Max Software Outsourced to $9-an-Hour Engineers

Planemaker and suppliers used lower-paid temporary workers. Engineers feared the practice meant code wasn’t done right. It remains the mystery at the heart of Boeing Co.’s 737 Max crisis: how a company renowned for meticulous design made seemingly basic software mistakes leading to a pair of deadly crashes. Longtime Boeing engineers say the effort was complicated by a push to outsource work to lower-paid contractors. The Max software -- plagued by issues that could keep the planes grounded months longer after U.S. regulators this week revealed a new flaw -- was developed at a time Boeing was laying off experienced engineers and pressing suppliers to cut costs.

Informal Brief: The WTO Services Negotiations and Migrant Workers (AFSC)

As the World Trade Organization (WTO) gears up for the next ministerial meeting to be held December 2005 in Hong Kong, some developing country governments are pushing for an expansion of the types of labor currently covered under the services agreement. Under the WTO’s General Agreement on Trade and Services (GATS), services are categorized into four “modes”. These include: Mode 1 ­ Providing services abroad Mode 2 ­ Consumption of services abroad Mode 3 ­ Commercial Presence ­ Subsidiary branches including service providers such as a banks, hospitals, or construction ­firms that are owned by a foreign company Mode 4 – Temporary movement of natural persons (workers) acro ss boarders to provide services Mode 4 and temporary workers Sectors currently covered under GATS Mode 4 commitments focus on highly skilled jobs, such as doctors, nurses, company executives—sectors favored by current visa systems. Also favored by current commitments are categories of special importance to Mode 3, commercial presence, such as intra­company transferees. Some developing country governments want to expand services covered under Mode 4 to include medium and low ­skilled workers, such as domestic help or construction, thus covering sectors in which they hold a competitive advantage.

GATS, Migration, and Labor Standards

(Search domain www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/publication/wcms_193612.pdf Mode 4]," Abdel-Hamid Mamdouh, director of trade in services at the World Trade Organization said "Ah, yes - it could be hundreds [of millions] if we liberalize." John Zarocostas, Migration helps export services, Washington Times, January 3, 2005, p. A10.

TISA - backdoor services liberalisation on a global level!

The Trade in Services Agreement (TISA) currently under negotiation on the side-line of the World Trade Organization (WTO) poses significant deregulatory threats for the majority of services sectors. International trade in services is dealt with by the General Agreement on Trade in Services (GATS) and its annexes. Each WTO country so far autonomously decides which sectors are to be opened up to cross-border competition. Services sectors liberalisation is carried out once governments gave their explicit agreement to do so (positive lists). TISA intends to reverse this logic and implement a negative listing of liberalisation commitments. Only explicitly targeted sectors in the agreement would not be subject to further liberalisation. This poses significant risks of liberalising all services sectors of the economy unless explicitly exempted from the agreement. TISA would contain “Standstill” and “Ratchet” clauses. Standstill clauses effectively freeze the degrees of regulation in particular sectors and countries are no longer free to implement more strident regulatory provisions. A recently leaked text showed that the financial services industry, through TISA, intends to freeze international financial regulatory efforts by setting a minimum regulatory floor which could not be subsequently superseded by any government wishing so. Ratchet clauses effectively impede government to reverse achieved liberalisation floors. Once a sector is liberalised, there cannot be a turning back. These clauses mean that governments will no longer be able to challenge decisions and choices made by previous governments. The combination of the ratchet and standstill clauses renders the reversal of liberalisation levels impossible. Additionally, TISA could prescribe necessity tests for regulatory measures. Governments would have to prove the necessity of a regulatory instrument before implementing it. For example, in a discussion of universal coverage, a Government would have to prove the necessity of re-regulating already privatised services such as postal services.