ASEAN Economic Community Scorecard: Performance and Perception

6. Free Flow of Skilled Labour in ASEAN

6 Free Flow oF Skilled labour in aSean Chia Siow Yue i. introduction The AEC provides for market access for ASEAN skilled labour, that is, professionals and skilled manpower. “Free flow of skilled labour” affects the implementation of the ASEAN Framework Agreement on Services (AFAS) through allowing foreign service suppliers, and the ASEAN Comprehensive Investment Agreement (ACIA) through allowing employment of foreign corporate personnel to accompany FDI. The AEC Blueprint focuses on action to implement Mutual Recogni­ tion Arrangements (MRAs) for major professional services which, as discussed in the chapter, is highly inadequate to achieve the AEC objective of “free flow of skilled labour”. The AEC Scorecard Report on skilled labour for the 2008–11 period is extremely brief: To support greater mobility of qualified professionals in the region, the MRAs for engineers and architects have been implemented, while work is underway to effectively operationalize the other professional MRAs 108 Chia Siow Yue (nursing, medical, dental, accountancy and surveying). To facilitate the movement of persons engaged in trade and investment, the ASEAN Agreement on Movement of Natural Persons (MNP) has been drafted and is expected to be finalized in 2012. An example of the legal hurdles to implement MRAs is given by Tilleke & Gibbins (1 March 2012) in the case of Thailand. Thailand was the second last member (after Laos) to ratify the ASEAN Framework Agreement on MRA in May 2002, which came into effect in December 2002. But Thailand has yet to ratify any of the seven MRAs signed, and in engineering services, it came short of ratification by merely sending a “notification of participation” to the ASEAN Secretary­General. Thailand has to revamp its two major legal stumbling blocs: • The Foreign Business Act (FBA) restricts the participation of aliens in certain business activities according to three lists. List 1 principally contains agriculture and land­dealing activities. List 2 includes businesses related to national safety or security or involving art and culture, tradition, folk handicraft, or natural resources and environment. List 3 contains most services, including legal and accounting. Foreigners cannot engage in List 1 activities at all, while the activities under List 2 and List 3 may be pursued if the foreigner obtains an alien business license. Tilleke and Gibbins argue that a major overhaul of the FBA would cause delays in the implementation of Thailand’s AEC commitments. Alternatively, Thailand could expand the list of projects eligible for investment promotion by the Board of Investment (BOI), which is empowered to grant a wide range of incentives and guarantees to qualified investment projects. • The Alien Employment Act requires a work permit for all aliens working in Thailand. Only a few exceptions are granted, such as to members of diplomatic or consular delegations, the United Nations and other international agencies, as well as pursuant to certain treaties and authorization by the Council of Ministers. Tilleke and Gibbins argue that more exemptions should be enacted in order for Thailand to be able to commit to the various MRAs. It is obvious that recognition of qualifications is not enough to ensure market access in ASEAN. We need to also look at policies and regulatory frameworks affecting skilled labour mobility, and highlight the various Free Flow of Skilled Labour in ASEAN 109 policy and regulatory constraints and impediments.1 For comparison with the AEC, this chapter also includes a discussion of movement of natural persons provisions in General Agreement on Trade in Services (GATS) and selected regional and bilateral trade agreements. ii. Skilled labour Mobility and issue of brain drain and brain Gain Movement of Natural Persons in the GATS Barriers to cross­border skilled labour mobility or Movement of Natural Persons (MNP) in WTO language include: 1. Restrictive immigration visa requirements and employment passes and work permits, other administrative constraints and processing costs; 2. Quality assurance: pre­employment requirements, health and security clearance, personal and professional references; 3. Educational and professional qualifications and regulations and licensing requirements by receiving country professional associations; 4. National treatment limitations: qualifications and restrictions based on nationality; economic needs test; numerical quotas for each profession; ethnic and religious preferences; and language requirements; and 5. Measures to discourage and prevent brain drain. MNP under GATS Mode 4 refers to cross­border mobility of professionals and skilled individuals on a temporary basis either as self­employed individual service providers or as employees of foreign companies supplying services. MNPs cover: 1. Business visitors: engage in business without...