the pending TISA promises the globalizing service employment. that way businesses and workers from all around the world could operate on a “level playing field” - large segments of the public sector will be disinvested and put up for public bidding in a global procurement system. Low bidding corporations would have rights to the contracts and to move workers between countries at will.
Wage parity likely would not be a prerequisite at first, and as wages fell they would gradually equalize.
There are two countries, Home and Foreign. The total quantity of labour in the two countries is shown by the distance OhOf.
Before a fully free migration is allowed the distribution of labor is OhL in Home and OfL in
Foreign. The marginal product of labour is higher in Home than in foreign because the
capital/labor ratio is higher in Home. This is shown in the figure by the higher position of the
MPLh curve compared to the MPLf curve. Because of this the wage is higher in Home, at Wh
compared with the wage in Foreign at Wf. In short: Home symbolizes a developed country with
high automatization and high wages and Foreign a less developed country with abundant supply
of labour, low automatization and low wages. If migration is fully free between the two
countries and the workers are identical workers will migrate from Foreign to Home in pursuit of
higher wages. The migration will finally result in an equalized capital/labor ratio in the two
countries and thus equal marginal products of labor and equal wages, illustrated in the figure by
the wage level W’ which could be seen as the world market price of labor as the world only
consists of the two countries Home and Foreign. The migration is illustrated in the figure by the
distance LL’ which is the amount of workers that will move from Foreign to Home so that the
new distribution of labour becomes OhL’ in Home and L’Of in Foreign.
Wages will thus decrease in Home and increase in Foreign resulting in a loss for the indigenous
workers in Home illustrated in the figure by the area a but a gain for the capital owners of the
areas a+b. In Foreign the workers get an increased income of areas c+d+e while the capital owners lose areas d+e. The result in total is a net gain for the two countries by areas b+c which
is a gain resulting from higher efficiency in the use of the total resources of the two countries.
What can be traded to maximize comparative advantage and profits?
Presumably the millions of newly privatized jobs in healthcare, education, former government and quasi government entities (everything that could not pass the tests such as the two part test in GATS Article 1:3) See [http://www.ciel.org/Publications/PublicServicesScope.pdf
Jobs in developed countries with a high perceived value would represent a large chunk of new leverage in trade negotiations for developed countries…
They (Mode Four) can be traded for Mode Three (national treatment and most favored nation status)
the big question is is it worth trading the bird in the hand (jobs of millions of your own citizens on the eve of a period of automation and a radically different future where education becomes all important and the difference between survival and not.
Work would find its true value, based on education and ability to excel in some area, and not on national borders. As wages fell they would all become the same presumably before those jobs become automatable.
How long would the growth last with automation not far behind the level in the developed countries in some developing countries (China)
One issue is that politicians and economists consistently greatly underestimate the (exponentially increasing) rate of technological growth because they have less experience with it. See [http://www.kurzweilai.net/the-law-of-accelerating-returns
its important for people to realize that national executives likely could not and legislators likely would prefer not to preside over the elimination of long fought for 20th century laws, policies, licenses, visa requirements, etc deemed to be barriers to market entry.
A case may be brought in a arbitral trade body, and those international trade bodies typically rule that something is a market entry barrier (or violates a standstill clause in the case of a rise in a minimum wage) and then its countries choice whether they want to pay the penalties or comply.