India in the WTO

The latest issue of the Journal of World Trade has an India-related article on an unusual topic. It examines the use of poor Indian women as surrogate mothers by rich Americans from a GATS perspective. The abstract is below. Haven’t read the paper yet but do plan to do so, and will comment on it here. My instinctive and non-academic preliminary response was some discomfort with the treatment of this issue from a trade law perspective. Wouldn’t a human rights or health framework be more appropriate for regulation in this area both in the US (the so-called service consumer) as well as in India (the so-called service-provider). Is gestational surrogacy a GATS “service”?

Here is the abstract:

Christina Stephenson, ‘Reproductive Outsourcing to India: WTO Obligations in the Absence of US National Legislation’ (2009) 43 Journal of World Trade pp. 189-208

Summary:

This article examines the World Trade Organization (WTO) obligations that inhere from US persons or couples contracting with Indian women for gestational surrogacy. Surrogacy contracts are considered in the context of the General Agreement on Tariffs and Trade (GATT) and the differing laws on surrogacy of different US states. By exploring WTO Appellate Body (AB), Panel and GATT Panel decisions, this article endeavors to determine what WTO obligations bind the US in circumstance of cross–border surrogacy contract. This article addresses how the varying state laws on surrogacy affect the WTO obligations of the US in market access, national treatment and most–favoured–nation (MFN) treatment. The article concludes that there are a variety of ways in which the different state laws have the capacity to violate US trade commitments in relation to international surrogacy contracts. In addition, the analysis serves to illuminate the process under which US trade obligations can be scrutinized to determine what commitments are relevant to a service not contemplated in the US Schedule.

Update:

Am still to read this article for the WTO angle, but a recent Indian Supreme Court decision seems to throw a child’s rights mantle over surrogacy at least in Indian domestic law.

Last year, a child was born to an Indian surrogate mother from Japanese parents. The Japanese couple separated and when the child was born, neither parent was in India except of course the natural birth mother.

A public interest habeas corpus petition was filed in the Rajasthan High Court. Eventually, the matter reached the Supreme Court when the Japanese grandmother filed a petition. The Supreme Court gave its decision on 29 September 2008. The decision is available at http://judis.nic.in/supremecourt/helddis.aspx

The Court in effect allowed the baby to leave India with the Japanese grandmother. It did this by stating that any concerns relating to the rights of the baby should be raised before the commission constituted under the Commissions for Protection of Child Rights Act, 2005, and noted that no complaint had been made before this Commission. The Supreme Court also went on to state that the surrogacy procedure "is legal in several countries including in India where due to excellent medical infrastructure, high international demand and ready availability of poor surrogates it is reaching industry proportions".

I find this Supreme Court decision very unsatisfactory. The Court was keen to let the baby leave India (which I don’t have an issue with), but it seems to have laid down the law here (that surrogacy is legal) in the absence of legislation and while a bill was pending before Parliament on the same issue. (See the Assisted Reproductive Technology (Regulation) Bill 2008.)

The Court also abdicated its constitutional responsibility to protect fundamental rights of a child by suggesting that the appropriate forum was the Commission under the Commissions for Protection of Child Rights Act, 2005.

Well, this whole surrogacy issue raises questions of citizenship, which mother’s name will go on the birth certificate under Indian law, immigration, reproductive rights, and child rights. Not too sure of the trade angle.

This Economic Times story reflects Indian industry and policymakers sensitivity on the issue of any protectionist clamp-down on outsourcing. Though I think the Economic Times jumped the gun here a bit. Its too early to be talking about WTO contests especially since the whole story seems to be based upon this sentence in President Obama’s speech to Congress:

We will root out the waste, fraud, and abuse in our Medicare program that doesn’t make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas. 

The news report captioned “India may contest Obama’s move against outsourcing in WTO” seems to be based upon Minister Kamal Nath’s response on being asked whether India would respond to the suggestion in Obama’s speech. This is what Nath is reported to have answered:

We have to ensure what they (US) are doing is WTO compatible when we are talking about trade, movement of goods, movement of people and movement of services," Commerce and Industry Minister Kamal Nath said here.
"Yes, of course," he said when asked if India will take up the issue of outsourcing with the US administration.
…

Nath said, "One has to see how the US companies using India as a base for technological development respond to their own government." Outsourcing of technology development by large companies cannot be switched on and off, he added.

It should be interesting to see what shape the US measure on discouraging outsourcing takes. A PTI story has more:

Nearly 1,000 US firms, which have shipped their jobs overseas are anticipated to be affected with the proposed elimination of tax incentives. The plan mainly refers to one of the provisions in the tax code that allows companies to pay lesser taxes for profits earned from foreign shores.

Here’s another interesting aspect linking the outsourcing issue with H-1B visas. A Computerworld story discusses this:

The U.S. government’s H-1B visa usage data for fiscal 2008 shows that offshore outsourcing firms based in India are employing a growing number of H-1B workers — a hiring trend that is affecting the IT workforces in communities such as Oldsmar, Fla.

Oldsmar is the home of a technology center operated by The Nielsen Co., which measures TV audiences, consumer trends and other metrics for its clients. Nielsen last year began laying off workers at the facility after announcing in October 2007 a 10-year global outsourcing agreement valued at $1.2 billion with Tata Consultancy Services Ltd.

And while Nielsen cut employees, Mumbai, India-based Tata was increasing its hiring of H-1B workers. Tata received approval for a total of 1,539 H-1B visas during the federal fiscal year that ended last September, according to government data released this week. That was nearly double the 797 visas that the outsourcing and IT services vendor received in fiscal 2007