WASHINGTON: The US law slapping a hefty visa fee hike on Indian companies may be in violation of the WTO's General Agreement on Trade in Services, according to a legal analysis. The US law slapping a hefty visa fee hike on Indian companies may be in violation of the World Trade Organisation's General Agreement on Trade in Services (GATS), according to a legal analysis conducted by the National Foundation for American Policy, a Virginia based think tank.

The controversial legislation enacted last August selectively jacked up the fees paid by Indian and other foreign companies with more than 50 per cent of employees in their US operations on H-1B or L-1 visas, while exempting American firms bringing skilled foreign workers under these very visas.

The foundation's report argues that the legislation's intent in raising the fees by $2,000 per H-1B visa and $2,250 per L-1 visa was to restrict the availability of these visas, so it might violate the US's commitment under GATS to allow temporary admission of specialty workers under these nonimmigrant visas.

"This commitment generally reflects US law as it existed in 1994 when the GATS and other World Trade Organization (WTO) agreements were finalised. Because the US is bound by this commitment under GATS, it may not adopt now or maintain measures that would conflict with that commitment, or nullify the benefits accruing to WTO members under the commitment," says the report, authored by Stephen Claeys, a former US Deputy Assistant Secretary of Commerce.

Although New Delhi reacted strongly after the US enacted the legislation and hinted that it may take the matter to the WTO, it refrained from resorting to that course and instead opted for negotiations with Washington that have not led it anywhere so far.

On the contrary, the visa fee hike on the Indian IT companies that was to lapse in September 2014 has recently been extended by one more year under another legislation for health care and relief for 9/11 survivors and rescue workers.

The foundation's report notes that the steep fee hike and its limitation to certain companies impeding supply of services in a particular sector in the US could set the stage for retaliatory actions from other WTO member-countries.

If the additional fees are found to violate the commitments made under GATS, the US must be prepared to either compensate other WTO members to the extent that their benefits under the GATS are diminished, or face retaliation from those members to that same extent, says the report.

"Retaliation could be in the form of other WTO members limiting US service companies' access to those countries' markets, increased duties on US goods, or other actions," it notes.

08 Jan 2011 04:04:01 AM IST

By S Rajagopalan

Source: expressbuzz.com

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