Reader Daniel Crosby points me to this article from the NY Times, which discusses a proposed U.S. law that takes the trade and immigration linkage in a new direction:
A Senate bill approved Thursday night by unanimous consent would pay for more security along the Mexico border by raising fees for companies from India that operate in the United States and hire so many Indian workers that they have been criticized for violating the spirit of American immigration law.
The $600 million spending bill would send 1,500 more Border Patrol agents, customs inspectors and other law enforcement officials to the Southwest border, finance additional aerial drones to monitor remote desert regions and build two operating bases close to the border to help reduce illegal immigration and drug smuggling.
...
Republicans had proposed paying for the beefed-up security by tapping into stimulus money. But Senator Charles E. Schumer, Democrat of New York, said his staff had come up with an alternative that would not hurt American workers: raising the visa application fees paid by any companies with more than 50 people in which more than half the work force has H-1B or L visas that are intended for skilled foreign workers.
Senate aides said four Indian companies would qualify for the significantly higher fees: Tata, Infosys, Wipro and Mahindra Satyam, all of which operate in the United States and are criticized as “body shops” because they provide outsourcing of Indian professionals to American companies. Large American high-tech corporations, which bring the bulk of the skilled immigrants into the United States, would not be affected since the vast majority of their work forces are made up of Americans.
Basically, there is a higher fee imposed for visa applications where the companies involved have a high percentage of workers who have special visas given to skilled foreign workers. That extra fee money would be used to help pay for border enforcement related to illegal immigration and drug smuggling.
It sounds like the law would not explicitly target India, so there is no de jure discrimination. But it's pretty clear there will be de facto discrimination against Indian companies. I'm not sure the Senate aides quoted meant the four Indian companies would be the only ones affected, but regardless, it seems likely there will be a disproportionate impact on India.
Of course, that's just "discrimination" in the general sense. Is there discrimination that would violate the GATS, either MFN (Article II) or National Treatment (Article XVII)? At first glance, it certainly sounds like there will be "less favorable treatment" for Indian companies, as there is an extra cost imposed on Indian service suppliers. But before there is a definitive conclusion on the GATS obligations, we would have to get into the scheduled U.S. National Treatment commitments and MFN exemptions. Off the top of my head, I'm not sure what's in there in relation to trading services through Mode 4; if any readers know, I'd love to hear about it.
I can't see how any exceptions would apply, so it's really just about what the obligations are. I suppose the U.S. could argue under GATS Article XIV(c) that this is necessary to secure compliance with GATS-consistent laws, but that seems like a stretch.
