Foreign Professionals in the United States : Regulatory Impediments to Trade

Changes in demographics and patterns of investment in human capital are creating increased scope for international trade in professional services. India, one of the largest exporters of skilled services, and the United States, one of the largest importers of skilled services, are two countries that mirror these broader global trends. The scope for mutually beneficial trade is today inhibited not only by quotas and discriminatory taxation, but also by a number of domestic regulatory requirements--including qualification and licensing requirements. To illustrate the nature and implications of these regulatory impediments, this article focuses on the regulatory requirements that Indian professionals face in the US market. It explores the consequences of regulatory discrimination and the economic cost of regulations, and presents some illustrative estimates. The article concludes by examining how the trade-inhibiting impact of regulatory requirements could be addressed through bilateral and multilateral negotiations.