Folly of cap on immigrant visas

America's annual dash to hire skilled foreign professionals is already over. It began, perhaps appropriately, on April Fool's Day and within a week the 65,000 quota was filled.

High-tech employers said their inability to get visas to import workers would force them to expand their operation overseas. Robert Hoffman, vice president of Oracle Corp., said the company last year sent jobs to Ireland and India when it couldn't get enough H1B visas and that the company has 1,000 openings for skilled jobs it can't fill locally.

Supporters of an immigration cap in Britain - the Conservatives, UKIP, MigrationWatch, and now the House of Lords economic select committee - try to bolster their position by referring to the fact that other advanced economies, notably the US, impose one.

Indeed, many do. And look at the consequences.

5 Myths about NAFTA

Sen. Hillary Rodham Clinton often likes to take credit for her husband's achievements as president. But then there's NAFTA. Clinton may have been present at the creation of the North American Free Trade Agreement in 1994, but she wants everybody to know that it's not her baby. She now proposes to "fix" the agreement to make trade "work for working families." Sen. Barack Obama, meanwhile, makes the fallout from NAFTA sound downright nuclear, lamenting that "entire cities . . . have been devastated as a consequence of trade agreements that were not adequately structured to make sure that U.S. workers had a fair deal." Despite the heightened rhetoric, he, too, wishes to "fix" the treaty, not nix it. Only the presumptive Republican nominee, Sen. John McCain, would leave NAFTA untouched; his priority is freeing up global trade.

The Democratic rivals have bought into most of the myths that have been peddled about the agreement and have placed their opposition to NAFTA at the center of their campaigns. Here's some information that could help them update their stump speeches.

1 NAFTA has transformed the U.S. economy.

Hardly. Critics rightly point out that NAFTA's economic benefits were oversold, but they're wrong to heap the blame for all America's woes on it. NAFTA, which expanded the existing Canadian-U.S. free-trade area to Mexico, has had only a marginal effect on the U.S. economy. Yes, exports to Mexico have more than tripled since 1993 -- but at $161 billion last year, they still account for only 1.1 percent of the economy. Considering that total U.S. exports have more than doubled over the same period, to more than $1.6 trillion a year, the boost from NAFTA is just a trifle.

Though imports from Mexico have risen nearly five-fold since 1993 -- potentially threatening some U.S. businesses -- they only amounted to $230 billion in 2007, or less than 1.7 percent of the $14 trillion U.S. economy. That's peanuts. And for all the fears of factories being shipped south on the back of an 18-wheeler, the total U.S. investment in Mexican factories and offices adds up to a mere $75 billion. Mexico received just $19 billion in foreign direct investment in 2006, while the United States attracted $175 billion. Thus, the "giant sucking sound" that Texas businessman and independent presidential candidate H. Ross Perot heard back in the 1990s doesn't sound so giant after all. But the benefits of NAFTA don't seem so remarkable, either.

2 NAFTA has put countless Americans out of work.

Not really. Obama claims that NAFTA has destroyed a million American jobs. Suppose he's right. Total employment still rose by 27 million jobs between 1993 and 2007, to 137.6 million, and the unemployment rate has fallen. At worst, then, NAFTA has cost only a tiny minority of American workers their jobs. And even that is a one-sided view. As Mexico opened its economy to U.S. trade and investment, NAFTA created new American jobs, too.

NAFTA critics also decry the trade deficit with Mexico, but at $70 billion a year, it accounts for only 0.5 percent of the U.S. economy. These figures should quiet NAFTA foes, who point to lost jobs and stagnant manufacturing wages, as well as boosters, who trumpet claims of rising output and record-high exports. The fact is, NAFTA has had only a fractional impact on these trends. Mexico's biggest impact on the U.S. labor market is not through trade, but through immigration. And the money that Mexican migrants send home contributes more to the Mexican economy than foreign direct investment does.

3 "Fixing" NAFTA would be easy and cost-free.

Not so. Any changes would require a lengthy and complex renegotiation with Canada and Mexico. As Canada's prime minister, Stephen Harper, has pointed out, "Of course, if any American government ever chose to make the mistake of opening [NAFTA], we would have some things we would want to talk about as well." Just the threat of pulling out of NAFTA would do some damage, too. Far from boosting America's international reputation -- something all presidential candidates agree is important -- it would fan fears that the United States is an unreliable ally and discourage foreign governments from committing to future agreements with Washington. The slim chance of concluding the World Trade Organization's Doha round of global trade talks would vanish. And if the next president wants, for instance, Mexico's help in dealing with immigration reform and Canada's hand in combating terrorism, then blaming America's friendly neighbors for its perceived woes is hardly the way to start.

4 Making NAFTA's labor and environmental regulations stricter would benefit U.S. workers.

Probably not. Clinton wants to make the treaty's labor and environmental provisions "far tougher and absolutely binding" and to require that all future trade agreements include similar language. The stated purpose is to raise labor and environmental standards around the world and to make it harder for companies to ship jobs to countries where workers have fewer protections than in the United States. But America's trading partners would probably see the move as covert protectionism -- since when have the Teamsters cared about Mexican wildlife? -- and may retaliate. Meanwhile, consumers would probably resent the increased cost of their imports.

In any case, tough social clauses could backfire on the United States. Canada's labor and environmental standards are generally higher than the United States', and Canadians could claim that lax American standards amount to unfair competition. Given that Canada and Mexico have joined global efforts to curb climate change, they might wish to restrict American imports if the United States continues to hold back. And Mexican workers arguably have stronger labor rights than Americans: Unlike the United States, Mexico has ratified most of the International Labor Organization's conventions on core labor standards, including those on freedom of association, collective bargaining and employment discrimination. If the United States bashes Mexican labor practices, what's to stop Mexico from objecting to American imports produced in non-unionized factories?

5 Renegotiating NAFTA should be a priority for the new president.

Absolutely not. With the housing market plunging, the financial system seizing up and the economy apparently shrinking, tinkering with a treaty that governs trade with two of Washington's trading partners is a costly distraction -- whatever your view of NAFTA. The next president will have much bigger things to worry about, such as stopping the economy from going into a tailspin; cushioning the blow for vulnerable Americans who lose their homes, their jobs and their health care in the downturn; and helping frame new regulations that protect the economy against future financial excesses without stifling the market. Compared to all that, changing NAFTA looks like small change.

Like it or hate it, NAFTA is not actually a big deal for the US...

Read my article in the Washington Post here.

Indians' contribution to the US

Indians account for 38% of doctors in the US, 36% of scientists at Nasa, and 34% of employees at Microsoft, 28% at IBM and 17% at Intel, Prospect reports, quoting The Times of India, 11/3/8.

Obamamania?

As a politics junkie, I find the US presidential race exciting - certainly better than Gordon Brown's ignominious coronation - but not particularly inspiring. I'm not wild about any of the candidates.

I find Hillary Clinton uninspiring: a robotic, machine candidate, with a nasty streak and an offputting sense of entitlement. That's a pity. Her policies are a mixed bag; I preferred Bill's.

I think Obama is a great speaker, but I'm not hugely enthusiastic about him either.

Being for "the future" "change" and "hope" is all very well, but tell me which candidate is in favour of "the past" "more of the same" and "despair".

There is something worryingly content-free about his message. Apart from his symbolic opposition to the Iraq war (which is more a consistency issue than a policy difference, since Clinton's current position on the war is not very different to his), there is not much to separate him from Hillary on policy. Instead, he is basically selling himself as him: "Vote for me because I represent change, I represent unity", rather than "Vote for me because this is how I want America to change, this is how I will somehow unite a deeply polarised country."

"Yes, we can" is a great slogan, but how exactly does Obama plan to heal the deep divide over immigration, for instance?

Of course, having a non-white president whose father was a Kenyan immigrant would be hugely symbolic, a credit to American society, and a powerful example of the benefits of immigration. But the most powerful person on earth is more than a symbol - and I would like to have a better idea of Obama's world view before he is granted such power. Symbolic figures are not necessarily good decision-makers.

I also find Obamamania disconcerting precisely because it is a mania: half-way between a Britney Spears concert and the Nuremberg rally. (In case anyone tries to draw silly conclusions, of course I am not comparing Obama to Hitler.)

On a separate point, the media cycle is becoming somewhat predictable: first Hillary is miles ahead, then Obama is catching up quickly, then Obama is going to beat Clinton convincingly. When the results come in, the reality that Obama's score-draw is a huge achievement given Clinton's entrenched advantages is reinterpreted as disappointment compared to the hype immediately before Super Tuesday itself.

If you discount the fact that expectations overshoot because of herd behaviour, Obama did remarkably well in neutralising what was designed to be Clinton's sweeping victory.

Gene Epstein of Barron's recommends both my books

I have to say a big thank you to Gene Epstein, economics editor of Barron's, who recommends both my books as gifts "that promote thought".

Speaking on Culture Shocks

I was a guest on Culture Shocks with Barry Lynn, a US talk radio show,  talking about immigration. Listen to it here.

Praised in the Huffington Post

Read Tim Berry's post here

Interviewed on the Freakonomics blog

Check it out here

Cato Institute lecture

I spoke at the Cato Institute in Washington, DC, last month about my book, with comments by Stuart Anderson of the National Foundation for American Policy. Watch it here.

Interviewed on TCS Daily

By Nick Schultz. Read it here

Interview on Leonard Lopate show

I was interviewed on WNYC radio by Leonard Lopate, a conversation that I very much enjoyed. Listen here.

Carnegie Council speech

The speech I gave at the Carnegie Council in New York focuses on the ethics of the immigration debate. Listen here.

US speaking events

I am currently in the US promoting the publication of Immigrants: Your Country Needs Them by Princeton University Press.

Tonight, 10 September, 530pm, I'm speaking at the Carnegie Council in New York. For more details, click here

On Wed 12 September, 12 noon, I'm speaking at the Cato Institute in Washington, DC. See here

On Thursday 13 September, 12 noon, I'm discussing what Europe and the US can learn from each other on immigration with Tamar Jacoby of the Manhattan Institute, at the German Marshall Fund of the US in Washington DC.

I'm also appearing on WNYC's Leonard Leopate Show on Tuesday 12 September at 120pm EST, and have just recorded an interview for Culture Shocks with Barry Lynn, which will be broadcast some time next week.

The Page 69 test

Immigrants features on the Page 69 test, a bookish site run by Marshal Zeringue. Check it out.

From illegal migrant worker to brain surgeon

As Stephen Dubner points out on the Freakonomics blog, there is a fascinating and moving article in the New England Journal of Medicine by  Alfredo Quiñones-Hinojosa, the director of the brain-tumour stem-cell laboratory at the Johns Hopkins School of Medicine.

In the article, “Terra Firma — A Journey from Migrant Farm Labor to Neurosurgery”, Quiñones-Hinojosa tells how he came to the US illegally from Mexico in the mid-1980s as a teenage migrant worker who didn’t speak English.

I spent long days in the fields picking fruits and vegetables, sleeping under leaky camper shells, eating anything I could get, with hands bloodied from pulling weeds — the very same hands that today perform brain surgery.

Through a long series of hard jobs, accidents, inspiration and mentorship, he wound up attending Berkeley and then Harvard Medical School.

From the fields of the San Joaquin Valley in California to the field of neurosurgery, it has been quite a journey. Today, as a neurosurgeon and researcher, I am taking part in the larger journey of medicine, both caring for patients and conducting clinical and translational research on brain cancer that I hope will lead to innovative ways of fighting devastating disease. And as a citizen of the United States, I am also participating in the great journey of this country. For immigrants like me, this voyage still means the pursuit of a better life — and the opportunity to give back to society.

Read the full article here.

Interviewed in Roll Call

Bryce Bauer interviewed me in Roll Call:

The immigration bill and the U.S.-Korea Free Trade Agreement: The latter was recently and unceremoniously agreed to by both countries and now is awaiting Congressional approval, while the former is a piece of legislation that drew ardent support and fervent hate before dissolving into one of the largest public policy blunders so far this Congressional session.

These are two very different paths for what many see as two very different issues. One is viewed as a cornerstone of the modern free market, the other an issue enveloped in a debate largely focusing on the principles of society and concerns about security. Traditional supporters of one traditionally oppose the other.

Yet in his new book, "Immigrants: Your Country Needs Them," British author Philippe Legrain argues they are essentially two aspects of the same issue: globalization. Immigration (or, as he prefers to look at it, migration) is to the free flow of labor what free trade is to the unfettered movement of goods and services.

"The economy doesn't stop at national borders," he noted.

Yet migration often does.

"I think the only way to square the circle is that people who believe in a free market also tend to be nationalistic," he said, while "it is a paradox [that] at the same time you see people who are generally suspicious of globalization" support immigration.

Legrain supports both.

"I used to be called a right-wing bastard," he said, referring to the time after he released his pro-globalization book "Open World: The Truth About Globalization" in 2004. "Now I get e-mails calling me a commie."

Legrain's book initially was released in Europe on Jan. 4 and will debut in the U.S. market on July 25.

And like Legrain, who was born in Britain to an Estonian-American mother, the book has a pan-oceanic focus. He discusses issues over migration that arise in both America and Europe, using examples and statistics (lots and lots of statistics). Furthermore, he not only explores the economics side of immigration but touches on the social aspects as well.

To balance out numbers and financial analysis, he narrates the debate with stories from the border - stories like that of Inmer Omar Rivera, whom Legrain refers to in the book as "a model of what many think an American should be."

Legrain documents the Honduras-born Rivera's effort to illegally enter into America, after leaving a steady job in his native country, across the U.S.-Mexican border to work to support his son.

The author also points to immigrant involvement in starting some of the country's most revered new technology companies, such as Sergey Brin (Russian) of Google and Andy Grove (Hungarian-American) of Intel.

Not only do these migrants spur innovation, he argues, but they also help foster new business links between their new and old countries.

Not all migrants, however, move with the aspirations of founding high-tech companies or developing the "next new thing"; many come with more pedestrian intentions such as filling vacancies in - as the phrase always goes - jobs Americans don't want to do themselves. These unskilled (although that phrase might not be entirely correct; Legrain noted there are foreign taxi drivers in Canada with medical degrees) immigrants are the ones who often draw the most ire, especially in Europe, where immigration programs tend to be more focused on skills than family ties.

Legrain cites many historic and modern statistic to support his argument that these immigrants help, not hurt, a nation's economy.

"If you think about it, the U.S. had an open border in the 19th century," he said. "And it was the time when the U.S. went from a provincial backwater to the most powerful nation on earth."

Furthermore, he said the recent addition of Eastern European countries to the European Union has allowed many workers from the former Soviet bloc unrestrained access to work in the rich Western ones (although some member countries have imposed limitations).

"It's a fantastic experiment, people say open borders don't work, and here is an example of how it does work," he said. "What you see is far from society collapsing, actually society and the economy are better off."

Legrain said one reason immigration doesn't decimate a country's economy is because immigrants don't come in droves - uprooting oneself and moving to a foreign country is, after all, a fairly drastic measure - nor are many aiming to become permanent citizens.

"The paradox of immigration controls is they force people who want to move temporarily to become permanent migrants," he said.

In the book, he chronicles the difficulties of illegally crossing many a nation's border, and he said that once a person has done so successfully it is too risky to return to his or her home country and then try to recross that border to work. He also argued the current system is responsible for the deaths of many migrants and, once they make it into a country, fosters a two-tier society.

"To the extent government permits it, there are going to be more and more people who are going to spend part of their life abroad" and part in their home country, he predicted.

However, as the recent Congressional debate over immigration shows, the prospect of open borders anytime soon is highly uncertain.

"In a globalizing world, to a certain extent, migration is inevitable," he said, but added later, "The damages of terrorism and the false association of it with immigration have certainly set things back."

But as the populations of rich Western countries age and demand for elderly care increases, Legrain said the electorate's views toward immigration could soften.

"As the baby boom generation starts to retire they are going to stop thinking 'Who is going to take my job?' [and switch] to 'Who is going to take care of me?'" he said. "If it suddenly becomes in their interest, it could change the debate."

Immigrants reviewed in The Freeman

Immigrants has been very favourably reviewed in The Freeman, the magazine of the Foundation for Economic Education. Thanks.

Bill Steigerwald in the Pittsburgh Tribune-Review

has positively reviewed Immigrants. Thanks

The Google case for immigration

It is common knowledge that Google was co-founded by Sergey Brin, who arrived in the US as a refugee from the Soviet Union aged six. Perhaps less well-known is how important a contribution other immigrants have made to the iconic company of the internet age.

Immigrants from countries like Canada, Iran, and Switzerland now lead our business operations, global marketing, global business development, and data infrastructure operations

said Romanian-born Laszlo Bock, Google's vice-president for people operations, in testimony to Congress, BusinessWeek reports.

Orkut Buyukkokten, a native of Turkey who received a PhD in computer science from Stanford University, joined Google as a software engineer on a temporary visa and later developed its social networking service, now known as Orkut.com.

Krishna Bharat, originally from India and who earned a PhD in human computer interaction from Georgia Tech, joined Google in 1999 on an H-1B visa and was instrumental in creating Google News, an aggregation service.

Google, the company that epitomises America's economic vitality in the 21st century, melds the world's best talent with the US economy's unique strengths.

Surely Congress doesn't want the next Google to be founded overseas?

US publication brought forward to 21 June

With the US immigration debate heating up as the Senate debates an ambitious immigration reform bill, Princeton University Press have brought forward the publication of Immigrants in the US to 21 June. :)

Better than nothing

The new U.S. immigration bill drafted by leading Democratic and Republican senators is a deeply political bargain that has been hammered out over months, and it shows: The result is a 380-page Frankenstein.

The bill aims to seal the nation’s leaky borders while enabling undocumented workers to regularize their status, and seeks to fill the low-skilled jobs that Americans no longer want to do by admitting migrant workers on a temporary basis. Permanent settlers would gain entry via a points system weighted toward applicants’ education and job skills rather than family ties.

The bill’s crafters have heralded it as a historic deal, a model of bipartisanship, a grand bargain that will bridge the United States’ immigration divide. But detractors of all ideological stripes, pitchforks and torches in hand, are waiting to tear this fragile compromise limb from awkwardly grafted limb.

Indeed, there is plenty to criticize. From the Maginot-like border fence to the bureaucrat-friendly points system, the senators have pulled together a grab bag of bad ideas. Still, as Sen. Dianne Feinstein urged in announcing the bill, it would be short sighted to allow the perfect to be the enemy of the (passably) good.

That’s because, for all the bill’s flaws, they pale in comparison to one thing: the proposal to allow the nation’s 12 million illegal residents to obtain legal status. It’s a victory for common sense that recognizes that these hard-working people, on whom Americans rely to pick fruit, clean dishes, and look after their children as well as their elderly parents, are here to stay, and that it is in everyone’s interests that they come out of the shadows and into mainstream life.

Now for the flaws, and they are many. The bill mandates that, before becoming legal residents, illegal immigrants must pay up to $5,000 in fines and fees and the head of the household must leave the country before applying to return. They may fear that they may not be able to get back to the United States if they do so. Returning home could prove particularly problematic for Chinese illegals, for instance, and the fine seems unduly punitive. The bill also recognizes that a continuing inflow of foreign workers is needed to fill low-skilled jobs, and proposes to offer 400,000 temporary-work visas a year to that end. But it requires that tighter border controls and more stringent workplace checks on employees’ identity and legal status be enforced before the regularization process and temporary-worker scheme can start. That could take years.

If the illegal immigrants are to be regularized, why prolong their agony? If the economy needs low-skilled foreign workers, why delay giving them visas? After all, if they can’t come legally, they will inevitably come illegally instead. (Even if you somehow believe that the new border controls—as many as 18,000 more border-patrol agents, 200 miles of vehicle barriers, and 370 miles of fencing along the 2,000-mile-long border with Mexico—will eventually succeed in stopping illegal migrant flows, they aren’t yet in place.) And since only those who arrived in the United States before 2007 will be entitled to regularize their status, any delay in setting up the temporary-worker scheme will create a new class of illegal migrants. Far better to issue the new temporary-work visas immediately. That would slash illegal immigration: Few foreigners would risk death, exploitation, or deportation if they could come and work in the United States legally instead.

The bill proposes that temporary workers be granted two-year visas that could be renewed twice provided migrants returned home in between. Those who didn’t leave when their visa expired would be permanently barred from reentering the United States. It seems unduly disruptive to require temporary workers to leave the United States between visa renewals, but given the opportunity to return to the United States legally, most would doubtless comply. But requiring them to leave for good after their visa has been renewed twice makes no sense. At that point, they would face the same dilemma that foreigners in the United States on a short-term visa do now: Overstay and work illegally, or lose the chance to ever work in the United States. Many would no doubt choose to remain illegally, creating a new shadow workforce a few years down the line. The proposed electronic ID checks in workplaces won’t prevent that: documents can be forged or stolen, and people can work illicitly. It would surely be better to allow foreign workers to keep renewing their visas indefinitely.

The proposed points system is also half-baked. This would grade prospective migrants according to a range of criteria, with most weight given to the perceived demand for their skills in the U.S. job market. Such points systems are in vogue: Canada and Australia employ one; Britain is introducing one; and other European countries are considering them. They appeal to conservatives who believe that highly skilled immigrants contribute more to the economy and make better citizens. And they reassure voters by fostering the illusion that the government is selecting the right people that the country needs.

But bureaucrats cannot possibly second-guess the requirements of millions of United States businesses, let alone how the fast-changing economy’s employment needs will evolve over time. In effect, the points system amounts to government officials picking winners—a notion that conservatives rightly criticize in industrial policy and elsewhere. Hayek must be turning in his grave.

Inevitably, workforce planners make costly mistakes. At the height of the dot-com boom, Australian officials scoured the world to attract IT specialists, many of whom ended up driving cabs when boom turned to bust. Indeed, Australia has pushed its selection system to such absurd lengths that bureaucrats have identified 986 separate occupations, 399 of which potentially qualify for a skilled-migrant visa.

Such absurdities wouldn’t happen in the United States of America, you say? Unfortunately, politicians tend to find the temptation to micromanage irresistible. Even before they had agreed on the new bill, senators were debating how many points should be awarded to a refrigerator mechanic with a certificate from a community college, according to the New York Times.

What’s more, a points system allows nothing for serendipity: that people end up contributing to society in unexpected ways. Who would have guessed, when he arrived from Taiwan as a child, that Jerry Yang would go on to cofound Yahoo!, or that a Kenyan student named Barack Obama who came to study in Hawaii would marry a Kansan woman and have a son who may become the next U.S. president?

Despite all of these failings, the bill is an improvement on the current mess, and perhaps the best that can be hoped for considering how hugely controversial immigration has become. It will be far easier to amend an imperfect law piece by piece than it would be to risk this fragile deal coming apart—dashing the hopes of 12 million hard-working people who want to become Americans. They are the reason why, all complaints aside, the U.S. public should give this Frankenstein a chance.

Better than nothing

From phantom security enhancements to a complicated points system that only a bureaucrat could love, the immigration compromise before the US Senate is worse than nearly every realistic alternative except one: more of the same.

Read my article on ForeignPolicy.com here

Breakthrough for US immigration reform?

The White House and leading US senators have agreed a deal that could pave the way towards a reform of the US immigration system. Details of the deal are available here.

On the plus side, the package provides a pathway for the 12 million illegal immigrants in the US to regularise their situation - but only if heads of household first return to their home country and only after paying fees and a $5,000 fine. Why insist on people going back first? That is no easy matter for immigrants from, for instance, China. It would also make sense if such a hefty fine could be paid back over time, though the tax system, for instance.

The proposed temporary-worker programme is also an improvement on existing rules, which make it almost impossible for low-skilled immigrants to come work in the US legally. But unfortunately, the workers will be extremely temporary: their work visas will only be valid for two years. Visas could be renewed twice, but only if workers return home for a year in between. It would be far better if the visas could be renewed repeatedly, without a year's break. Many "temporary" workers may be tempted to stay on illegally once their time is up - a situation that could be avoided if the visas could be renewed repeatedly.

On the minus side, the US appears to be going down the Australian route of a points-based immigration system focused on skills. That is a mistake, because the US does not just need workers with advanced degrees, it also needs low-skilled workers. What's more, government bureaucrats cannot possibly second-guess the needs of the millions of American businesses any more than they can pick winners in other domains of the economy. They are bound to make costly mistakes. And such an approach allows nothing for serendipity: that people end up contributing to society in unexpected ways.

The building of a high-tech border wall also sends a costly and unfortunate message that the United States, a country built by immigrants, now sees immigrants as a threat. Yet immigrants are not an invading army, they are hard-working and enterprising people moving in search of a better life - the essence of the American Dream.

Moreover, like the Maginot line that failed to protect France from the German army in World War II, America's border defences will inevitably be bypassed: people can be smuggled, visas overstayed, documents forged or stolen, officials bribed.

Of course, if the temporary-worker programme is large and wide-ranging enough, the pressure to migrate illegally will drop in any case - which is why it is rather odd that the temporary-worker programme will only be set up after the new border-security measures are in place. Such a delay may make political sense, but it makes little sense in practical terms.

All in all, the deal is a big step forward, but still falls far short of an ideal solution. It remains to be seen, of course, whether even this limited compromise can muster a majority in the Senate and after that the House of Representatives.

Immigrants will be available in the US from 16 July

The US edition of Immigrants is now available for pre-order on Amazon.com. It will be on sale from 16 July.

The US cover features recommendations from Tim Harford, FT columnist and author of The Undercover Economist, who says:

We expect crisp writing and careful analysis from Philippe Legrain. In Immigrants, he adds reporting from across the world and a passionate defense of our freedom to cross borders. By turns logical, daring, and compassionate, this is a terrific book.

and from Tyler Cowen, New York Times columnist, co-author of the Marginal Revolution blog and author of Discover Your Inner Economist (forthcoming) and other books, who says that Immigrants is:

The single best non-technical defense of a liberal immigration policy. What I liked most was how it put U.S. debates in a broader context; most American sources don't do this.... The book is original in this regard, yet without moving beyond easily understood arguments.

Human cargo

Australia's treatment of asylum seekers has long been shockingly inhumane. But prime minister John Howard's latest policy twist is truly despicable: he plans to "swap" would-be refugees held in the country's illegal offshore detention centres with Cuban and Haitian detainees the US is holding in Guantanamo Bay. People are to be treated as chattel, shipped off half-way across the world at the whim of a desperately unpopular politician who will seemingly go to any lengths to bolster his chances of re-election later this year. The first asylum seekers to be exchanged are likely to be the 83 Sri Lankans and eight Burmese held on the Pacific island of Nauru, according to the BBC.

Howard's rationale is simple: treat 'em mean and hope they'll be less keen to try to come to Australia in the first place. No matter that people fleeing persecution have already suffered enough in their home country; no matter that the UN's refugee convention, which the Australian government has signed up to, legally commits Australia (and other signatories) to give refuge to those fearing for their lives at home; deterring people who dare - how presumptuous of them! - to cross the world in search of a better life from heading Down Under is everything.

Each element of this policy is abhorrent. Even if one presumes, as Howard does, that some (or even most) of the people detained on Nauru do not have legitimate claims for asylum, how can it be right to treat them all - including those, such as torture victims, who are genuine refugees - inhumanely? Even people with disfiguring scars elicit scepticism rather than sympathy from hard-hearted immigration officials - after all, they reason, the wounds might be self-inflicted.

In truth, of course, one cannot neatly distinguish refugees from "economic migrants" - most people move for a variety of motives - any more than the Victorians could separate the "deserving" and "undeserving" poor. And in any case, given that there is no other legal route for most people from poor countries to go work in Australia, is pretending to be a refugee really such an ignoble crime that it warrants ever more elaborate mistreatment by the Australian government? Immigrants from Sri Lanka or Burma are not an invading army; they are mostly people seeking a better life for themselves and their family, just like the millions of Britons who have moved to Australia in recent decades.

One might have hoped that the opposition Labor Party would take Howard to task for this. Unfortunately not. Immigration spokesman Tony Burke's criticism was instead that the new policy would attract, rather than deter, boat people. "If you are in one of the refugee camps around the world, there is no more attractive destination than to think you can get a ticket to the USA," he said. "What John Howard is doing is saying to the people around the world: if you want to get to the US, the way to it is to hop on a boat and go to [Australia's] Christmas Island."

Perhaps feeding people to the sharks would be a more effective deterrent.

Not quite the deal of the century

The US's most significant "free-trade agreement" since NAFTA, the first with an Asian country, with "state-of-the-art" chapters and "unique" provisions - the embattled Bush administration was wheeling out the superlatives to describe the bilateral trade deal clinched with South Korea this morning.

It was a last-minute effort too, since it was agreed just in time for President Bush to give Congress the required 90-day notice of his intention to enter into a free-trade agreement before his fast-track authority expires.

The potential benefits - $20bn in extra trade - seem impressive, but free trade it certainly isn't.

Giving American carmakers privileged access to Korea's notoriously closed market is not the same thing as opening it up to global competition - a boon for Detroit, perhaps, less so for Korean drivers.

Nor will the deal do much to lower food prices, which is not surprising considering agriculture is the main blockage in the WTO's Doha Round.

And even this limited deal will face huge opposition in the US Congress, where Democrats with a protectionist bent hold sway, as well as in South Korea's National Assembly, which took three years to approve a trade deal with Chile. A huge breakthrough for free trade this certainly isn't.

US book deal signed

I'm delighted to say that I've signed a US book deal with Princeton University Press. I've been busy writing a special preface for the US edition of Immigrants, which will be out later this year. I can't wait.

US publication of Immigrants

I have received quite a few queries about when my new book will be published in the US. I'm delighted to say that I have just accepted an offer from a US publisher, and provided we can finalise a deal soon, Immigrants: Your Country Needs Them should be available for sale in the US this Fall. In the meantime, it can be ordered from Amazon.ca here. Thanks for all your interest.

A constructive US immigration bill next year?

One of the best things the new Democratic Congress could do is pass an immigration bill that tries to address the real issues head-on.

• America needs workers to do the jobs that the US-born can't or won't do: how and where is it going to get them?
• Twelve million people live within US borders illegally: since the land of the free cannot possibly deport all, or even most, of them, what is it going to do with them?

Hopeful signs are emerging that the new Congress might just be up to the challenge, as an exhaustive New York Times piece reports. Fingers crossed.

Nearly 1 in 2 US start-ups founded by immigrants

Intel, Yahoo, Google, eBay, Sun Microsystems - the rollcall of US technology giants founded by immigrant entrepreneurs is truly impressive. And they are not exceptional. According to "American Made: The Impact of Immigrant Entrepreneurs and Professionals on US Competitiveness", a new study by the
National Venture Capital Association, over the past 15 years immigrants have started one in four US public companies that were venture-backed, representing a market capitalisation of more than $500 billion. Among high-tech companies, the figure rises to an astonishing 40%. And nearly half (47%) of today’s private, venture-backed start-ups have immigrant founders.

But two-thirds of the immigrant founders surveyed believe that current US immigration policy hinders future foreign-born entrepreneurs from starting American companies.

Jerry Yang, the co-founder of Yahoo!, who came to the US from Taiwan at the age of ten, says:

Yahoo! would not be an American company today if the United States had not welcomed my family and me almost thirty years ago. We must do all that we can to ensure that the door is open for the next generation of top entrepreneurs, engineers and scientists from around the world to come to the US and thrive. Whether they arrive as children, students, or professionals, we want the best and the brightest here. Our immigration policy should reflect that or these talents will go elsewhere.

The US - and Europe - would do well to listen to him.

Not so lucky number 150

No sooner had Vietnam celebrated its success in becoming the WTO's 150th member than it suffered a setback in its trade relations with Washington: Congress voted against normalising trade relations between the two countries.

A procedural setback, insisted the Bush administration, which had tried to speed the bill through the outgoing Republican-led Congress - the measure mustered a majority, but not the two-thirds majority it needed to be expedited though.

A needless and embarrassing cockup, more like, not least because President Bush was imminently due in Hanoi for the APEC conference.

Thankfully, no lasting harm is likely. The measure is likely to be approved soon on a simple-majority vote. 

The sky war resumes

Here we go again. The US government has today launched yet another salvo in its long-running conflict with the EU over aircraft subsidies, announcing that it is to file a new complaint at the WTO against European subsidies for Airbus. Before you could say "Boeing", Brussels made clear that it would hit back with its own tit-for-tat complaint. So much for the fragile truce that had held since February.

Given how politicised the Airbus-Boeing war has become on both sides of the Atlantic, it is perhaps surprising that the Bush administration did not file a complaint before the mid-term elections, in time to swing come crucial votes to the Republicans. Perhaps, then, the new WTO complaint is a response to the mood of economic populism that the Democrats were so successful at tapping into.

In any case, it is yet another headache for the WTO: a no-win case that will aggravate both sides and resolve nothing. Most likely, the WTO will find fault with both the US and the EU - and then what?

It is surely too much to hope that America and Europe will stop subsidising their national champions simply because of a slap on the wrist from the WTO. The worry is that the war in the sky could broaden into a ground war too, with each side also taking aim, for instance, at their farm subsidies.

An opportunity for the Democrats on immigration and trade

The Democrats have scored a stunning victory in the midterm Congressional elections. It looks like they have captured control of not only the House of Representatives but also the Senate. Both President Bush and Nancy Pelosi, the incoming speaker of the House, have pledged to work together in a spirit of bipartisanship. Pigs might fly, you will say. But in two areas at least - immigration and trade - they would do well to agree on a common agenda that would benefit both of them, as well as America as a whole.

Two years ago, President Bush put forward proposals for immigration reform consisting of tougher border security and a new temporary-worker programme that would provide a legal route for foreigners to come do the jobs that Americans can't or won't do, as well as a path for the 12 million or so illegal immigrants in the US to regularise their situation. Unfortunately, while the outgoing Republican-led Congress agreed to the first part of Bush's package, his temporary-worker plan is still gathering dust. So the workers that America needs continue to have to risk death to get there, and then have to live in a shadow world of illegality, leaving them open to exploitation and undermining the rule of a law.

A Democratic-led Congress can - and should - do better. Not only because it is right for America, but because one of its core constituencies - Hispanic voters - is unsurprisingly keen on more liberal immigration rules. And if Congress can agree on a temporary-worker programme, President Bush is hardly in a position to veto it, since he has proposed one himself. Indeed, he would be doing Republicans a big service by trying to steer them away from their increasingly hardline anti-immigration stance, which doubtless cost them many Hispanic votes.

On immigration, then, the president would do well to reach out to the new Democratic majority. On trade, however, it is the Democrats who ought to reach out to the president. Forgetting Bill Clinton's success in pushing through the Uruguay Round of trade liberalisation and his wise plea to "make change your friend", they are in danger of painting themselves into a corner as the anti-globalisation party. Instead of trying to shape globalisation in the interests of all Americans, they increasingly seek to oppose its many manifestations: offshoring to India, cheap imports from China and so on. Yet the US is more than capable of crafting policies that allow it to reap all the benefits of globalisation while minimising its costs: driving forward the Doha Round at the WTO, for instance, while offering health insurance and job retraining for workers who lose their jobs because of economic change.

In practical terms, the Democrats should throw their weight behind a relaunch of the Doha Round and an extension, when it expires in June 2007, to President Bush's fast-track negotiating authority - a power that an incoming Democratic president would find handy in 2008. Fast-track would give US negotiators the mandate they need to clinch an ambitious Doha deal that reduces farm protectionism, boosts economic growth and helps the world's poor, while still leaving Congress the final say over whether to approve it.

Pie in the sky? Probably - but here's to hoping that Democrats follow the advice of the boy from Hope.

US gambling ban is illegal

Online gambling is immoral and illegal - except when it takes place within US states, of course; oh, and interstate betting on horse races is also OK. That is the essence of the US's new Unlawful Gambling Enforcement Act, as clear-cut a case of protectionism as there is.

The EU ought to challenge the new law at the WTO, on behalf of 888.com, partygaming.com, sportingbet.com and all the other online gambling companies that have been dealt a hammer blow by Congress's unfair law.

For sure, WTO rules allow countries to restrict trade for reasons of morality - but only if the restrictions apply equally to all. So if US legislators deem gambling to be wicked and sinful, they are entitled to ban it - but they cannot simply block Americans from betting on non-US websites.

Congress's new law is hypocritical, protectionist - and illegal.

A pointless wall

Immigrants beware: George Bush this week gave the go-ahead for a high-tech wall along 700 miles of the US border with Mexico, at a cost of $1.2 billion. Worse, he has for now dropped the sensible part of his immigration plan - a temporary-worker programme that would provide a legal pathway for foreigners to come do the jobs that Americans can't or won't do, and allow illegal immigrants to emerge from their shadow world of lawless exploitation and regularise their situation.

So will Bush's border wall keep Mexicans out? Of course not.

Migrants resting at a Tijuana shelter after being deported from the US told Associated Press that more walls wouldn't deter them. Alfonso Martinez, a 32-year-old from southern Mexico, who had been working as a farmhand for six months in Vista, Calif., when he was arrested and deported last week, said

Wall or no wall, I will try at least three times. I have three girls that I have to support, and in Mexico there is no work.

The only thing the new wall will do is force migrants to resort to ever more desperate and dangerous measures to get across the border.

In short: more deaths, more suffering, but no end to immigration.

A transatlantic FTA?

Germany's Chancellor, Angela Markel, is making noises about reviving the well-worn idea of a transatlantic free-trade area (FTA), and Susan Schwab, America's top trade negotiator, has welcomed the idea too. So might the proposal finally get off the ground?

Unlikely. Remember that the European Commission negotiates trade deals on behalf of Germany and the other 24 EU member states, and there is still plenty of bad blood between Brussels and Washington over the collapse of the Doha Round, which the Commission blames on the US. And their main bone of contention - agriculture - is precisely what scuppered previous efforts to create a transatlantic FTA.

Merkel knows all this. Her real aim is probably to strengthen her increasingly embattled domestic position by being seen to take the initiative internationally. And it will certainly do her no harm in Washington, with which she has striven to patch up relations after their near-breakdown under her predecessor, Gerhard Schroder.

The foaming mouth of fear and loathing

Perennial presidential failure Pat Buchanan has written yet another polemic warning of the apocalyptic consequences to the US of immigration. According to a leaked excerpt of State of Emergency: Third World Invasion and Conquest of America on the Drudge Report, his new book begins thus:

The children born in 2006 will witness in their lifetimes the death of the West. One in every twelve people breaking into America has a criminal record. By 2050, there will be 100 million Hispanics concentrated in the US Southwest.

Mad Pat accuses the Mexican government of the Aztlan Plot, a deliberate campaign to use America as a dumping ground for its poor and unemployed, both to relieve social pressure and effect a cultural reannexation of the American Southwest.

In his final chapter, “Last Chance”, he lays out a national plan to deal with the State of Emergency before it makes an end of America: deporting illegal immigrants; a ten-year moratorium on legal immigration at 150,000 to 250,000 a year; and a $10-billion, 2,000-mile double-line security fence between the United States and Mexico.

Millions of deportees? Better order the cattle cars now. Buchanan's Last Chance solution would turn America into a police state. Perhaps that's what fascists like him secretly want. As for his double-line security fence, they had one like that running through Berlin - and a shoot-to-kill policy to boot - and still people crossed. Thank goodness immigrants are brave enough to risk their lives to come to America to do the jobs US-born people can't or won't do.

The quiet voice of truth

If you deploy the National Guard, they'll slip around them. If you build a 60-metres-high wall, they'll find a 61-metres-high ladder

Father Prisciliano Peraza Garcia, who runs a migrant shelter in Altar, on Mexico's border with US, told Newsday.

Hunger is stronger than fear.

Sick and twisted

Some opponents of immigration are so utterly shameless that they will use any sick and twisted nonsense to further their cause.

The Wall Street Journal reports that:

The London terror plot is already having an impact on Congress's contentious effort to overhaul the nation's immigration system, with House Republicans saying it strengthens their call for beefing up border security before permitting any increases in legal immigration

Rep. Curt Weldon, the Republican vice chairman of the House Homeland Security Committee said:

It's just going to reinforce the House position, which is that we have to first of all shut down the borders and get control of the problem of illegal immigration.

Right: so a foiled plot by British Muslims to blow up planes destined for the US underscores the need for America to build a wall along its southern border to keep out Catholic Mexican immigrants.

Impeccable logic.

America alone is not to blame for Doha collapse

The world's trade negotiators cannot seem to agree on much these days, but on one thing there is near-unanimity: the United States is responsible for the collapse of the WTO's Doha Round.

Peter Mandelson, the EU's trade commissioner, told the FT:

“If the US continues to demand dollar-for-dollar compensation in market access [cutting agricultural tariffs] for reducing domestic support, no one in the developing world will ever buy that and the EU will not either.”

Kamal Nath, India's fork-tongued commerce minister, said of the US:

“Everybody put something on the table except one country who said ‘we can’t see anything on the table’.”

This is nonsense. Whenever negotiations fail, all sides must take some of the blame. And the US, for good reasons and bad, is guilty mainly of being too ambitious to free up world trade - which is meant to be what the WTO is about.

For sure, America's agricultural subsidies are harmful and wasteful, but the US was prepared to slash them if other countries were willing to lower their farm tariffs, thereby giving its farmers access to new export markets. Multilateral trade negotiations are never pretty, but they have the potential to harness exporters' interests to overcome the lobbying power of producers that fear foreign competition.

But the likes of Nath were not interested in a meaningful Doha agreement; they just wanted to entrench India's farm and manufacturing protectionism, which hobbles the country rather than helping it. India's new-found success, after all, is in the IT sector, which the government has not yet got round to "protect".   

The flexibility that the EU and India wanted the US to show was a willingness to settle for the status quo rather than pursue the benefits of freer trade. The main culprits for Doha's failure are those who refused to budge on freeing trade, not those who set their aim too high. We may all come to pay the price for their cowardice.

The perils of boldness

President Bush rarely intervenes directly in the WTO debate. So it is a sign of how the White House is ratcheting up the pressure for an ambitious Doha Round deal that he talked about it at some length in a speech this week:

Now we're confronted with a really good opportunity, by the way, to deal with global poverty, and that is to complete the Doha Round of the WTO negotiations.  And it's tough sledding right now... The Doha negotiations are at a critical moment.  It is -- in my view, countries in Europe have to make a tough decision on farming.  And the G20 countries have to make a tough decision on manufacturing.  And the United States is prepared to make a tough decision along with them. That's my message to the world.

It's great that the most powerful man on earth appears committed to freeing up world trade - and multilaterally, to boot.  His intervention does indeed come at a  'critical' moment: as I discussed in a recent post, time is running out for the Doha Round. And since the deadline is of the US's making - the expiry of fast-track authority next year - it is particularly fitting that America should be seeking to break the deadlock.

But ironically, America's insistence on an ambitious deal could be preventing agreement on a more modest package. As a top aide to India's commerce minister, Kamil Nath, told Reuters:

The rest of the world could reach an agreement on a modestly ambitious outcome. The real problem is going to be the United States.

But a modest deal may be unsellable in Congress: unless Doha opens up new markets for US exporters (including farmers), it will be nigh on impossible to win support for cuts in farm subsidies.

While no deal might appear preferable to a modest one, the failure of the Doha Round could have devastating consequences:  a potentially fatal weakening of the WTO, and with it efforts to regulate world trade multilaterally and settle disputes fairly; a multiplication of iniquitous and inefficient preferential trade agreements, which harm poor and weak countries and gum up world trade; an upsurge in protectionism - and a question mark over globalisation itself.

Should the US act against China for violating workers' rights?

The AFL-CIO, America's biggest trade-union federation, is petitioning the Bush administration to impose economic sanctions against China for violations of workers' rights. The unions claim that the exploitation of Chinese workers is not only morally repugnant, but also economically damaging, alleging that it has cost 1.2 million US workers their jobs. They say this amounts to an unfair trade practice to which the US should respond with trade sanctions against China. But their proposed solution is as wrong-headed as their analysis of the problem.

Issue one: Are Chinese workers exploited? No doubt many are - not because they are paid a pittance by Western standards, nor because labour standards in China are lower, but because human-rights violations in China are commonplace. Even so, factory wages are rising fast and Chinese workers are generally richer and freer than five, ten or twenty years ago.

Issue two: Would imposing trade sanctions help Chinese workers? Clearly not. China is too big to be bullied into improving its respect for human rights, but curbing Chinese exports to the US would surely harm the workers who produce them.

Issue three: Is there anything else Americans could do to help Chinese workers? Apart from buying Chinese products, which raises Chinese living standards, not much. The US government can put political pressure on China over human rights, as can groups such as Amnesty International, but this has only a limited impact. Ultimately, in a huge country like China, pressure for reform mostly has to come from within. This may take decades, but there is every reason to believe that as the Chinese get richer they will demand to be freer too - and that the Communist Party will eventually have to succumb to their demands.

Issue four: What about American jobs? The US unemployment rate is a mere 4.6%, so jobs are hardly disappearing because of trade with China. New jobs replace the ones that are lost. The transition from old jobs to new can be traumatic in the US, because it lacks an adequate social safety net - but that is a reason for the government to cushion the blow of adjusting and help workers retrain and find new jobs, not limit international trade. After all, Americans gain a lot from trade with China: cheaper imports, lower interest rates and higher economic growth. The AFL-CIO should be campaigning for more active labour-market policies domestically, not damaging trade sanctions that would harm those they purport to help.

Bush's border muddle

President Bush is trying to have it both ways in America's great immigration debate. To placate anti-immigration conservatives, he plans to send 6,000 National Guard troops to patrol the Mexican border temporarily while the civilian Border Patrol recruits 6,000 new staff. To keep pro-immigration businesspeople on side, he proposes a temporary guest-worker programme that would allow illegal immigrants in the US to regularise their situation and provide a legal channel for foreigners to come work in the US in future. His political calculation appears to be that if he can reassure ordinary Americans that their borders are secure, most will be amenable to having large numbers of immigrants doing the jobs that Americans can't do or won't do. More likely, his mixed message will leave everyone confused and end up satisfying nobody.

Beefing up security on the Mexican border is mostly a symbolic gesture. Border Patrol numbers have been rising inexorably for twenty years, with scarcely a dent in the number of immigrants who make it past them. Where people are desperate they will find a way: East Germany used to shoot fugitives trying to escape across the Berlin Wall, but people still took their chances and made it across. Bush cannot satisfy the demands of those who want the Mexican border sealed. But even though clamping down on illegal immigrants will not make a dent in the numbers crossing, it will add to the hardship and suffering of the foreign workers on which the US depends and reinforce the message of social conservatives that immigrants are a threat to America's way of life.

The notion that immigrants are a threat to America jars with Bush's laudable (albeit imperfect) plans for a temporary-worker programme. The idea behind the scheme is to match American employers who can't find the workers they need domestically with willing and able foreign workers, to the benefit of the US economy as a whole. At least initially, the estimated 12 million or so illegal immigrants in the US would also be able to apply for legal work, allowing them to escape from their lawless underworld. In that very real sense, then, Bush's scheme would bolster the rule of law as well as boosting the US economy. But by playing to fears that a Mexican invasion threatens America, Bush's border measures undermine support for his worker scheme: if foreign workers are good for America, why is he trying to keep them out?; and if they aren't, why is he making it easier for more to come and those already in the US to stay?

Miami is where it's at

Mr Clash of Civilisations, Samuel Huntington, is not just terrified by the Muslim menace to America, he also feels threatened by what he sees as the enemy within: Hispanic Americans. God help America, he warns, if Spanish-speaking immigrants continue to flock there: out will go the Anglo-Protestant virtues that make it great, in will come the Latinos' different - read "inferior" - ways. Yet visit Miami, as I am doing to speak at the Poder Forum on immigration, and you will see that the most Latino city in the mainland US is hardly the cesspit of Huntington's nightmares. It is a thriving all-American success story.

Miami was once a quiet retirement town. Now, thanks to immigrants from Cuba and elsewhere, it is the business capital of Latin America and a major destination for international tourists. But Huntington worries that Miami is so Latino-dominated than it is no longer American at all. Spanish, he says, is driving out English. He quotes a Cuban-born sociologist who says that “In Miami there is no pressure to be American. People can make a livi