Why EU ‘trade’ means a war on workers

Linda Kaucher

Presentation for Institute for Employment Rights conference ‘Developments in European Employment Law’

Wed March 21st 2012 London

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3 interlinked global trajectories – • Corporate takeover

- corporations concentrating, overtaking + commandeering the power of states, via size, international trade agreements

• Corporations acquiring rights to access government spending (public procurement)

- via complicit governments, international trade agreements

• Globalised commodification of labour (only ‘cheap’ counts) - corporate profiteering from cross-

border wage differential via intern’l trade agreements

n.b. Role: City of London Corporation, ‘thecityUK’2

EU’s external trade function• Trade Commission (D.G.Trade) - heavyweight part of Commission (international)

- invariably ignored in EU debate

• Fixes EU neoliberalism in international trade agreements subject to international trade law

• Implications for workers – allows cheap labour from rest of world as ‘trade’

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2 ways to capitalise on wage differential

1) Move work to cheaper labour areas

2) Move cheaper labour into higher paid areas

Focus here on 24

The EU trade agreement landscape:

• EU Trade Commission negotiates on trade on behalf of MSs

• WTO multilateral Doha Round stalled • Since 2005, EU pursuing bilateral and

regional trade agreements (much more secretive)

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What is ‘trade’?Not just ‘trade-in-goods(agricultural, manufactured)

- although this focus is maintained

Also trade-in-services - 12 all-encompassing service categories (including ‘Other’)

- ‘Business Services’ category includes

banking, investment, financial services

- Trade-in-services also includes moving workers across borders.

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How trade-in-services includes moving workers across borders:

4 ‘modes’ of service delivery cross-cut categories:

- Mode 1 - e.g. by internet

- Mode 2 - consumer crosses border e.g. tourism, foreign students

- Mode 3 - company establishes across border

- Mode 4 - workers moved across borders7

‘Liberalisation’ - key conceptLiberalising trade-in-goods

= reducing at-the-border tariffs (& subsidies)

Liberalising trade-in-services = opening investment ops to transnational corporations and granting them rights, including rights to bring in workers

Can be - unilateral - international trade commitments

UK - unilaterally liberalised, as well as big mover in trade deals - behest of City of London Corp 8

EU/India Free Trade Agreement• Neg’d since 2007 - trying for completion this year

• Mode 4 access – Indian govt’s single demand

• Is mostly a UK/India FTA (‘85%’)

• UK will take biggest part of Mode 4 commitment – but commitment is not a ‘limit’ or ‘cap’

• Relevant UK PBS category- ‘international agreements’ Tier 5 - no numerical limits

• Very big issues for Indian people re liberalisation demands on India - protests 9

How UK govt is accommodating current Mode 4 commitments (ICTs)

• Supposedly ‘senior managers’ & ‘specialists’ – abuse allowed by UK govt

• Now substantial part of UK labour migration (but not ‘migration’) • In ratio to population, UK - 2 X US, 10X Germany, dble Australia, dble

Canada

• A discrete Tier 2 PBS category with no numerical limits (i.e. no ‘cap’!)

• Most coming for less than a year - lower wage requirement

• Can be paid TMW – made up with tax free ‘allowances’. No NI.

• ICTs, but most being supplied into other firms10

Current Indian Mode 4 demands Not ICTs (already commitment on these)

but

Contractual Service Suppliers (CSS)- workers sent/brought into any sector by

Indian companies NOT established here Independent Professionals (IP)

n.b. wide spectrum of employment circumstance. What does it mean here? 11

TUC - inaction or betrayal?• September 2011 Congress resolution to

publicise and oppose the EU/India Free Trade Agreement. Why hasn’t the TUC acted?

• Worse - quiet meetings with the Trade Commission fixing up an unworkable ‘safeguard clause’, involvement of ETUC.

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Policy continuum on labour move’t-Internal EU / EU external trade-

EU move’t lab & services<->Mode 4 in trade ag’ts

Both - allow undercutting of workers in host country by workers brought/sent in

- have EU and UK govt support - subject to government propaganda

- subject to false projections before the tie-in - ‘can’t change’ once fixed

Difference - Mode 4 workers potentially from cheaper labour countries - Mode 4 trade concessions more secretive - Mode 4 is international – harder to reverse 13

Other EU trade agreementsIn process •Canada•Singapore •Eastern Europe states•Central America•AndesEarlier stage•Southern Mediterranean (Morocco to Israel/Palestine)•China (investment agreement) •US•EPA with West Africa•EPA with Pacific (PNG, Fiji)

All include Mode 4 offers 14

Global employment situation

• Unemployment - a global crisis

• Wide open for labour exploitation

• Legalised means set up Internal EU rules + ECJ decisions / international trade law

Yet debate usually limited to national horizon

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EU ‘4 freedoms’ goods, services, finance, labour,

Of concern for workers: -Free movement of labour - workers come

individually facilitated by agencies, EU financial supported including ‘research’ funding - Free movement of services – firms bring in

own workers for contracts

Not just Eastern Europe accession countries Also - high unemployment states Also - de-facto accession of 6 more low-income countries, disguised as ‘trade agreements’ - no attention, debate

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Across whole skills spectrum

• EU labour migration - usually taken as ‘unskilled’ (though free movement of services - bring in own skilled labour)

• EU stipulates ‘skilled’ or ‘highly skilled’ for Mode 4 entry (n.b. UK grad unemployment)

• Means whole skills spectrum potentially undermined by cheap migrant labour

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Why the UK unions’ call for ‘equal pay and conditions’ is inadequate

• NOT what this agenda is about

• Temporary migrant workers don’t get organised

• Comparative advantage undermined by ‘equal pay’

• Even low UK wages worth a lot overseas: focus on exploitation of migrant workers misplaced

• UK resident workers are losing.

• TNCs expect high skills cheap –policy-makers ignore

• Fails to take account of continuum, bigger picture, trade agenda 18

Effects on national economy

• Decreased tax take, no NI

• Wages repatriated - out of economy

• No earn/spend cycle - for economic recovery

• Increased welfare bill

• Skills lost, irretrievably, for future economy19

Some conclusions • Continuum shows direction for workers is down

• EU including Mode 4 in all trade deals- ‘carrot’

• Recognising, resisting the situation is not ‘racist’. As workers’ rights are lost in the few places they exist, the model lost, less progress for workers elsewhere

• Mode 4 in ‘international trade’ requires secrecy – so far effectively maintained

• Anti-worker agenda supported by spin

• Financial services lobby is fundamental20

Action• Recognise: moving workers is major capitalist strategy.

• Disseminate information & analysis, expose spin

• Counter reluctance to discuss cheap labour: facilitate necessary public debate -> asserting other work values -> law

• Expose hidden trade agenda, relationship to domestic agenda, role of financial services

• Question EU free movement: UK govt can resist EU rules

• Call TUC to account re the EU/India FTA and beyond

• Challenge politicians to pursue these issues21

3 interlinked global trajectories

• Corporate takeover

• Corporations acquiring rights to access government spending (public procurement)

• Globalised commodification of labour 22