Why EU ‘trade’ means a
war on workers
Linda Kaucher
Presentation for Institute for Employment Rights conference
‘Developments in European Employment Law’
Wed 4th July 2012 Liverpool
1
Context:
3 interlinked global pathways
• Corporate takeover- size of corps
- international trade agreements
• Corporations getting rights to access govt
spending (public procurement)
- via complicit governments
& international trade agreements
• Globalised commodification of labour
(only ‘cheap’ counts)- corp profit from cross-border
wage differential (supply, use)
via international trade agreements
2
Why trade (agreements) matter
• Trade agenda is a corporate agenda
• Where neoliberalism set into hard
international trade law
• Can’t reverse even if - disastrous
- govt changes
• Dangerously unseen
3
Focus:
How EU trade deals affect
UK
(UK concern has been/is on
trade effects on dev’g countries.
Unions - ‘trade’ in ‘devt depts’)
4
EU’s external trade function
• Trade Commission (D.G.Trade) - heavyweight
part of Commission (international)
but ignored in EU debate
• Negotiates trade on behalf of MSs
• Fixes EU neoliberalism in trade agreements
subject to international trade law
• Implications for workers – allows cheap labour
from rest of world as ‘trade’
5
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 2
6
EU trade agreement landscape:
• WTO multilateral Doha Round stalled
• EU pursuing bilateral and regional trade
agreements since 2005
(much more secretive)
7
Tech talk 1: What is ‘trade’?
Not just ‘trade-in-goods’(agricultural, manufactured)
- although this focus is maintained - Cable
Also trade-in-services - now most ‘trade’
- 13 all-encompassing service categories
(including ‘Other’)
- ‘Business Services’ category includes
banking, investment, financial services
- Trade-in-services includes moving
workers across borders.
8
Tech talk 2: How trade-in-services
includes moving workers across
borders:
4 ‘modes’ of service delivery cross-cut 13 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 temporarily across
borders
9
‘Liberalisation’ - key concept
Liberalising trade-in-goods
= reducing at-the-border tariffs (& subsidies)
Liberalising trade-in-services
= open investment ops to transnational corps
& granting them rights,
including rights to bring in workers
Lib’n can be - unilateral
- via intern’l trade commitments (permanent)
UK - unilaterally liberalised - provides a model
+ big mover in EU trade deals
acting for the City of London Corp
10
EU/India Free Trade Agreement
• Neg’d since 2007 - trying for completion this year
• Mode 4 - Indian govt’s single demand
• ‘85%’ a UK/India FTA
• UK to take biggest share 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
11
UK govt &
current Mode 4 commitments (ICTs)
• Commitment for ‘senior manager’ & ‘specialist’ ICTs – but
govt allows abuse
• ICTs now substantial part of UK labour migration (but not
‘migration’)
• In ratio to population 2 X US, Australia, Canada. 10 X Germany
•
• Tier 2 ‘ICTs’ PBS category- no numerical limits (i.e. no ‘cap’!)
• Most less than a year – much lower wage requirement
• Can be paid TMW – made up with tax free ‘allowances’. No NI.
• ICTs - but most being supplied into other firms
12
Current Indian Mode 4 demands
Not ICTs (existing commitment)
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
13
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 meeting with the Trade
Commission on unworkable ‘safeguard
clause’: involvement of ETUC
Nb ETUC 80% funded by Commission
14
Other EU trade agreements
All include Mode 4 offers
In process
• Canada
• Singapore
• 6 Eastern Europe states
• Central America
• Andean states
• Malaysia
Earlier stage
• Southern Mediterranean (Morocco to Israel/Palestine)
• China (investment agreement)
• US
• Thailand, Vietnam
• West Africa (EPA)
• Pacific (PNG, Fiji) (EPA)
Completed
• Cariforum (EPA)
• S Korea
15
Policy continuum:
Internal EU/ EU external trade
EU mov’t lab & services/Mode 4 in trade ag’ts
Same - allow undercutting of host country workers
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
Different - Mode 4 workers potentially cheaper
- Mode 4 more secretive
- Mode 4 harder to reverse(international)
16
EU ‘4 freedoms’
goods, services, finance, labour,
Particular concern for workers:
- Free movement of labour - workers come
individually - facilitated by agencies, EU
- Free movement of services – firms bring in
own workers for contracts
Not just EE accession countries
Also - high unemployment states
Also - de-facto accession of 6 more low-income
EE countries, disguised as ‘trade agreements’
17
Across whole skills spectrum
• EU labour migration - usually taken as
‘unskilled’ (though free movement of services
- bring in own skilled labour)
• EU Mode 4 stipulation: ‘skilled’ or ‘highly
skilled’ (n.b. UK grad unemployment)
18
Global employment situation
• Unemployment - a global crisis
• Wide open for labour exploitation
- legalised means being set up for it
Internal EU rules + ECJ / international trade law
Yet debate usually limited to national horizon
19
Effects on national economy
• Decreased tax take, no NI
• Wages repatriated - out of economy
• No earn/spend cycle - for economic recovery
• Increased welfare bill – workers displaced
• Skills lost, irretrievably, for future economy
20
Why UK unions’ call for ‘equal pay
and conditions’ is inadequate
• NOT what this corporate agenda is about
• Temporary migrant workers don’t get organised
• Comparative advantage undermined by ‘equal pay’
• Focus on ‘exploitation of migrant workers’ misplaced even low UK wages worth a lot overseas. UK resident
workers are losing.
• TNCs expect high skills cheap - policy-makers ignore
• Fails to take account of continuum, bigger picture, trade
agenda
21
Some conclusions
• Direction for workers - downwards
• Mode 4 in all EU trade deals - ‘carrot’
• Financial services lobby is fundamental
• Mode 4 requires secrecy – so far effectively maintained
• Anti-worker agenda supported by spin
• Most unions failing to grasp situation
• Recognising, resisting the situation - not ‘racist’.
Workers’ rights lost in the few places they exist ->
model lost -> no progress for workers elsewhere
22
Action
• Recognise: moving workers is major capitalist strategy.
• Disseminate information & analysis. Expose hidden trade agenda
& relationship to domestic agenda, spin, role of financial services
• Counter reluctance to discuss cheap labour, facilitate necessary
public debate -> assert other work values -> law
• Call for Resident Labour Market Test across all labour entry
categories
• Question EU free movement: UK govt can resist EU rules
• Call TUC to account re the EU/India FTA and beyond
• Challenge politicians to take this up
23
Why act?
3 interlinked global trajectories
• Global corporate takeover
• Corporations acquiring legalised rights to
access government spending (public
procurement)
• Globalised commodification of labour
24