Why EU ‘trade’ means a war on workers

1. 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

2. 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’

3. 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’

4. 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

5. 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)

6. 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.

7. 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 borders

8. ‘Liberalisation’ - key concept Liberalising 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

9. 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

10. 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 firms

11. 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?

12. 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.

13. 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

14. Other EU trade agreements In process • Canada • Singapore • Eastern Europe states • Central America • Andes Earlier 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

15. 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

16. 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

17. Across whole skills spectrum • EU labour migration - usually taken as ‘unskilled’ (though free movement of services - bring in own skilledlabour) • 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

18. 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

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 • Skills lost, irretrievably, for future economy

20. 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 fundamental

21. 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 issues

22. 3 interlinked global trajectories • Corporate takeover • Corporations acquiring rights to access government spending(public procurement) • Globalised commodification of labour