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 4th July 2012 Liverpool

2. 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

3. 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

4. Focus: How EU trade deals affect UK (UK concern has been/is on trade effects on dev’g countries. Unions - ‘trade’ in ‘devt depts’)

5. 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’

6. 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

7. EU trade agreement landscape: • WTO multilateral Doha Round stalled • EU pursuing bilateral and regional trade agreements since 2005 (much more secretive)

8. 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.

9. 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

10. ‘Liberalisation’ - key concept Liberalising trade-in-goods = reducing at-the-border tariffs (& subsidies) Liberalising trade-in-services = open investment ops to transnationalcorps & 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

11. 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

12. 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

13. 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

14. 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

15. Other EU trade agreementsAll 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

16. 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)

17. 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’

18. Across whole skills spectrum • EU labour migration - usually taken as ‘unskilled’ (though free movement of services - bring in own skilledlabour) • EU Mode 4 stipulation: ‘skilled’ or ‘highly skilled’ (n.b. UK grad unemployment)

19. 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

20. 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

21. 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

22. 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

23. 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 Testacross 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

24. Why act?3 interlinked global trajectories • Global corporate takeover • Corporations acquiring legalised rights to access government spending(public procurement) • Globalised commodification of labour