Post on 01-Apr-2015
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
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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
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Focus: How EU trade deals affect
UK
(UK concern has been/is on trade effects on dev’g countries. Unions - ‘trade’ in ‘devt depts’)
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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’
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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 2
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EU trade agreement landscape:
•WTO multilateral Doha Round stalled •EU pursuing bilateral and regional trade agreements since 2005 (much more secretive)
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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.
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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
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‘Liberalisation’ - key conceptLiberalising 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
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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
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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 firms12
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
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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
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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
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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)
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Global employment situation
• Unemployment - a global crisis
• Wide open for labour exploitation - legalised means being set up for itInternal EU rules + ECJ / international trade law
Yet debate usually limited to national horizon
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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 economy20
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
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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
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