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Why EU ‘trade’ means a war on workers Linda Kaucher Presentation for Institute for Employment Rights conference ‘Developments in European Employment Law’

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Presentation on theme: "Why EU ‘trade’ means a war on workers Linda Kaucher Presentation for Institute for Employment Rights conference ‘Developments in European Employment Law’"— Presentation transcript:

1 Why EU ‘trade’ means a war on workers Linda Kaucher Presentation for Institute for Employment Rights conference ‘Developments in European Employment Law’ Wed 4 th July 2012 Liverpool 1

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 2

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 3

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’) 4

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’ 5

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 6

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

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. 8

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 9

10 ‘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

11 EU/India Free Trade Agreement Neg’d since 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

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 12

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 13

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 14

15 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

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) 16

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’ 17

18 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

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 19

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 20

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 21

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 22

23 Action Reco gnise: 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

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


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