Linda Kaucher is a researcher on international trade Behind closed doors, EU negotiations will trigger a new wave of cheap labour into Britain. By Linda Kaucher While political reporters for the most part ignore the EU, British domestic policy is actually formulated to fit not just with internal EU directives, but, importantly, with the EU's external international trade agenda. This broader policy affects people's lives here, particularly their employment and that of their children and grandchildren in the future. Yet information on this broader picture, the parts of EU trade policy that will affect people most, is kept from them. A very relevant and major feature of EU trade policy is the concession that allows trans-national corporations to bring workers into the EU. In trade-speak this is called 'Mode 4'. The World Trade Organisation (WTO) defines four modes for cross-border trade in services: via internet (Mode 1); where the customer crosses borders e.g. tourism and the international student market (Mode 2); where a company establishes in another country (Mode 3); and by moving workers across borders (Mode 4). Moving workers from a lower to a higher socio-economic country is a very profitable business for the trans-national corporations that are in a position to benefit, on a par with moving production and service work to cheaper labour areas of the world. With the WTO Doha deal apparently abandoned, the EU has been negotiating a set of bilateral and regional trade deals with much of the world. These deals are more secretive than WTO negotiations, with the contents of negotiations kept private until those negotiations are completed. But investigative work has revealed the urgency of the situation. The EU is including Mode 4 concessions in all of the deals it is currently negotiating. In fact Mode 4 is the carrot, to obtain, in exchange, investment opportunity access into trading partner countries for trans-national financial services corporations, which are for the most part based in London. Actually these corporations benefit from both sides of the deals. They get the investment opportunities but also cheap labour brought in, and, as this 'reserve army of labour' undermines the power of organised labour, strengthening the power of capital in its balance of power with labour. Although these are EU deals, the UK is the main and willing target for the Mode 4 concessions. Thus it is UK workers who will pay the price. A very important trade deal in this regard is the EU/India Free Trade Agreement (FTA) that has been under negotiation for four years. It has been discovered that Mode 4 concessions are the one thing that the Indian government is demanding. In addition, leaked documentation shows that the liberalised UK will be taking the bulk of the EU's Mode 4 commitment. In fact Trade Commission staff have admitted that the EU/India FTA is, in effect , 85% a UK deal. That's the percentage of the gains which will accrue to the UK (well, the international financial firms based in London, anyway) while the UK (UK workers, this time) will get that percentage of the pain. Financial services investment opportunities overseas will not produce jobs here. But workers will be displaced via Mode 4, especially in a time of cuts. Trans-national firms will be able to offer cheap onshore outsourcing, using cheaper temporary migrant labour and will also be able to supply labour into other firms allowing them to offload all employer responsibilities. Within the supposedly 'capped' UK points based system for labour migration, the government has ensured that the categories relevant to trade commitments have no numerical limits. There are no such limits on the 'intra-corporate transferees (ICTs) category in Tier 2 or on the 'international agreements' category in Tier 5. Neither is there any resident labour market test, which would stipulate that jobs have to be offered here first. In fact both these restrictions are disallowed at the international trade level in respect of Mode 4. Under the current points based system, skilled workers are currently being brought in and paid the minimum wage, which is then made up to a low industry norm with tax-free expenses and with no national insurance payable. Thus the UK government is even now encouraging the use of a cheap labour supply that not only displaces workers here but also damages the national economy in a variety of ways. Wages are repatriated overseas, the earn/spend cycle needed for recovery is broken, workers become unemployed and the welfare bill increases, the employment future for young people is further curtailed, and skills transfer are lost for the future. As trade agreements, with Mode 4 included, are committed to hard international trade law, they become effectively permanent. This is why this handing of control of UK labour migration to trans-national corporations will affect not only present but future generations. Any attempt by any future government to pull back on these commitments will potentially invoke corporate legal action to recover all anticipated profits that may be negatively affected by the government action. International financial services corporations based in London are proactive in directing UK input to EU trade policy via their lobbying mechanism 'thecityuk' and in Brussels through the European Services Forum, the mechanism that influences EU institutions directly. 'Thecityuk' is made up of International Financial Services London (IFSL) and the Corporation of London and the UK Trade and Industry (UKTI) section of the Business, Innovation and Skills Department is closely connected. 'Thecityuk''s secretive Liberalisation of Trade in Services (LOTIS) Committee ensures that UKTI bureaucrats take financial services' own directives into EU trade policy like carrier pigeons. And UK governments ensure that domestic regulation is formulated to fit with this. The Labour party has not told the UK public about this EU/India agreement and the centrality of the Mode 4 concessions even though Peter Mandelson initiated all the current agreements. Neither has the Conservative/Liberal coalition, even when David Cameron and Vince Cable led a specific 'trade' delegation to India in 2010. Greens MP Caroline Lucas spent years as an MEP and a member of the European parliament's International Trade Committee (INTA) but has declined to warn UK workers what they are being signed up to, and similarly Ukip, which has two members on the INTA but actually supports the concept of temporary labour from outside the EU being brought in by trans-national corporations. The House of Commons select committee tasked with overseeing the Department of Business, Innovation and Skills has failed to bring the Department's role in moving workers into the country into focus and has accepted the silence of the secretary of state, Cable, on this. Who will tell the UK public about these irreversible commitments on their behalf? There is a small light at the end of the tunnel. The Railways, Maritime and Transport (RMT) union is going to argue to the TUC's September Congress that it should campaign to alert the UK public to the implications of the EU/India trade deal and of Mode 4. Yet, as the TUC has so far been part of the cover-up, it remains to be seen first if this motion is passed, and then what the TUC does with it. Linda Kaucher is a researcher on international trade. With Masters degrees in Journalism and in Human Geography, from Australia and the London School of Economics, and a broad background as an educator, she campaigns to take the lid off trade secrecy. She has written articles for the Morning Star and submissions to government consultations. She was invited by the EU Trade Commission to make a presentation to its civil society dialogue on services trade. =============================== Summary 1. A key aspect of international trade negotiations now is the concession allowing transnational corporations to move workers across borders; in trade language this is called 'Mode 4'. 2. The EU is offering Mode 4 access in all the trade agreements it is negotiating. 3. India is the country pursuing Mode 4 access to the EU most strongly, on behalf of its transnational corporations (such as Tata). 4. An EU/India Free Trade Agreement is currently being fast-tracked, for which negotiations may be completed as early as December 2010. 5. Mode 4 does not have numerical limits or quotas. 6. The Mode 4 concession, in this trade agreement in particular, conflicts with the UK government’s policy to cap non-EU economic migration. If ICTs are included in the cap there will have to be enough headroom to accommodate however many such migrants from India are admitted to the UK. Background 7. The impression persists that trade is ‘goods’, but 'services' trade is now of major importance. In fact, services such as financial services and banking as well as transport and telecommunications, underpin all other forms of trade. 8. A major element in services trade is the Mode 4 concession that allows transnationally-established companies to move workers across borders. While there are 4 categories within Mode 4, it is the ‘Intracorporate Transferee’ (ICT) category that offers the most scope for corporations to profit from cross-border labour movement. While the public rhetoric is of 'the brightest and the best' and 'global talent', ‘ICTs’ provide the opportunity to capitalise on cross-border wage differentials. 9. The potential consequence for the UK workforce is direct displacement from jobs, as well as indirect displacement through cut-price outsourcing. 10. The EU is offering Mode 4 access in all its trade agreement negotiations. 11. In the multilateral World Trade Organisation (WTO) negotiations, the EU has included Mode 4 in its General Agreement on Trade in Service (GATS) offer (tabled 2.6.2005), as part of the Doha Round. This offers EU labour access to all 152 WTO Member States. The WTO Doha negotiations have stalled, but when reactivated, the EU offer will stand. 12. Meanwhile, the bilateral agreements between the EU and other countries, notably and imminently India, are the means of advancing the international trade agenda, including Mode 4 worker movement. 13. Because trade agreements fall under Commission competence, the UK has no veto on immigration of this kind, a consequence of the Lisbon Treaty that was not publicly discussed. 14. Furthermore, once an agreement is signed, it is effectively irreversible. 15. Although the EU/India FTA is negotiated at the EU level, the UK, with historical and language ties, extensive Indian investment in the UK facilitating Mode 4 access, and the most liberalised economy, will be the Member State most affected. 16. The definition of Mode 4 in the WTO General Agreement in Trade in Services (GATS) is used across trade agreements generally; it rules out quotas for Mode 4. 17. In addition, the EU, in its trade offers, has abandoned any economic needs test, such as the Resident Labour Market Test, which would have required jobs to be offered to UK workers first. Therefore there is no such requirement for Mode 4. 18. The EU Trade Commission negotiates all external trade agreements on our behalf, but Mode 4 commitments in the EU/India FTA and the other agreements depend on, and vary with, national Member State labour migration regulations. 19. ICTs have been exempted from the UK government’s interim cap, but there has been no decision so far as to their inclusion in a permanent cap. A cap on ICTs will interfere with the Mode 4 offers, so an exemption is needed quickly to match the Mode 4 offers in the imminent EU/India FTA. But if the cap is supposedly about limits, and the Mode 4 offers have no limits, then there is an inherent contradiction. The argument that ICTs are not permanent migrants does not address the effects of ICTs on UK workers. 20. When Mode 4 trade commitments are made, EU Member States and even the EU effectively lose the ability to place limits on labour migration from outside the EU; instead the initiative passes to transnational corporations. 21. Already, under existing GATT commitments, the UK government can only require ICTs to have worked with the company concerned for one year. 22. An attempt retrospectively to change Mode 4 entry could invoke not just state-to-state trade disputes, but, with the EU moving to ‘investor protection’, also the possibility of corporations suing governments for any effects on future profits. The cost would be prohibitive, deterring governments from pulling back on commitments however much UK workers were affected by them. In the context of trade agreements this is regarded as important to ‘investor security’. 23. The EU GATS offer is public, but the offers and texts of bilateral agreements like the EU/India FTA are not public until negotiations are frozen, i.e. completed and awaiting formal European Parliament ratification. Thus the public in Member States do not know what offers have been made - although transnational business appears to have both information and lobbying access. 25 October, 2010
Mode 4 - a very serious matter!The secret immigration policy they tried to hide
EU/India Free Trade Agreement
Thursday, 24 May 2012
"A very relevant and major feature of EU trade policy is the concession that allows trans-national
corporations to bring workers into the EU. In trade-speak this is called 'Mode 4'."
I imagine a lot of you reading this, will be both highly alarmed, worried, annoyed and frustrated at our total
inability to prevent it from happening!
The jobs and life of our grandchildren are at stake here - are we worried?
Do these people, in these "mighty Corporations" actually know what they are doing? The EU must have a target
of some sort, or possibly even a plan - but we are not party to it.
Our nation and from what I can see, most of central Europe as well, has been totally stirred up and is being systematically destroyed!
How can we possibly fight anything on this scale, so massive and so cunningly organised in secret?
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Part 2 - This is from Migration Watch - Oct 2010!
Politics List
Tata has bought into Britain big time - they will be legally bringing in Indian workers, to do our jobs at half the rates of pay!
This erodes, reduces, or even removes, the job prospects of our next generation.
Are we happy with this arrangement?
Our nation is being systematically destroyed - and Cameron comes on TV and smiles at us! (Reminiscent of Big Brother, of course!)
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