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 transnational corporations to bring workers into the EU. In tradespeak 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 transnational 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 transnational 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. Transnational 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 transnational 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 transnational 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. Click here to read it.
The opinions in politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.