Secrecy and spin are the means for pushing forward a trade policy that is formulated to benefit City of London financiers. That’s no surprise, given that the policy involves undermining workers with cheap graduate labour from outside the EU. No wonder it’s being done in secret. No wonder information is being withheld. No wonder the lie machine is on full throttle.
Mode 4: How to bring skilled workers into Britain despite an immigration ‘cap’
WORKERS, MAR 2011 ISSUE
It hasn’t been big news in Britain – it’s been bigger news in India – but the European Union is currently negotiating a Free Trade Agreement. Not just being negotiated: it’s being “fast-tracked”, in the jargon of the European Commission, which means that there is less time for scrutiny.
Free Trade Agreements are good for globalised companies, allowing them to break down tariff barriers. So what does India want from the European Union? Its sole demand – one that globalised companies are only too happy to agree to – is for something called “Mode 4 access” to EU countries.
Four modes of destruction
Cross-border trade in services has been divided into four “modes” in the international trade agenda. Mode 1 is services bought from abroad, for instance via the Internet. It is Mode 2 when buyers move across borders, for instance students going overseas to buy study programmes. When corporations set up in another country, this is Mode 3.
Mode 4 is the temporary movement of skilled service workers to another country. It allows workers to be physically moved across borders on the pay and conditions they get in their home country, in this case India. Its inclusion in the international trade agenda allows transnational corporations to profit from cross-border wage differentials, national insurance exemptions, tax juggling and other benefits of “flexible labour”. It is clearly of huge commercial importance – but at whose cost?
Calls in Britain and in the European Parliament for information receive spun responses that Mode 4 “intracorporate transferees” are temporary and thus “not migration”; and that “service suppliers” are not supplying “labour” or “workers”. But Mode 4 access will displace workers and devastate working conditions here as managers take up cheap migrant labour in “onshore outsourcing”, for which Mode 4 is a perfect fit.
Leaked documents from another EU member state government show that other countries have consulted with organised labour and have opted for very strict limits on their Mode 4 commitments for this trade deal. But not Britain. This government, like the previous one, is willing to take the lion’s share of the resulting labour influx into the European Union: 40 per cent of the total.
There have been no open consultations in Britain on the government’s Mode 4 commitment, only secrecy. Instead, the government’s recent exemption of intracorporate transferees from any supposed immigration “cap” serves to pave the way for an unlimited Mode 4 offer from Britain. So the commitment to 40 per cent is not a limit. It’s actually “40 per cent or more”.
This means that Mode 4 commitments will impact disproportionately on British workers while allowing other, more wary, member states to vote for the Treaty. The European Commission admits that this notionally EU agreement is actually 85 per cent a British deal, but its existence has been kept off the screen here and the Mode 4 aspect is deliberately very secret indeed.
One example: last July’s huge government “trade” visit to India, fronted by David Cameron and Vince Cable, failed to mention this deal to the British media posse.
A good time for bad news
In February, while media attention was distracted by Project Merlin and bankers’ bonuses, the government presented a Trade White Paper. Mentioned in only one paragraph of the Paper, Mode 4 is couched in the language of “brightest and best”, and “competitiveness”. But even now, under national labour migration provision, some of those “brightest and best” intracorporate transferees are paid below the minimum wage, with “expenses” added to bump them up on paper.
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Mandelson addresses EU-India trade talks in Finland, 2008. Photo: Confederation of Finnish Industries EK |
Only the White Paper’s supposed support for small and medium-sized enterprises – actually very weak – was selected for press attention. In fact the trade agenda gives a privileged status to transnational corporations to the detriment of national firms and small companies, particularly with Mode 4. World Trade Organisation literature emphasises that only transnational corporations can use the cheap labour mechanism of Mode 4.
The progress of trade deals through the EU mechanism is secretly manipulated at every point. Department of Business, Innovation and Skills (BIS) officials, who go fortnightly for trade policy meetings in Brussels, are instructed by City of London financial services firms and banks in London meetings. Despite the enormous bearing these meetings have on the British economy – on trade policy and on the lives of British people – no records of these meetings, “private” in every sense, are available. Similarly no minutes are available for the Commission’s Brussels trade policy meetings, so we can only find out our government’s input to EU policy anecdotally via other member states.
It’s different for transnational financial corporations. They have privileged access to information enabling them to influence trade policy.
In the middle of February the non-governmental organisation Corporate Europe Observatory launched legal action against the European Commission for giving privileged access to its policy-making process to industry lobby groups in relation to the EU/India Free Trade Agreement. The Observatory is demanding transparency. A letter written by then-EU Trade Commissioner Peter Mandelson in 2008 is a key part of their evidence.
Negotiations for bilateral trade deals such as the EU/India Free Trade Agreement are secret until effectively finalised, or “frozen”. They are formally finalised when the European Parliament gives final formal assent. But a pattern of provisionally implementing trade agreements before this stage shows how even that slim semblance of scrutiny is being bypassed.
Because of the European Parliament’s huge agenda, the committee stage, in this case the International Trade Committee (INTA), is vital, and consequently a key site for secrecy and trickery. A confidant of financial services interests in London is in a key position on this Committee, and “academic” support from the think-tank ECIPE helps agreements to slip through. This academic advice, which denies the effects on workers inside the European Union, comes from the London School of Economics staff who run ECIPE.
When Conservative MEP Sajjad Karim presented to the INTA the EU/India trade document that would subsequently go to the European Parliament for approval, he omitted to mention Mode 4 or the fact that India would not sign up without it. But Mode 4 had been the first and main item in that committee session and was included, albeit briefly, in the written document.
Downplaying services
The common misapprehension that trade is mainly agriculture and manufactured goods is encouraged. The services part of the trade agenda, despite its importance to economies, its inclusion of banking and financial services, and its underpinning of all other trade, is deliberately downplayed.
At the last high-profile meeting of trade ministers (the “Doha” round) in Geneva in July 2008, the report of the meeting on services was issued only after the world’s media had left Geneva. And when the next Doha meeting was proposed, World Trade Organisation head Pascal Lamy specifically advised states to avoid a media circus and any mention of services.
The trade agenda is not reported in Britain by the BBC, even from its Brussels office, despite its underlying importance to domestic policy-making – journalists seem to find trade too “technical”, which effectively deters media interest. Member state parliaments lost veto rights on trade agreements in the Lisbon Treaty – which further decreases the chance of trade agreement reporting in Britain.
Mode 4 is inevitably described as “sensitive” in the trade context. This is a code signal that as public knowledge could change the dynamics, public mention is to be avoided. Spin language of “competitiveness” reinforces the overriding importance of individual company efficiency, logically and legitimately advanced through using the cheapest labour from wherever. Labour is the main input cost in services.
Information is an urgent priority. British trade unions can and should counter the secrecy of the unreported trade agenda and how it will affect British workers. The wariness of those who – wrongly – consider it a “Left” agenda not to discuss migrant labour has supported this secrecy, allowing legal commitments that will undermine workers’ rights, including for future generations.