Doha trade negotiations

March 6, 2007 8:49 | by Linda Kaucher

Doha trade negotiations going ahead fast: opening to labour migration a major inclusion in EU offer

Despite dire statements last year about the collapse of the WTO Doha 'Development' Round, EU Trade Commissioner Peter Mandelson made it clear last week that across-the-board negotiations have now resumed. And Tony Blair has made it clear that seeing through the Doha Round is a, if not the, major factor in his refusal to leave.

The extent to which the Doha so-called Development Round will privilege transnational capital rights over rights of populations through elected governments will ensure maximum effort for a Doha deal.

The rush is to complete before US fast-track runs out in the summer. This has limited the power of Congress to just accepting or refusing complete trade deal packages it is presented with. When this finishes, the reversion to detailed scrutiny of trade deals is expected to make any US commitment impossible.

The rush is likely to mean commitments being made, with huge implications but without public knowledge. There is an urgent need for scrutiny of the implications of the trade negotiations for countries such as the UK.

Doha negotiations have overall been focussed on two agreements.

In agricultural negotiations, a major issue has been the reluctance of developed countries to abandon their protective subsidies, affecting developing countries' access to developed country markets as well their domestic markets when subsidised food imports are dumped on them.

In the manufactured goods agreement a main issue has been the forcing of developing countries into reducing their import tariffs, tariffs that are needed for the state's income for service provision, and also to protect infant industries for any chance of actual 'development' to occur.

However, alongside these, the General Agreement on Trade in Services (GATS) has been bubbling away, benefiting in leverage from the DDR, but with a life of its own if negotiations on the other agreements fail. The GATS has enormous implications for developing countries, with multinational investors chasing control of the services which underpin all other commercial, and social, activity. But the GATS also has enormous implications for developed countries and particularly the UK.

As UK services are being privatised, they are concurrently being liberalised. When the £ 3.5 billion NHS contract for elective surgery was handed to a US health investment corporation, the privatisation was UK government policy. But the liberalisation is in the fact that the contract went to an overseas corporation. The privatisation was seen, while the liberalisation wasn't mentioned. But it is the committing of such liberalisations to the international trade agreement on services, GATS, which will make both the liberalisation, and inherently the privatisation, irreversible.

The European Trade Commission has given the impression, and some people have been fooled by it, that, in response to public concern, that health and education are exempted from the EU GATS liberalisation offer. However, the GATS categories of 'Health Related' services and 'Educational Services' are easily sidestepped. For instance all hiring of staff in both services is classified in the GATS category of 'Business', a category most certainly not exempt.

An added dimension of the GATS for the EU (the US has refused it) is the liberalisation of incoming temporary migrant labour. In international trade agreement terms, privatisation, liberalisation and the liberalisation of migrant labour are a single story. The EU has included the liberalisation of temporary migrant labour in its GATS offer.

Economics writer Jerry Jones has written in the Morning Star of the general need for attention to migrant labour issues; Brian Denny, from the Uk rail union the RMT, has specified how the of the EU legal framework obliges member states to open up to migrant labour, regardless of host country social, worker or labour standard effects. Similarly, the secret EU commitment to open the EU to temporary migrant labour from all 150 member states of the WTO, will also be legally fixed and effectively irreversible.

In the WTO, the Indian government has pushed hardest to get this 'Mode 4' concession from the EU - as labour migration, as a mode of supply, is labelled. But significantly, the major lobbying pressure from within the EU has come from the transnational capital entity for the purpose, the European Services Forum. Through lobbying both the EU to open up on labour migration and the Indian government, through the investment opportunities of Indian multinationals, to demand this and to open its services to investment in exchange, transnational capital wins on both ends of these 'negotiations'.

In International Financial Services, London, the City of London base for transnational capital this side of the Atlantic, has a major role in pushing through big business preferences in EU trade policy. Interrelated, both the 'Commonwealth Business Council' and the Trade and Investment arm of the Department of Trade and Industry have been proactively promoting UK/India cross investment for some time. To counter civil society criticism of the GATS, the DTI is cynically using public concern about development, spinning that labour migration into the EU, and particularly into the UK, is the 'development' aspect of the WTO services agreement.

But an irreversible undermining of labour standards and a workers' race to the bottom within the EU, from an effectively unlimited supply of cheap, skilled labour entering the EU, appears inevitable, especially considering experience elsewhere.

In Australia, the Communications Workers Union identified a general wage level among the cheap Indian labour into IT and Financial Services supplied by multinational firms of around one third of the standard wage for comparable work.

However, many areas of skilled labour can be affected. The GATS Mode 4 entry of skilled labour fits perfectly with the highly skilled preferences of the 2005 UK Immigration Act, under which migrant workers can apply for residence after several years, an added incentive for workers to engage with an exploitative process.

The movement of middle-class, educated and high-skilled Indian labour to the EU is unlikely, however, to benefit the subsistence agricultural lives of three quarters of the Indian population. Those who are not migrating are likely to pay dearly for the liberalisation of Indian services that will be 'traded' for the undermining of the interests of EU workers.

In fact the losses that will be suffered through the overall package of Doha trade-offs is a reason for current unrest in India, where, in many ways, awareness of the implications of international trade agreements is much higher than it is in Europe.

Although the Indian government has pursued Mode 4 access (which the EU has offered freely while failing to tell the EU population) under the WTO 'Most Favoured Nation' rule, this access will be offered to workers from all WTO member states, including China.

While the Doha negations have been in the doldrums, a EU/India bilateral investment agreement has been negotiated in case the GATS did not go ahead as planned, and this similarly includes labour migration liberalisation.

This EU offer on labour migration, as well as the irreversibility of all present and future privatisations and liberalisations committed to GATS, are huge issues that should be debated. People in the UK should be given the opportunity to decide whether they do indeed want to make such commitments.

The Financial Times is assuring investors that EU legislation, which includes EU commitments to international trade agreements, will protect investments. But the secrecy in relation to those who will be negatively affected by trade agreement commitments, as well as the Left's own taboo on the discussion of migrant labour provisions, should be broken before we are committed to irreversible legal frameworks which we do not want.

Linda Kaucher is a doctoral student at the London School of Economics. Her research is focused on the gendered dimensions of the international trade agenda.

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