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“Free trade”, neoliberal immigration & the globalization of guestworker programs

International Migrant Alliance Founding Assembly (Hong Kong) | 15 June 2008

Wages, Job Security, Remittances & GATS Mode 4 - Migration & Free Trade Agreements

“Free trade”, neoliberal immigration & the globalization of guestworker programs

Aziz Choudry, GATT Watchdog & bilaterals.org

I dedicate this talk to the memory of Ka Bel - Crispin Beltran - a friend and comrade who passed away in the Philippines last month. His humanity, hunger and commitment to social justice, and lifelong, principled and militant opposition to imperialism are already sorely missed by so many who had the privilege to know him.

For Canadian academic/activist David McNally, “[t]he plight of migrant workers from the Third World exposes a dirty secret about capitalist globalization: while constraints on the movement of capital are being eased, restrictions on the movement of labour are being systematically tightened. It’s not that global business does not want immigrant labour to the West [sic]. It simply wants this labour on its own terms: frightened, oppressed, vulnerable. The fundamental truth about globalization - that it represents freedom for capital and unfreedom for labour - is especially clear where global migrants are concerned.” [1]

The Declaration of Philadelphia, now an annexe to the International Labour Organization (ILO) constitution, unequivocally states: “Labour is not a commodity” [2]. The ILO is hardly a radical organization, nor is this statement a radical proposition. Yet today, workers, especially migrant workers, are routinely commodified, through domestic, regional and international instruments, policies and agreements. These include the expansion of temporary migrant worker programs, and disputes over the interpretation of labour mobility provisions in free trade and investment agreements such as the World Trade Organization (WTO) General Agreement on Trade in Services (GATS), and bilateral and regional free trade and investment agreements (FTAs) outside of the WTO. In this presentation, I will talk about the links between the resurgence of guestworker programs, migrant workers, and free trade, mainly in reference to the Asia-Pacific.

For all of the talk of postcolonialism in some circles, in 2008, Third World countries are treated as little more than colonies of transnational corporations (TNCs) and powerful governments for natural resource extraction: notably minerals, energy, biodiversity, and even people, either as labour commodities for export themselves, or producing for export in free trade/special economic zones (FTZs/SEZs), and industrial agriculture. This system of capitalist relations is backed by war, the militarization of borders, conflict- and poverty-fuelled forced migration, and in turn, the criminalization of many migrants and immigrants. Justin Akers Chacón calls this phenomenon “neoliberal immigration” - “displacement accompanied by disenfranchisement and often internal segregation in host countries” [3]. Neoliberal policies force people from their farms, jobs, families and communities and into exploitation and precarity as migrant workers in other countries. Deindustrialization and the downsizing and privatization of essential services - accompanied by increasing user fees - are other “push factors”, forcing growing numbers to seeking work abroad. Health and education professionals in shattered public sectors are forced to migrate in search of work. Free trade, its advocates (like the US Administration) promise, will supposedly lead to a reduction of immigration because countries will become more prosperous. Washington proclaimed that the North American Free Trade Agreement (NAFTA) would lead Mexico to export goods, and not people to the US, yet so-called illegal immigration to the US has risen [4].

In looking at how free trade and investment agreements can and do affect migrant workers, it is important to frame our understanding of them as comprehensive instruments of imperialism, and avoid compartmentalizing or reducing the discussion to technical trade policy analysis talk which clouds a more critical “big picture” analysis.

We are witnessing the entrenchment of immigration apartheid. A global (often Western-) educated elite is relatively mobile, but of those who are able to leave their home countries at all, the overwhelming majority of migrants are temporary, non-status, exploitable, and often underground/“illegal”. Immigration requirements have tended to become more elitist, refugee systems leave fewer avenues for appeal, and for many, permanent residence is harder to attain. Meanwhile, in both migrant-worker sending and receiving countries, a more general trend of state withdrawal for responsibility for provision of social services impacts local and migrant workers alike. Worldwide, the neoliberal offensive has also eroded trades jobs, attacked unionism, imposed policies of labour deregulation, flexibilization, casualization, expanded subcontracting chains, and the relocation of industry to cheaper production sites. In some cases, these changes have fuelled exclusionary or racist practices within unions towards new immigrants, instead of solidarity and support for struggles for workplace justice and within wider society. Immigration status is used as a tool by governments and business elites to undermine alliancebuilding among workers, while immigrants still make convenient scapegoats for politicians the world over. Simultaneously, there is a widespread reluctance and denial in many countries to admit the extent to which their economies depend on migrant labour.

In temporary migrant worker schemes, migrant workers are commodities, pure and simple, temporary labour units to be recruited, utilized and sent away again as employers require, tied to a specific employer, and therefore often stuck with worse conditions with little recourse to improve them. In this context, discrimination and exploitation because of race, immigration status, class, and gender play out together. Women migrant workers are particularly impacted, comprising the majority in sectors with the least protections, lowest wages and most demeaning conditions. Typically, guestworkers are not allowed to join unions, so have no collective bargaining power. Sometimes they are not paid on time or maybe not paid at all, may endure unsafe and unhealthy working conditions, and receive wages far below the average paid to local workers for equivalent work, toiling long hours, and perhaps be more willing to accept this situation because of the relatively short duration of their employment abroad, and are subject to abuse from employers. The labour of international migrants is systematically devalued. Skilled migrants frequently leave their countries only to find their qualifications and experience are not valued in the new country, so are locked into low-skilled jobs [5].

Migrant workers and remittances are a key area of interest to the World Bank [6], the European Commission, and the International Organization for Migration (IOM) [7] and other international agencies, which increasingly promote the concept of migrant workers’ family remittances to keep their native countries from collapsing. Remittances are what Devesh Kapur, in a 2004 UNCTAD/G-24 discussion paper calls “the new development mantra” [8]. The growing dependence on remittances from migrant workers puts many countries at the mercy of vagaries of anti-immigrant sentiment and immigration (and other) policies of other countries. Locked into a neoliberal model, countries that have grown dependent on exporting workers often have shrinking policy space to pursue other options for economic development. Growth of remittances has outpaced that of private capital flows and official development assistance (ODA) during the last 15 yrs [9]. A 2007 UN International Fund for Agricultural Development (IFAD)/Interamerican Development Bank (IDB) report showed that migrant remittances were over US $ 300 billion in 2006 [10], well over twice what ODA contributed. Of course, migration is certainly not only a South-North phenomenon, but occurs among countries in the South, Indonesian workers in Malaysia, South Asians in Gulf, Filipina caregivers in Syria, Lebanon, and dozens of other countries, and Zimbabwean and Mozambican workers in South Africa, as last month’s anti-migrant worker violence tragically reminds us [11].

GATS, “Mode 4”, and migrant workers

I) GATS - A deal made in heaven for TNCs, and hell for the people

According to David Hartridge, former Director of the WTO’s Services Division, "without the enormous pressure generated by the American financial services sector, particularly companies like American Express and Citicorp, there would have been no services agreement" [12]. The European Commission stated: “GATS is not just something that exists between Governments. It is first and foremost an instrument for the benefit of business” [13]. GATS is more about investment than trade. Under GATS, governments agree to open the economy to foreign suppliers of certain services. Services have been described as anything that you cannot drop on your foot, including banks, schools, energy, healthcare, water, rubbish collection, libraries, railways, airlines, TV and radio. In those services, foreign suppliers must be given at least as favourable treatment as it gives to local suppliers. Governments cannot set limits on the numbers of service suppliers operating in its market or impose requirements for local content. Just as workers are treated as mere commodities in these agreements, so too are fundamental services. New Zealand academic Jane Kelsey characterizes GATS as an ideological transformation of services from fundamentally social relations embedded in communities to commercialized commodities traded within an international marketplace [14]. Unsurprisingly, the GATS approach to labour mobility is very much driven by the interests of TNCs and investors, and not those of workers in the global south.

II) Mode 4- facilitating corporate operations: a false panacea for migrant labour justice

GATS includes clauses on the temporary movement of ‘natural persons’ to facilitate trade and investment in services, although there is no definition of what “temporary” means. Its annexe on the movement of natural persons deals with negotiations on individuals’ rights to stay temporarily in a country for the purpose of providing a service. GATS mode 4 extends to foreigners who are service suppliers in the host, home or a third member country, in respect of the supply of a specific service, employed in a foreign company established abroad, or which is supplying services under a contract without permanent presence in that country. It also includes independent or self-employed service providers, who get paid directly by customers.

GATS does not apply to work outside of service sectors nor to people seeking permanent employment or permanent residence. There are differing interpretations among WTO member countries about the relationship between Mode 4 and other modes of supply. Broadly, Northern governments insist that Mode 4 is supportive of the other modes. So Mode 4 supports mode 1 (cross-border supply of services); mode 2 (consumption abroad); and mode 3 (commercial presence or foreign direct investment). For example, for mode 1, an IT consultant travels abroad to install software supplied internationally by his company; for mode 2, a travel agency sends a guide abroad along with a party of tourists, and for mode 3, TNCs post executives to staff offices overseas.

The World Bank estimates that over 40% of Mode 4 commitments are for intra-corporate transfers, and another 50% cover executives, managers and specialists and business visitors [15]. Some governments argue that there is no a priori exclusion of any occupation or skill level from GATS coverage, and in that sense, all categories of natural persons could be negotiated under mode 4. Mode 4 commitments are restrictive, and subject to various limitations regarding immigration rules and economic needs tests. Where it exists, the right of labour mobility does not necessarily entail the right to practice a profession, due to national regulations for licensing and recognition of qualifications.

III) Tensions over Mode 4 and liberalizing the movement of labour

Some Southern governments see GATS Mode 4 as a way to help facilitate increased mobility of temporary workers from labour-abundant countries to labour-scarce ones, earning them more foreign exchange, while others see in these moves the potential for a global guestworker program that should be opposed. Southern governments, like India, push for an interpretation which sees Mode 4 as covering independent suppliers of services, and not just supportive to other modes, an interpretation which favours TNCs and their interests. Northern governments are pushing stringent GATS commitments on the South, and making it clear that they will not improve their offers on Mode 4. India wants separation of mode 4 from Mode 3, arguing that only Northern TNCs can afford commercial presence (mode 3). As a draft WTO negotiating text on services, released in late May shows, there remains little movement on this issue: no member country has tabled new offers on services at the WTO since late 2005 [16].

India has put forward the idea of a GATS visa [17] to facilitate the temporary entry of Indian professionals under mode 4. The Least Developed Countries (LDC) group at the WTO, led by Bangladesh, has unsuccessfully pushed developed countries to liberalize their markets for semi-skilled categories of service providers of the LDCs under mode 4 of GATS, going beyond high-skilled categories. [18] Some commentators argue that governments lobbying for a broader interpretation of GATS Mode 4 would need to demonstrate their intention and means of enforcing the temporary nature of the Mode 4 movement before the developed countries agree to liberalize this area [19].

Some NGOs also see GATS mode 4 as a potentially favourable instrument to regulate and liberalise the movement of migrant labour. [20] They seek to allay perceived fears of developed country governments regarding the adoption of a liberal interpretation of mode 4 such as opposition to the permanent immigration of workers who might enter under such an agreement, concerns about rising unemployment and related domestic opposition to foreign workers, and argue for practical ways to overcome these obstacles.

The International Confederation of Free Trade Unions (ICFTU, now ITUC [21]) and Public Services International (PSI) [22] expressed alarm at a request from China and India to take the stipulations of wage parity that those countries which have made Mode 4 commitments have specified in their offers out of the negotiations. “Not only is it bad enough that the WTO, which has no expertise in migration issues, has undertaken to conduct such discussions....It sends the wrong signal to all those who think exploitation of workers is a competitive advantage in the quest for profits”, argued Guy Ryder, General Secretary of the ICFTU.

Under dispute mechanisms of free trade and investment agreements, wage parity between temporary migrant service workers and locals may even be challenged as a protectionist measure. Sending countries could charge that wage parity undermines the competitive advantage of their migrant workers who will work for lower wages. Yet temporary foreign service workers would still have to pay the same living expenses as local workers. Proposals to expand Mode 4 commitments to explicitly cover semi-skilled and unskilled workers must be seen in context of expansion of temporary foreign worker/guestworker programs in North. They are no solution to injustices created by neoliberal programs, they work to undermine domestic labour rights, by creating and expanding a subclass of workers on special temporary visas, only here, impacting service sector jobs in ways that hitherto have mainly affected manufacturing. [23]

Tensions over the coverage and liberalization of labour mobility under GATS cannot be separated from analysis of horse-trading, armtwisting and bullying that takes place in relation to other aspects of trade and investment agreements, and aid conditionalities, for example, as well as longstanding debates over linkages between labour standards and free trade commitments. Third World governments are being blamed for blocking progress at the WTO on services which are in the interest of Northern governments and TNCs. Yet Northern governments are not making any commitments in areas of interest to the Third World like labour mobility, and continue to pressure Southern countries to make better offers on service sectors (especially finance, telecommunications, energy, distribution, environment) as a prerequisite for any new concessions on agriculture, for example.

FTAs [24]

With the slow pace of WTO negotiations and the understanding that lower-key one-on-one talks can often get faster, deeper results, while dividing up emerging alliances among Third World governments against Northern positions at the WTO, attention turned to bilateral free trade and investment agreements (FTAs). In general, governments have preferred bilateral labour agreements (BLAs), usually sectoral, giving them more flexibility control and regulatory discretion over multilateral agreements [25]. Now, a number of bilateral free trade and investment agreements have also become processes through which some governments seek to include agreements on labour mobility.

IBON has drawn attention to the reality behind the much-heralded labour mobility provisions of the still-to-be-ratified Japan-Philippines Economic Partnership Agreement (JPEPA) [26]. The agreement allows for the entry and temporary stay of Filipinos who supply health services as nurses or certified caregivers for one to three years (which may be extended). But these professionals must be proficient in both spoken and written Japanese and be qualified under Japanese law - prerequisites which severely limit their entry into the Japanese labour market. Very few nurses and caregivers will be able to overcome such barriers. After 6 months of language training, applicants can already have on-the-job training for up to 3-4 years while they try to pass the relevant national exams. Until they pass, they will only be paid as non-licensed workers, trainees, candidates, or as nurse’s aides and caregiver’s assistants. This may reduce healthcare costs in Japan, but at the expense of Filipino health professionals. Similarly, under Japan’s EPA with Indonesia, 600 experienced caregivers and 400 registered nurses from Indonesia are to be admitted on 3-4 year visas [27].

The European Union (EU) and the Australia-New Zealand Closer Economic Relationship Trade Agreement (CER) are broadest in terms of labour mobility, including access to labour markets of member countries without work permits, full national treatment for service providers, and mutual recognition of technical qualifications. Where FTAs have made some ‘GATS-plus’ commitments under Mode 4, governments have often not negotiated mutual recognition agreements (MRA) for recognizing qualifications to allow skilled professionals to take up jobs. The labour mobility provisions in the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) are largely similar to GATS, with 127 subsectors of skilled occupations granted temporary entry [28], but only professionals in auditing, architecture, medical doctors, dentistry and nursing can practice subject to MRA between to the two countries. The agreement says that mutual recognition is granted in service sectors subject to the licensing requirements of accounting and auditing, architecture, medicine, dentistry and nursing within 12 months from the date of entry into force of the agreement. This is yet to be resolved.

Singapore has been most proactive in Asia-Pacific in liberalizing movement of natural persons through bilateral FTAs, varying in the specificity of scope and length of stay. But basically, these still mainly cover business visitors, investors and intra-corporate transferees, citizens and residents of partner governments who represent a service supplier. In the Japan - Singapore Agreement there is no chapter on movement of natural persons, but provision for facilitation of movement of investors for business purposes in Chapter 7 on investment [29]. ASEAN Investment Framework Agreement [30] commits to freer movement of skilled labor and professionals.

US FTAs such as the ones concluded with Singapore and Chile allow temporary entry of business professionals from other parties to facilitate trade in services, but US approaches each trade deal individually to determine if a temporary entry chapter will benefit US trade in services [31].

Under the Thailand-Australia Free Trade Agreement, Australia made GATS-plus commitments by granting temporary entry to Thai professional chefs and masseurs, especially to provide services such as cooking training and training in traditional Thai massage through training institutes agreed to hold consultations on establishing a standard of recognition of Thai qualifications for acceptance of qualified Thai massage therapists. [32]

In sum, while there has been some limited sector-specific liberalization of temporary movement of labour in FTA services provisions, the restrictive and cautious approach has prevailed. Interestingly, the EU-Algeria FTA (Euro-Med Association agreement) has articles on permission for entry of intra-corporate transferees under GATS, but also articles which explicitly commit to cooperation in preventing and controlling illegal immigration and readmission. [33]

Good enough to work, good enough to stay

Where some liberalization of labour movement has been written into agreements like GATS Mode 4 and similar provisions in FTAs, it is highly restrictive, and framed in the interests of TNCs and overseas investors who are the true beneficiaries and authors of these deals. Generally, FTAs have tended to deepen, accelerate and broaden liberalization and deregulation, but in this area, they have thus far had very limited effect. We cannot place any hope or faith in these instruments to advance workers’ rights to migrate. There remains a danger that such agreements could in future become institutional frameworks covering temporary migrant labour flows. Political sensitivities about immigration have to contend with ageing populations and shrinking domestic labour (and taxpayer) pools in many Northern countries, putting new pressures to bring in new workers.

Struggles for dignity and justice and a living wage for migrant workers cannot be left to be fought in arenas which commodify them, like GATS and FTAs, by governments which are themselves frequently antagonistic to people’s struggles domestically and internationally by their embrace of neoliberal and imperialist policies. Global capitalism fragments labour and the lives of working people everywhere. Across the board, WTO and FTAs serve the interests of TNCs and other political and economic elites, not the people. GATS and services liberalization under FTAs are fundamentally about advancing and locking in privatization, deregulation, and unrestricted foreign investment and contracting-out that workers around the world have been resisting on many fronts. Just as many movements have rejected the idea of giving global capitalism a happy face by incorporating so-called “social” and “green” clauses linking free trade to labour and environmental standards, so too we must assert that neoliberal globalization is fundamentally exploitative of workers, and insist that such agreements have no legitimacy to deal with the lives of migrant workers. To expect to harness or transform them into instruments that will somehow advance migrant workers’ struggles is like expecting a tiger to become a vegetarian. Injustices perpetuated in the WTO and FTAs are not unintentional imbalances to be resolved by polite NGO lobbying, but underpin the very values and framework of these instruments. Rather than fighting to expand terms and provisions in these trade and investment agreements, we must support struggles of immigrant workers for regularization, justice and dignity. Support migrant worker organizations like Migrante [34], the New York Taxi Workers Alliance [35], immigrant workers centres [36], and encourage established trade unions to support immigrant workers’ struggles. As a 2004 Canadian Labour Congress discussion document [37] argues, this struggle “is critical in holding the line against declining wages and working conditions for the entire labour movement. [Migrant workers] are at the edge of the economic divide and must be protected and involved in our collective struggle in order for real change to occur. A worker is a worker is a worker.”