While the World Trade Organisation and employers’ representatives mainly emphasise positive aspects of opening up the EU market for service providers from third countries during a parliamentary hearing, trade union representative Waghorne warns about liberalisation with no ifs and buts: it is said that the working conditions for migrants are already poor, and there is pressure growing on the wages. Negotiations will take place only together with the trade unions.
This week the European Parliament arranged a hearing on service providers from third countries. For years at the level of the World Trade Organisation WTO there have been efforts to further liberalise services of individuals of a country on the territory of another state – called “Mode 4” in expert jargon.

Ms Carzaniga from the WTO Secretariat underlines that Mode 4 concerns only the temporary residence of service providers from third countries. In sectors in which there is a shortage of labour this would be a relief, just as it would be for the country of origin in which there are high rates of unemployment. Illegal migration could also be reduced by this. But Carzaniga also sees the possible danger of wage pressure in the affected branches of trade and for some countries of origin there is the risk that well-trained service providers will migrate – even if only temporarily.

Studies have shown that liberalisation would bring about an additional worldwide increase in welfare of between $ 150 and 200 billion. The current obligations with Mode 4 however are limited to highly qualified workers who are employed at a company in the recipient country. Many developing countries in particular would be interested in opening up the EU market for their service providers. According to the WTO the offers made by these states for EU service providers in the developing countries are very poor though.

Pascal Kerneis, Managing Director of the European Services Forum, stresses that the European labour supply will fall by 48 million people by 2050. Facilitation of legal migration is therefore a welcome measure in order to increase the labour supply. In praise he emphasised the migration policy of the USA, where 50,000 people are given a work visa each year. Of these around 27,000 are highly-qualified workers. Kerneis’ remark elsewhere in which he made estimates for the EU was interesting, though: in 2003 there was apparently an influx of more than 74,000 highly-qualified workers.

The trade union representative Mike Waghorne warns about opening up the service sector without the basic requirements. In practice the situation for migrants in the labour market is often precarious: often they have no workers’ representation, they can be easily dismissed, the working conditions are sometimes very poor. Each year there are some migrants who can only be sent home dead. The wages are in some cases even below those in their home country. Often there is also the problem that workers from third countries appear not only temporarily on the labour market – a problem that can hardly be dealt with. In some cases the country of origin suffers greatly from the migration of key employees. Sometimes it is enough when one important worker, for example a doctor, migrates, and this then means a hospital ward has to close.

To conclude, Waghorne observes that negotiations on the opening up of the labour markets for service providers from third countries should not be the concern of the World Trade Organisation. This would clearly be an issue that would have to be negotiated with the trade unions.