A post Brexit trade deal should be governed by a brand-new court system that is “fairer” to workers, the head of the TUC has said.
Frances O’Grady said Britain and the EU had a chance “to do things differently” when it comes to the arbitration courts that make judgments on trade disputes.
The Investor-State dispute settlement, the little-known system for resolving trade disputes which has existed since the 1960s, underpins thousands of European contracts. Critics, led by trade unions, have long argued the system awards too much power to corporations at the expense of the public interest, while not giving enough protection to workers and consumers.
The TUC general secretary said there was a chance to change this system, when Britain negotiates a trade deal with the EU. Britain cannot sign any trade deal until it leaves the EU, most likely in 2019, but unions want to place the issue on the agenda now.
“There is an opportunity to do this one differently, to ensure that workers’ rights are seen as a core standards, rather than an add on, that any arbitration mechanism is not only transparent, but fair,” O’Grady said.
“I hope people have learnt lessons from trade deals, like TTIP and Ceta, and public concern over arbitration mechanisms,” she said arguing that both the EU-US deal and EU-Canada one, treated workers and consumers like “second-class citizens”.
The European commission has strongly rejected claims that it downgrades workers’ rights. The comprehensive and economic trade agreement with Canada was described as the “gold standard” of global trade deals, with more government oversight than any earlier agreement.
Responding to critics of the ISDS system, the EU trade commissioner Cecilia Malmström, devised a new kind of special court for resolving disputes, where judges would be appointed by governments rather than disputing parties.
O’Grady said that the arbitration mechanism in Ceta was “better than those that came before” but had not fundamentally addressed unions’ concerns. “If you are going to have standards for goods and services, why not have standards for labour as well, to make sure there is a level playing field and you don’t get competition on the back of workers being treated badly.”
O’Grady was speaking to the Guardian in Brussels, where she also called on Theresa May to face down “Brexit fundamentalists” in the Conservative party who want to use Britain’s EU departure to start a bonfire of regulations.
Speaking in-between meetings with EU officials, she said she was pleased with the EU’s Brexit guidelines and the European parliament’s resolution, which both put European negotiators on guard against “unfair competition” from Britain. The EU guidelines draft – to be agreed by EU leaders at the end of April – call for safeguards against “unfair competitive advantages through … fiscal, social and environmental dumping”.
Arguably, the TUC’s trickier task is to lobby the British government, as debate rages about what kind of economy post-Brexit Britain should be.
On the steps of Downing Street in her first speech as prime minister, May promised to fight the “burning injustice” of poverty. But the government’s message was clouded when Philip Hammond suggested the UK could turn itself into a tax haven if it didn’t get a good Brexit deal.
Amid concern that Brexit will drown out the government’s domestic agenda, O’Grady said she didn’t expect much from this year’s Queen’s speech, but stressed the prime minister would be under pressure to deliver on her Downing Street speech, after raising expectations about help for people from “an ordinary working-class family”.
“She is going to have to have something compelling to inspire confidence that people’s lives are going to get better.”
The prime minister, O’Grady added, could not afford “another hiccough”, such as the apparent watering down of proposals to put workers on company boards. O’Grady said last year’s proposals were “disappointing” but the issue was not “completely dead yet”.