Labour’s FTA zeal may hit India’s labour wall

Jul 24, 2024 08:49 PM IST

India-UK economic relations reached a high during Boris Johnson’s premiership, which culminated in the agreement between the leaders of the two countries in 2021, to launch an Enhanced Trade Partnership (ETP). An important component of the ETP was the intent to negotiate a comprehensive FTA that would help double bilateral trade by 2030. The leaders of both countries agreed to remove trade barriers “through a balanced and beneficial market access package under the ETP” that would include “agriculture, health care, education, legal services, seafarers, marine, health care, and social security”.

One of the key priorities for India in its bilateral FTAs thus far has been temporary movement of people — short-duration migration to the partner countries for taking up jobs, which in WTO-speak is known as “Mode 4”. On the other hand, the UK, in all the FTAs it has signed thus far, has insisted that its partner countries must ratify and enforce fully all the Fundamental Conventions of the International Labour Organization (ILO). The relevant provisions are included in a standalone chapter on “labour”.

On the labour question, two important developments had taken place even before the FTA negotiations commenced. In what was a decidedly positive augury for India, the two countries agreed to “implement the comprehensive Migration and Mobility Partnership covering movement of students and professionals as well as irregular migration keeping in view the UK’s new skills based immigration policy”. This agreement included a young professionals scheme that would allow 3,000 young Indians to travel to the UK every year.

The second development posed several piquant questions to India. These emerged through the process of consultations that the UK’s department of international trade had initiated with a wide range of domestic stakeholders, seeking help to “craft a deal that boosts economic growth creating high-value jobs across the country”. The issue of labour standards figured prominently with the stakeholders insisting on the need to ensure that the “labour chapter [in the FTA] does not weaken or reduce the level of protection afforded by labour laws in order to encourage trade or investment”. Stakeholders were concerned over the differences between the two countries in labour standards in domestic laws as well as on the enforcement mechanisms, and the potential impact that these differences could have on “workers and business, particularly with regards to open and fair competition”. Importantly, the UK government supported the high priority that the stakeholders had accorded to safeguarding labour rights, pledging not only to not compromise on its position but also to ensure that its trade partner reaffirms its “commitment to international labour protections”.

The UK and India have long differed on this issue on two counts. First, India has always insisted that labour standards cannot be enforced through trade agreements — in other words, trade agreements cannot be given the authority to dictate to it the ideals of labour laws. Secondly, and following from the above, India has insisted that it would continue to exercise independence while defining labour rights. In keeping with this stand, India had chosen not to ratify the ILO Fundamental Conventions on Freedom of Association and Protection of the Right to Organise Convention, 1948 (C087) and Right to Organise and Collective Bargaining Convention, 1949 (C098). India has consistently argued that the ratification of these Conventions would imply granting of certain rights that are prohibited under the statutory rules for government employees, namely, to strike work, to openly criticise government policies, to freely accept financial contribution and to freely join foreign organisations, among others. With the Starmer government insisting on continuity, it would have to be seen how these existing differences between the two governments on the question of India ratifying ILO Conventions C087 and C098 are addressed.

As mentioned earlier, India’s interest in enabling temporary movement (temporary) of its people through the FTA seemed to have resonated well with the UK’s Conservative government while it was in power, especially through the MoU on Migration and Mobility Partnership. In contrast, the Labour Party seems to have sounded a discordant note on this issue in its election manifesto. The Party argued that “under the Conservatives, [the UK] economy” had become overly dependent on workers from abroad to fill skills shortages as the level of net migration was more than three times higher than that in 2019. The Party emphasised that the overall level of migration must be properly controlled and managed since failure to do so reduces the incentives for businesses to train locally and it would therefore strive to reduce net migration. Given their entrenched positions, it is clear that no less than an intervention from the top leadership will be required to settle the differences between the two countries on labour rights in India or the movement of labour from India to the UK.

Biswajit Dhar is distinguished professor, Council for Social Development, and retired professor, JNU.The views expressed are personal