ETUC calls for profits of forced & child labour to be counted as subsidies

Companies from countries that allow gross exploitation of workers and flout basic internationally recognised rights should not be allowed to compete in the EU single market says the ETUC.

Tomorrow the European Commission will publish a draft regulation on distortive foreign subsidies. The ETUC says that using forced or child labour and not respecting basic rights like the right of workers to organise constitutes an unfair competitive advantage (as well as being morally repugnant) and should be considered a subsidy from a non-EU Government that does not prevent it.

“The European Commission needs to look at foreign subsidies broadly” said Isabelle Schoemann, ETUC Confederal Secretary “There need to be clear rules for identifying non-EU state subsidised companies and for preventing them from exercising unfair advantage, including from gross exploitation of workers and the environment.”

“EU rules for EU businesses on unfair competition are far from perfect, but at least they exist. The same is not true within the EU for non-EU state subsidies. The ETUC is not against foreign state-owned enterprises, it is against the use of subsidies from non-EU countries in a way that distorts competition in the internal market, including when the subsidies are based on gross exploitation.”

“Companies using forced or child labour or illegally keeping down wages should not be able to use their immoral profits by investing in and even buying EU companies or winning public contracts.”

“Competitiveness must never be built on poor environmental and social standards.” 

“Now is the time for the EU to act as COVID-19 levels many EU businesses a risk of foreign acquisition due to falling demand and liquidity problems. Foreign subsidies must not put the autonomy of European industries and decent jobs at risk.”

In 2016, 35% of total assets and 16 million jobs in the EU were in companies either owned or controlled by non-EU investors. In the last few years, the share of investments by state-owned foreign entreprises and investors in tax havens has also increased.