How might new trade deals affect the NHS?

The new generation of trade deals, characterised for example by the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU focus heavily on trade in services. These deals aim to create new markets for the private sector by opening up public services and government spending to unrestricted competition from multinational, profit-driven corporations.  In the UK, the fear is that, if agreed, these kinds of trade deals will change the whole emphasis of NHS health care: the priority will become the interests of transnational corporations rather than the care of patients.

Many believe that public services, like the NHS, will be among the biggest prizes that new trade deals will provide for transnational corporations that are looking to expand. In 2011, for example, a coalition of US healthcare businesses, the Alliance for Healthcare Competitiveness (AHC) proposed that America’s battered economy could be rebuilt by selling the country’s health system internationally. It claimed that the scale of the US healthcare industry – “as large as the national economies of major European powers” – could provide the leverage for international expansion, and so pushed the US government to build its foreign free trade policy around the health care industry. Needless to say, the AHC lobbied hard to keep the NHS in the Transatlantic Trade and Investment Partnership (TTIP) (currently paused) between the US and EU.

While the UK was in the European Union (EU), the NHS provided a strong focus for public opposition to deals like CETA and TTIP. In response, the EU (that has until now negotiated trade deals on behalf of the UK) would say that EU member states like the UK retain the right to manage their health systems as they wished. This was true – up to a point. What was not mentioned were the possible consequences should the UK chose to exercise this right.

Now that we have left the EU, the UK government is repeatedly assuring us that the NHS will not be ‘on the table’ in trade deal negotiations. This is misleading. Of course, neither the NHS as a national health care system, nor individual NHS services are not up for sale to overseas investors. But NHS healthcare services have already been privatised – ie put out to competitive tender – and many multinational companies have won contracts. The involvement of multinationals will not only increase if the NHS is not fully protected from future deals, but existing privatisation will be almost impossible to reverse.

Investor protection measures like ISDS or ICS and the NHS

Take the example of investor protection measure, namely Investor-State Dispute Settlement (ISDS) or the Investment Court System (ICS). These measures give foreign investors the right to claim massive compensation if the UK government introduces policy initiatives that could potentially reduce those investors’ profits. Plus, historically, some deals have included a ‘stabilisation’ clause to ensure that ICS (or ISDS) will remain in force to protect investors’  profits for 20 years after a member state decides to leave the agreement.

The fear of being sued for huge compensation may also inhibit any future government from ending the contracts that many NHS Trusts have entered into with US-based private investors under the Private Finance Initiative. These contracts can be for as long as 60 or more years and often mean that NHS Trusts are repaying debt for new buildings or infrastructure at usurious rates of interest.

Fears of being sued may also restrict the UK government’s right to regulate. It would be fearful, for example, of introducing new public health regulation, or health protection and health promotion policy measures that might affect foreign-based companies’ future investment or profit opportunities. There is a risk that evidence for safer or more effective drugs, or advances in clinical knowledge, might not be put into practice (at least without the risk of being sued) if this affected the anticipated profits of existing providers.

In addition, the harmonisation of health and safety regulations that trade deals would usher in could lead to a downgrading of public health measures that govern the use of food labeling, pesticides, chemicals, the presence of hormones in meat production and so on. While the UK was in the EU, it conformed to the EU’s standards of health and safety regulation. These are higher than those of the US, for example, partly because of different methods of deciding safety standards: the EU uses the ‘precautionary principle’ (where tests must prove substances are not harmful) while the US approach, for instance, is to assume that something is safe unless proved otherwise. The UK will be under pressure in negotiating deals with the US to lower its standards to be closer to those of the US.

The movement of people

Deals like the Trade in Services Agreement (TiSA), currently being negotiated between 23 countries, include ‘Mode 4’ commitments. These allow companies based in one country to temporarily send their employees – including executives, consultants, tradespeople, nurses, construction workers, etc. – to another country for the purpose of supplying services. Usually, before hiring temporary foreign workers, most countries insist that a prospective employer carries out economic need tests, such as labour market surveys that demonstrate a local shortage of appropriately trained workers. But under Mode 4 commitments, foreign employers do not need to carry out such tests.

The effects of Mode 4 commitments can mean that local workers, such as health workers, face job losses and downward pressure on wages. The commitments also mean that foreign workers – often facing low pay and conditions – must return to their country after the work is completed, and if they lose their employment, they must immediately leave the host country. This makes them heavily dependant on the goodwill of their employer.  There appear to be no proposals in TiSA for enforceable labour standards or labour rights protection.

Resources/further reading

How public services are at risk from FTAs – http://www.waronwant.org/media/ttip-ceta-tisa-and-public-services and  http://corporateeurope.org/sites/default/files/attachments/public-services-under-attack.pdf

http://www.bbc.co.uk/news/uk-politics-eu-referendum-36578853

http://www.newstatesman.com/politics/2013/12/how-eu-making-nhs-privatisation-permanent

http://www.independent.co.uk/news/business/news/ttip-could-cause-an-nhs-sell-off-and-parliament-would-be-powerless-to-stop-it-says-leading-union-a7006471.html

Information on trade deals  and public services:

http://www.world-psi.org/sites/default/files/documents/research/en_tisaresearchpaper_hqp_internal.pdf

 https://www.youtube.com/watch?v=IT_U3VbCPaI

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