How might new trade deals affect the NHS?

Many believe that public services in Europe, not least the UK’s NHS, will be among the biggest prizes that trade deals like TTIP, TiSA or CETA will provide for US or Canadian based 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 (http://healthcare-competitiveness.com/wp-content/uploads/Medtronic-UnitedHealth-Group-want-to-export-U.S.-health-care.pdf).

The new brand of trade deals like TTIP and CETA will 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 has been that, if agreed, TTIP, TiSA or CETA would change the whole emphasis of NHS health care: the priority would become the rights of transnational corporations rather than the care of patients.

Over the past year or two, the NHS became a focus for public opposition to these trade deals. In response, there have been repeated assurances from the European Commission (among others) that, even given these deals, EU member states like the UK will retain the right to manage their health systems as they wished. This is true – up to a point. What was not mentioned were the possible consequences should the UK chose to exercise this right. Some of these consequences will have relevance even after the UK leaves the EU, where deals are signed before this (as with CETA).

Investor protection measures like ICS and the NHS

Take the example of investor protection measure, namely Investor-State Dispute Settlement (ISDS) or the Investment Court System (ICS). With either measure, TTIP will give US or Canadian based investors the right to claim massive compensation if a member state government introduces policy initiatives that could potentially reduce those investors’ profits. Plus, CETA and TTIP include a ‘stabilisation’ clause to ensure that ICS (or ISDS) will remain in force to protect investors’  profits for 20 years after a member state leaves the agreement – long enough to do irreparable damage to the NHS (http://www.mishcon.com/assets/managed/docs/downloads/doc_2850/TTIP_Project_v6_PJ_PROOF.pdf).

Some countries, such as Finland, have found that using private companies for providing state-funded health services has led to increased costs and poorer service, and so have returned the provision of services to the state. However, the inclusion of a stabilisation clause suggests that, if TTIP is signed before the UK leaves the EU, very little could be done in time by future UK governments wishing to reverse the growing privatisation of the NHS by US based corporations – at least without facing huge compensation costs.

Similarly, the fear of being sued for huge compensation may 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.

Because of fears of being sued under ICS or ISDS, the UK government’s right to regulate would be restricted. It would be fearful, for example, of introducing new public health regulation, or health protection and health promotion policy measures that might affect Us based companies’ future investment or profit opportunities. Evidence for safer or more effective treatments, or advances in clinical knowledge, could 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 TTIP would usher in would probably mean the downgrading of EU public health measures that govern the use of food labeling, pesticides, chemicals, the presence of hormones in meat production and so on. The EU generally has higher standards of health and safety regulation than the US 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 is to assume that something is safe unless proved otherwise. ‘Harmonisation’ is likely to mean that the standards currently set by the EU will have to be lowered to be closer to those of the US. It is unclear how the UK’s public health measures will be affected, given the vote to leave the EU.  But, at the very least, we shouldn’t lose sight of the problems posed by  ‘harmonisation’ if a new treaty is being negotiated between the UK and US.

The movement of people

Deals like TiSA include ‘Mode 4’ commitments that 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, while foreign workers must return to their country after the work is completed: if they lose their employment, they must immediately leave the host country. This makes them heavily dependant on the goodwill of their employer. Yet there appear to be no proposals in TiSA for enforceable labour standards or labour rights protection.

See also our page on whether the NHS is exempt from TTIP

For a detailed article on the question of whether the NHS is subject to competition law, see http://eutopialaw.com/2013/07/19/is-the-nhs-subject-to-competition-law/

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

For more details of the Trans-Pacific Partnership FTA see http://www.democracynow.org/2015/11/6/full_text_of_tpp_trade_deal?utm_source=Democracy+Now%21&utm_campaign=da3352b3dd-Daily_Digest&utm_medium=email&utm_term=0_fa2346a853-da3352b3dd-191071569

 Further reading on TTIP and the NHS:

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

https://fullfact.org/europe/does-ttip-mean-privatisation-nhs/

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 TiSA and public services:

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

updated May 2017

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