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The NHS and trade negotiations with the USA

by Jo Hayes on 20 April, 2015

A number of correspondents have sent standard emails to me via the 38 Degrees organisation, asking me to oppose TTIP. Rather than write dozens of long individual replies to these standard emails I thought it better to set out my views here, on my blog.

The European Union and United States are currently negotiating towards a comprehensive trade agreement, known as the Transatlantic Trade and Investment Partnership. This is TTIP. EU and US representatives are today embarking on the ninth round of negotiations in New York City.

The purpose of the negotiations is to create a single market facilitating more prosperity and jobs, help to set global rules and contribute to a stronger transatlantic partnership.

A report was released by the EU Commission a short time ago of a survey carried out last year of small and medium-sized enterprises or SMEs – businesses with fewer than 250 employees – on challenges they faced when exporting to the USA. The report found that 150,000 of the EU’s smaller businesses exported to the USA in 2012. (Of these, 26,800 were UK businesses.) The challenges they faced include:
– Complying with technical rules and regulations (that is, US ones) for all goods.
– Access to information (that is, US information) about what regulation applies to their product.
– Being legally excluded from the US market, as in many parts of public procurement.
– Compliance with customs rules.
– Differences in regulation between US states.

Today EU Commissioner Cecilia Malmström, presenting the new report, pointed out that smaller businesses are the main beneficiaries of the proposals, because large companies have the resources to have whole departments dealing with the red tape, while smaller ones don’t.

Commissioner Malmström wrote to the UK Minister of State for Trade and Investment on 26th January 2015. Her letter states that the Commission uses a series of reservations in EU trade agreements to make sure that EU member states may continue to manage their public services however they see fit. In particular, it states that outsourcing public services to private providers does not mean they become irreversibly part of the commercial sector. It is still the public purse that funds the service, and therefore the service is still protected from liberalisation in EU trade agreements through their protective reservations. It concludes clearly and firmly that there is no reason to fear either for the NHS as it stands today or for changes to the NHS in future, as a result of TTIP or EU trade policy more broadly.

Thus, the letter says that publicly funded services are outside the scope of the negotiations. That includes the NHS.

My party will press for this assurance to be reflected in the drafting of any TTIP treaty. We will protect the NHS as a top priority. Local GPs, whom we put in charge of commissioning services, will continue to decide what is best for patients.

I think it is vital to ensure that the NHS is protected. I will always resist any attempts by other parties to privatise the NHS.

Liberal Democrats in the last government stopped the Conservatives’ privatisation plans and reversed Labour’s policy of allowing private companies to “cherry pick” lucrative NHS contracts and get special favours. Liberal Democrats have also made sure that paying private companies £250 million for operations they didn’t perform can never happen again.

As the Liberal Democrat manifesto states, my party are committed to repealing any parts of the Health and Social Care Act 2012 which make NHS services vulnerable to forced privatisation through international agreements on free markets in goods and services. We have a clear guarantee from the EU that member states’ rights to provide public services directly and not open them up to competition are explicitly enshrined in the TTIP, and we will ensure this remains the case for TTIP and any future trade agreements. We support the negotiations for an ambitious TTIP and believe it could bring valuable benefits to Britain’s economy. But we will only support a TTIP that upholds EU standards of consumer, employee and environmental protection, and allows us to determine how NHS services are provided.

The proposed Investor-State Dispute Settlement (ISDS) dispute resolution process would be similar to all the hundreds of trade agreements, not specific to TTIP. The UK has such mechanisms in place with over 100 countries. These ISDS mechanisms cannot force governments to open markets or privatise public services.

The TTIP is the chance to set the standard for a modern form of ISDS but we will only support it if it works for Britain and if there is transparency as to what is being discussed. Reforms to ISDS that people are pressing for include transparent, open tribunal processes, changes in the treaty text so that future loss of profits cannot be claimed, and using an improved ISDS in TTIP to update and improve earlier, less developed ISDS arrangements.

I have also checked how the draft TTIP is adopted and given effect. The European Parliament is clear that an international agreement such as TTIP can only enter into force with the consent of the EU member states, and the consent of the European Parliament as co-legislator.

The European Parliament has issued a statement that it will continue to push for the highest possible level of transparency and will guarantee that only a good agreement will be adopted. Currently the Parliament is working on a draft of its position in preparation for a debate and vote before the summer. A number of its committees are working on their opinions which form part of the preparations.

I think the proposed TTIP, which is currently only negotiations, is potentially very beneficial to the people of this country, and capable of setting good standards for fairer future trade with the rest of the world. And fair trade promotes peace and prosperity which are good for all the world. I am not willing to promise to act to stop TTIP at this stage, when no one has seen the proposals in their final form. I think it is wise to wait and see what the proposals say and what is the outcome of the European Parliament’s deliberations. At that stage it will be possible to make an informed decision – one that protects the NHS.


2 Responses

  1. Nick Chandler says:

    Hi Jo, thanks for your message, it’s a lot clearer and more explanatory than any other I’ve seen so far and is reassuring, assuming that it all actually pans out as you describe !
    Best regards,

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