+44 (0)20 7799 6677

EU-US trade deal threatens NHS and corrodes sovereignty

Jonathan Lindsell, 24 March 2014

Barack Obama is meeting European leaders at The Hague to discuss Ukraine, but the ‘Transatlantic Trade and Investment Partnership’ (TTIP) won’t be far from his mind. TTIP is intended to be the jewel in Obama’s legacy crown, a free-trade and regulation-harmony deal that for the world’s two largest markets in concert. David Cameron is also championing TTIP, arguing ambitious deals like it should be pursued aggressively as part of his EU renegotiation. Kenneth Clarke, the government’s main TTIP cheerleader, thinks the £180 billion deal ‘will create the largest single market ever known’.

As details of TTIP’s negotiations emerge, many are worried. It’s difficult for details to emerge since they’re being conducted largely in secret, not subject to member state scrutiny. Corporations do, however, get a voice at the table. We know what we do from German Green Party leaks. The thrust of negotiations is that, to creating a new product and services regulation global standard, the more permissive rules-regime is favoured, so consumers across both continents get the lower level of protection.

Particularly concerning is the ‘Investor-State Dispute Settlement’ mechanism (ISDS). If an American company invests in Britain, and British (or EU) regulations later change and affect their profits, ISDS gives the American firm the right to sue our government for loss of future earnings. Evidence from Canada, El Salvador and Ecuador, where such mechanisms already operate, suggests that the threat of huge lawsuits dissuades governments from legislating on issues like cigarette packaging, increased minimum wage, toxic waste dumping and rainforest pollution. Ecuador went ahead, lost, and had to pay $1.77bn.

The ISDS mechanism is as shady as TTIP negotiations – three ‘arbitrator’ lawyers decide who’s right. Arbitrators are hired from a small pool, so many already have links to heavyweight companies. The UN mentions ‘recurrent episodes of inconsistent findings… divergent legal interpretations’ and the House of Commons Library notes ‘questions about whether ISDS are fit for their intended purpose’. Critics of the European Court of Justice should be doubly suspicious of ISDS, which bypasses British courts and implicitly undermines the principle that future parliaments should not be bound.

This has particular implications for the NHS, since the Health and Social Care Act makes the NHS offer services to procurement tender in open competition. Medical equivalents of Serco, G4S or Capita could become responsible for specific services. This may deliver better care or more efficiency in appropriate circumstances, but combined with TTIP, Kaucher & Cooper argue ISDS will give American (or European) care providers ‘legal protection for their profits regardless of patient care performance’. Such contracts could easily resemble the disastrous PFI (Private Finance Initiative) schemes of the Labour era, with clinical commissioning groups unable to cancel contracts without compensating ineffective providers.

In the context of NHS reorganisation and advancing austerity, which recent reports suggested might lead to deaths, TTIP’s menace is especially serious. UK negotiators could push for health provision to be excluded from the deal, or strike out ISDS altogether, relying on state-state arbitration under WTO rules as Australia now do routinely.


Keep up-to-date with all of our latest publications

Sign Up Here