What is the purpose of the trade pact?
The aim is to remove unnecessary barriers and make it easier for the EU and USA to trade goods and services freely. Both trading blocs believe this will be advantageous for business. There may be benefits resulting from, for example, harmonisation, mutual recognition or equivalence of regulations and by a greater convergence of standards on both sides of the Atlantic so that (for example) products and services don’t have to meet two different sets of criteria before they can be traded. In the longer term, it may well act as the catalyst for global standards.
What is the timescale?
The negotiating timetable is not defined, but negotiations are now expected to continue into 2017. Any agreement reached will then have to be ratified by the European Council (the Member States) and the European Parliament.
What is all the fuss about?
The proposed agreement has excited controversy, partly because of what it may contain, and partly because of the manner in which negotiations are being conducted. Since the detail of the negotiations is confidential, and since the intelligence which circulates changes as negotiations evolve, it is impossible to predict with certainty what the final agreement will say. Opinions therefore vary between those who fear the agreement could have long-reaching, detrimental effects on public services and those who insist this is scaremongering and that there are safeguards in place to ensure this will not happen.
Can anything be done to make the negotiations more transparent?
For negotiations to work, they cannot be conducted in public. However Emily O’Reilly, the European Ombudsman, has opened a public consultation about improving transparency and will make recommendations. The European Commission has recognised the need to increase transparency and on 9 October released the text of the EU's negotiating mandate, agreed by the Member States.
What are the implications for the NHS, and what can we do about them?
The European Commissioner for Trade, Cecilia Malmström, has written to Gail Cartmail, Assistant General Secretary of the Unite Union, restating her position that the TTIP agreement poses no risk to the NHS. Read the full text of the letter.
In her letter, Commissioner Malmström concludes:
- TTIP poses no risk whatsoever to public services in the EU, including the NHS;
- nothing in TTIP would affect how the NHS in the UK operates at the moment; and
- nothing in TTIP would prevent a government from reversing policy as regards the involvement of private operators in the NHS.
We have met the European Commission’s Trade Directorate, BIS (the lead UK Government Department), the Department of Health and Local Government Association, and engaged in discussion with the BMA and RCN, to try to separate myth from fact and establish where we really need to put pressure so the NHS is protected from any potentially (even if unintended) damaging consequences. We outline below areas which may pose threats or opportunities for the NHS.
Which elements of TTIP potentially pose a threat?
The TTIP negotiations include provision for an Investor-to-State Dispute Settlement (ISDS) mechanism, a highly contentious arbitration settlement system that would allow corporations who consider their interests have been unfairly damaged to take governments before arbitration panels to settle disputes, instead of filing claims before regular courts. The panel’s decisions are usually binding and cannot be challenged in court, and can result in millions of pounds’ worth of compensation for businesses who successfully claim that national or local laws damage their profits.
The transatlantic trade deal does not have to include ISDS, and there are calls from various quarters for ISDS to be excluded from TTIP. The umbrella organisation representing local authorities across Europe, the Council of European Municipalities and Regions, has stated publicly that they consider the ISDS system is unnecessary, as such disputes can be resolved using existing legal systems.
Such has been the level of concern that the European Commission launched a public consultation in summer of 2014, asking stakeholders for their views concerning the EU’s negotiating position. The Commission has issued a report on the outcomes (see latest news above) and will publish proposals soon, which will then be discussed by the European Council and Parliament.
If it proves impossible to conclude the agreement without ISDS, at the very least we would wish to see strong safeguards built in so that this mechanism cannot be used to frustrate the public policy intentions of elected MS governments.
What kind of health services, if any, will the TTIP cover?
This is the most fundamental question about TTIP. Existing domestic law on procurement and competition already allows NHS commissioners in England to open clinical services to competition, if they so desire. It is unclear how, if at all, TTIP would alter the status quo. Recent intelligence shows that the EU has proposed that certain kinds of services should be excluded from the scope of the agreement, either for the whole of the EU or for specific Member States where they have requested an exclusion. However we are not convinced that the wording is “watertight” and would necessarily cover all situations in the NHS.
We would also want to ensure the TTIP does not contain a “ratchet” clause whereby services that are “privatised” cannot be returned to a public monopoly following a change of political direction.
Reassurances/safeguards regarding TTIP
In July, Ignacio Garcia Bercero of the European Commission (Directorate-General for Trade) wrote to John Healey, Chair of the All-Party Parliamentary Group on TTIP, with reassurances about the potential impact of the TTIP on the NHS. Mr Garcia Bercero stated that “we are confident that the rights of EU MS to manage their health systems according to their various needs can be fully safeguarded” and specifically referred to the provision in the World Trade Organisation agreements on services (GATS) which exempts “all services supplied in the exercise of governmental authority”. He also pointed to recent examples of bilateral agreements between the EU and other countries which specifically exclude publicly funded health services from the scope of commitments, so that EU countries do not have to provide access to their markets for companies from the other party’s country. And he said that whilst under ISDS it would be possible for an investor to bring a successful case and be awarded compensation, the ISDS tribunal would have no power to order repeal or a reversal of a government’s decision related to the organisation and management of health services: “We can state with confidence that any ISDS provisions in TTIP could have no impact on the UK’s sovereign right to make changes to the NHS. …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.”
The new President of the European Commission, Jean-Claude Juncker, said when presenting his outline programme to the European Parliament in July, “The Commission would negotiate a reasonable and balanced trade agreement with the US, in a spirit of mutual and reciprocal benefits and transparency”. He promised he would not “sacrifice Europe’s safety, health, social and data protection standards or our cultural diversity on the altar of free trade.”
Jean-Luc Demarty, Director General for Trade at the European Commission, wrote to Dr Sarah Wollaston, Chair of the House of Commons Health Committee, on 11 December 2014, giving further, more explicit assurances that the EU intends publicly-funded health services to be excluded from the TTIP agreement. Publicly-funded services delivered by private, or third sector organisations will also be protected. EU practice is that "ratchet" mechanisms "locking in" liberalisation will not apply to public services, so that future governments will be free to change policy direction.
Future review of the agreement
The agreement may contain provisions for review in the future, so that the parties to the agreement will be able to amend the specific commitments contained in the Schedules to the agreement- in other words, to change the lists of services which are/are not reserved to MS and therefore excluded from the scope of the agreement.
Threats and opportunities
Put most simply, we want the outcomes to maintain or improve standards of patient safety and to be affordable for our health systems. Areas that will potentially be affected by the trade agreement include the safety of medical devices and the approval, conduct and publication of clinical trials data. Discussion of intellectual property rights/patents and the pricing and reimbursement of pharmaceutical products is not currently “on the table”.
An indication of the kind of provisions which TTIP may contain is given by the recent trade agreement between the EU and Canada, which contains ISDS provisions, but which also includes strong safeguards to protect the public policy intentions of elected governments.
We will continue to monitor the ongoing negotiations, which are expected to continue well into next year. In the meantime we will continue to engage with key actors in the European institutions, the UK and the wider health community to push for robust and explicit safeguards for publicly funded health services.