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Trade disagreements: the transatlantic market and healthcare

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Negotiations are under way to create a more integrated marketplace to increase trade between the USA and the EU. However, the BMA is warning of possible adverse consequences for healthcare

USA and EU flagsThey are the two largest economies in the world — the USA and the EU.

Between them, they account for almost one third of the world’s trade in goods and services and there are moves afoot to further develop the free trade agreement between the two economic blocs.

The TTIP (transatlantic trade and investment partnership) agreement seeks to liberalise trade and investment by developing a more integrated transatlantic marketplace.

Research from the Centre for Economic Policy Research last March suggested that the partnership could mean a gross domestic product increase of up to 0.5 per cent for the EU economy — the equivalent of €119bn (£98bn) each year.

From a health perspective this extra income could have benefits, due to the strong correlation between increased prosperity and improved health outcomes.

Alignment of product standards should also allow innovative medical devices from the USA to be imported more quickly into Europe, with obvious benefits.

Talks started last July, with a fourth round of negotiations scheduled for next month. But the TTIP agreement could take up to three years to finalise and, even then, will need the approval of the European Parliament, as well as other member states.

Commercialising healthcare 

Concerns that healthcare could be opened up to even greater market forces prompted the BMA to seek assurances — before negotiations began — that healthcare provision would not be part of the talks.

Mark PorterThe BMA is not in favour of competition in healthcare and wanted to make sure the TTIP does not facilitate any more commercialisation of the NHS.

In response to lobbying, key UK and EU players in the negotiations have stressed that health services would not be up for debate.

Last April, for example, BMA council chair Mark Porter (pictured right) wrote to then trade and investment minister Lord Green, calling for healthcare to be explicitly ruled out of negotiations.

Dr Porter pointed out that research in England indicated that the commercialisation of healthcare had a negative impact on patients and carers.

‘Failure to secure this exemption could ... result in significant damage to the health of Europe’s citizenry,’ Dr Porter suggested.

NHS 'protected'

In response, Lord Green explicitly stated that there was no connection between the TTIP and the government’s changes to the UK health service, implemented through the 2012 Health and Social Care Act.

‘There is no link between this trade negotiation and this government’s health reforms, the purposes of which are to improve outcomes for patients,’ Lord Green said.

‘The further liberalisation of healthcare services is not a focus within these negotiations.’

He also stated that officials and Department of Health officials would ensure ‘national interests, including those of the NHS, are protected’.

The BMA is also part of the EU Civil Society dialogue process, a platform that represents the views and interests of a range of trade unions, professional organisations, non-governmental organisations and other alliances in Europe. This gives the association a voice at the highest levels.

Threat to public services

Concerns have also been raised about the potential for so-called IP (investor protection) and ISDS (investor to state dispute settlement) mechanisms to be used by corporations to attack public services.

They are contentious as they give foreign corporations the right to sue the countries in which they are investing if they believe a government decision has unfairly impacted on their investment.

This has happened in Australia, where the government decided to adopt standardised packaging for cigarettes — a decision supported by the Australian supreme court.

tobaccoUsing an ISDS embedded in a 1993 trade agreement that Australia had struck with Hong Kong, the tobacco company Philip Morris asked an offshore tribunal to award it money in compensation for the loss of its ‘intellectual property’.

Responding to questions by a Lords EU subcommittee C on external affairs on January 16, TTIP chief negotiator Ignacio Garcia Bercero, from the trade arm of the European Commission, said the EU had not yet put forward any proposal on ISDSs.

Mr Bercero said their mandate was to explore this issue with the US, but only to come to a definitive conclusion on whether ISDS should be part of the agreement towards the end of negotiations.

Misuse concerns

 

He added that they were currently trying to understand better the US’s own proposal, referred to as a model investment treaty, and to understand what it implied in practice. He said they have raised a number of questions about that with the US.

Ahead of the third round of negotiations on the TTIP held in Washington DC in December, Dr Porter wrote to the EU trade commissioner to request that negotiators prohibit any misuse of these mechanisms.

A subsequent statement from the EU trade spokesman John Clancy agreed that an ISDS ‘needs to be improved’ and encourages the Civil Society to work with the European Commission to ensure this happens.

The statement says: ‘We will leave no room for doubt — TTIP should explicitly state that legitimate government public policy decisions cannot be overridden.

‘It will be made crystal clear that this agreement will not limit the scope for governments to take decisions on, for example, the balance between public provision of healthcare and private services.

‘A company will not receive compensation merely because its profits drop due to health or environmental regulation.’

Recognising the extent of Civil Society’s concerns with this issue, the European Commission subsequently announced that it would consult the public on the proposed IP and ISDS mechanisms.

What next?

In early March, the European Commission will publish a proposed EU text for the investment part of the talks, which will include sections on IP and ISDS. This draft text will be accompanied by clear explanations for the non-expert.

People across the EU will then have three months to comment. The BMA has been advised that health services have not been discussed in negotiations so far.

While the USA could still seek their inclusion, its negotiators are focusing on other ‘offensive’ issues, such as financial services.

BMA EU policy manager Paul Laffin says: ‘The BMA is continuing to monitor the progress of ongoing negotiations. We will intervene where the TTIP threatens to facilitate the future commercialisation of the NHS or any other European healthcare system.

‘It is important to remember that the final agreement must be approved by the European Parliament which has the power, granted by the Lisbon Treaty, to reject international treaty agreements. It did so, overwhelmingly, in 2012 when it rejected the Anti-Counterfeiting Trade Agreement.

‘Should the TTIP seek to prioritise corporate concerns over patients’ rights, then I am confident that MEPs will once again vote to support their constituents’ interests.’

Under observation

Recognising that assurances have been given but that negotiations are ongoing, Dr Porter said: ‘We will continue to work with key players, at both national and EU level, to ensure that these commitments are honoured in the final agreement.

‘Should the agreed TTIP renege on such commitments and threaten the NHS, then we will campaign for the rejection of these provisions.’

Dr Porter has written to the new trade and investment minister Lord Livingston to reiterate the BMA’s concerns.

Elections to the European Parliament will take place on May 22.

The BMA’s manifesto, detailing the organisation’s position on TTIP and other issues, will be sent to all prospective UK MEPs and to key MEPs from across Europe.

 Read about the BMA's work on European issues