Late last year, George Osborne lauded forecasts from the European Commission that Britain will have the fastest-growing economy in Europe over the next two years. He was silent, of course, on the same report’s view that Britain will also have the biggest 2014 trade gap of any major industrial country. At 4.4 per cent of GDP, this trade deficit would be the largest since the Second World War with the exception of the Lawson boom year of 1989.
George Osborne has spectacularly failed to secure the “export-led” growth he promised in 2010, while our economy is still smaller and production levels lower than in 2008 before the global financial crisis. It’s plain that the UK badly needs negotiations on the EU-US trade and investment deal (TTIP) to succeed. It would be a global economic game-changer and could set the standards for worldwide trade and investment for a generation in the absence of any serious moves on multilateral trade. And it is different to other trade deals. It’s the biggest ever bilateral trade negotiation and the first between economic equals. The EU and US are evenly matched in economic wealth and power, and together we account for half the world’s economic output.
Despite the potential boost to British jobs and economic growth, there is growing concern about the consequences of any agreement on public services, and especially on the NHS.When I’ve challenged ministers to commit to securing an exemption for the NHS in the House of Commons, they’ve refused to do so. So no one can blame NHS campaigners for fearing the worst. As the BMA has argued in a letter to former trade minister Lord Green, commercialisation is bad for patients and bad for the health service. Any trade deal that advanced Tory moves to turn the NHS into a full-scale market, and privatise health services, would be fatal.
But I believe we can safeguard the NHS, settle such fears and make sure people see that the real threat to the NHS comes from the Tories, not TTIP.
Although there’s been inaction from our UK government, the prime movers on TTIP are the European Commission. And they know about the strong UK concerns, both from meetings that I’ve held directly with the EU’s chief negotiator and from some of our excellent MEPs in the European Parliament. The EU commissioner for trade has now made the public commitment that “this agreement does not endanger the NHS in any way” and that it will not stop a future Labour government from reversing Tory policy.
These pledges must be kept, and so action must match the words. The NHS needs a triple-lock exemption in the TTIP deal, and I think continued Labour, union and consumer campaigning can secure it. On all three levels there are precedents in place, as well as the powers to act.
First, the core exemption can come from the “general utilities reservation”, which the EU has included in every trade agreement it has signed, including the new trade and investment deal with Canada (CETA) which many see as a likely model for TTIP. The official technical note on CETA confirms, “Health care, public education, other social services excluded”. This allows member states to maintain public services under government control without any obligation to liberalise, and it is up to member states to decide what a “public utility” is.
Second, further protection can be provided in trade agreements by “member state reservations” which allow governments to have monopolies in these sectors and control access to other providers. And it appears that in the EU-Canada agreement the European Commission has also negotiated this specific exemption on healthcare for all member states.
Third, a special arbitration system to settle disputes between big companies and governments (ISDS) is often a part of international investment treaties. I have argued that there’s no case for including ISDS in an EU-US agreement but any proposed ISDS must protect an elected government’s right to regulate on health policy and services. Again, there is a basis for this in the EU-Canada deal, “Recognising the right of the Parties to take measures to achieve legitimate public policy objectives on the basis of the level of protection that they deem appropriate”, and the Commission are currently consulting on this approach for TTIP.
There’s no doubt that we can ensure the NHS is exempt in the EU-US trade deal, and good grounds for believing we will succeed, even with UK ministers sitting on their hands.