Public services could be affected by TTIP

Dutch consultant firm Ecorys tells a different story than the EU Commission about possible impacts of the much-debated TTIP.

The diverging opinions appear in a 394 pages Trade Sustainability Impact Assessment, a publicly available report commissioned by, paid for and distributed by the Commission's General Directorate for Trade.
Among the different aspects the reports summarizes the controversial issue whether TTIP would have an influence of public services by stating:

”The many uncertainties regarding the final agreement make it still difficult to predict the final outcome of TTIP for public health service.”

This assessment runs counter to repeatedly held assurances that the Commission has no intensions nor a mandate to let TTIP influence the way public services are organised in member states.

Daniel Rosario, spokesperson for Trade Commissioner Cecilia Malmström, repeats the claim:

”The Commission's approach to protecting public services in our trade agreements has been consistent for 20 years and TTIP will be no exception.”

Regulatory chill
At first, the report states that TTIP is not expected to ”deviate substantially” from previous agreements.

Never the less, there is a risk for ”regulatory chill” among governments, the report explains. If investors can claim compensation based on public authorities' decisions to make changes in the public healthcare systems, like taking back outsourced services, governments may be reluctant to take such decisions.

According to the report, the risk of regulatory chill is mitigated by the new proposal for Investor Protection, but:

”If public health services are carved out from Investor Protection, the risk for regulatory chill would be further reduced, if not completely removed.”

This might be easier said than done as the new Investment Court System (ICS) is still only a proposal by the Commission, not agreed upon by the USA.

Standstill and ratchet

Evaluating TTIP's effects on public services is complicated by the fact that similar negotiations take place in another forum called TiSA (Trade in Services Agreement).

In TiSA, the EU, the US and 21 other countries are the negotiating parties. Here, the clear aim is to freeze the present level of liberalisation of services by a standstill clause and to open up for further market access by a ratchet clause; deregulation should be a one-way street not to be reversed.

»We have a problem understanding what is going on as the TiSA negotiations are not clearly referred to in TTIP. We cannot get a clear answer on how these agreements are interlinked, « says Penny Clarke, vice general secretary at EPSU (European Public Services Union), an umbrella trade union organisation opposing privatisation of public services.

»If we look at the closed agreement between the EU and Canada (CETA –Comprehensive Economic and Trade Agreement) we notice that these two clauses are included in this agreement,« she adds.

A pinch of salt

Asked to comment on the report by Ecorys on TTIP, Trade Commissioner Cecilia Malmström's spokesperson Daniel Rosario replies by e-mail:

”We include in all our trade deals – including TTIP - solid guarantees which fully protect public services. These guarantees mean EU governments can't be forced to privatise. They remain free to keep public services public – even if they open up other services to foreign competition.”

But now the Commission has commissioned a report, which on this point contradicts your claims?

”At this point the report is still a draft that is shared with the public for consultation purposes, and its assessments should be taken with a pinch of salt. Nevertheless, when it comes to public health services, the report suggests that the approach we have been taking for the last 20 years works,” answers Daniel Rosario.

This article appears in a forthcoming issue in Danish magazine NOTAT

The report by Ecorys can be downloaded at: http://www.trade-sia.com/ttip/wp-content/uploads/sites/6/2014/02/TSIA-TTIP-draft-Interim-Technical-Report.pdf

For the quoted paragraphs see page 144: