EU Trade Commissioner Karel De Gucht Confirms NHS Exemption from TTIP

As the European Union and US prepare to reopen negotiations over the Transatlantic Trade and Investment Partnership (TTIP), the EU's Trade Commissioner Karel De Gucht has confirmed that the NHS and other public services will be exempt from the free trade agreement.

In an interview with IBTimes UK, De Gucht reiterated the view expressed by his chief negotiator Ignacio Garcia Bercero last week, saying: "There will be an exemption for public services, we've made that very clear in our discussions with the US. That would cover the NHS, because that's the most sensitive issue in Great Britain. That will be covered by the public services exemption."

The sixth round of negotiations over TTIP kick off this week in Brussels, more than a year after discussions first began. The treaty has become highly controversial, with the weight of opposition gathering on both sides of the Atlantic.

Opponents claim that the agenda has been set by multinational corporations and that consumers and governments could face a dilution of their rights, should the world's largest free trade agreement come to fruition.

The sixth round of discussions come on the back of a week-long roadshow of anti-TTIP protests and meetings across cities in the UK, which culminated in a 1,000-strong demonstration at Westminster on Saturday.

Unite, Britain's largest trade union, was among those present, demanding that the NHS is excluded from TTIP negotiations, thereby protecting it from private American investors.

'Anti-American'

De Gucht's declaration will perhaps allay some of those fears, but the commissioner has slammed some critics as disingenuous and others as "anti-American".

"It's of course a very big deal which means there's a lot of interest," he said. "That interest is aroused partly by the fact that we had European elections and that a lot of parties used those as a medium to criticise TTIP on matters which are sometimes completely false, for example that we would be importing hormone beef. We will never import hormone beef, but it served political purposes of groups.

"What is a little bit surprising to me is the number of people trying to arouse anti-American feelings. It doesn't make sense to my mind because what we're really discussing are trade measures that are trying to make jobs and growth in Europe, negotiating because we have an interest in this. It's become personal, you know? Some groups are against the Americans and that's not understandable at all."

Earlier this year, De Gucht suspended discussion involving the Investor-State Dispute Settlement (ISDS), a controversial but commonplace mechanism of free trade agreements, which grants a foreign investor the right to initiate dispute settlement proceedings against a foreign government, pending the results of a public consultation.

Ostensibly, the instrument is designed to protect an investor's security abroad, but protestors have leaped on the clause and the fear that it will allow corporations to sue governments for loss of earnings.

There are some precedents. In 2011, tobacco giant Philip Morris brought a lawsuit against the Australian government after it introduced plain packaging legislation for tobacco products. The government, then led by Julia Gillard, said shortly afterwards that it would stop seeking ISDS inclusion in future trade deals.

Other cases involve US fracking companies suing the Quebecois government after a moratorium on drilling led to a devaluing of their assets and Texan oil company Occidental suing the Ecuador government for more than £1bn after a contract was cancelled.

The UN Conference on Trade and Development found that in 568 cases of ISDS being actioned, 43% have found in favour of the state, 31% of the investor and 26% settled out of court. The BBC reports that of these 568 cases, the majority have come since 2000.

The EU's public consultation ends this week and De Gucht says they have had more than 90,000 responses, but was unwilling to be drawn on what they might conclude.

"We haven't analysed them yet," he said. "That will take time and we'll at least need some months to do so. I'm not going to give an appraisal now on what the contributions are. What has become clear is that normally if you want to give a contribution you have to get into the system and answer a number of questions. They've found a way to circumvent this and not properly answer the questions. That's certainly responsible for the larger part of the contribution. But we will analyse everything that comes in."

Nevertheless, De Gucht is still hopeful that ISDS can be included in some form, saying that it is vital to protect investments when borders to capital flow fall. "We're not inventing something new, we're not aliens. We're trying to work on the basis of what is common practice and make sure that it's much better organised than it was before," he said.

Financial Regulation

Another issue high on the agenda in Brussels will be financial regulation, which has thus far been a major stumbling block in negotiations. The EU has reacted strongly to claims that a document leaked earlier in July showed that it wished to weaken financial regulation for the benefit of financial institutions.

But the case remains that the US wants to exclude the regulation of financial services from discussions while the EU is keen to press forward with "regulatory co-operation".

While refusing to be drawn on how much of a deal-breaker this element is, De Gucht admitted that the sides are still some way apart in their views.

"Up to now the US refused to discuss regulatory matters with respect to financial services," he explained. "We've said that if that's the case we're not willing to talk about market excise on financial services either. We'll have to see how this develops over time. For us there is a link between market opening for financial services on one hand and regulatory co-operation on the other hand. They're very intricately linked. It's not conceivable that you would have the real market opening without regulatory cooperation."

The multitude of obstacles the agreement faces has left some analysts wondering whether it will get over the line at all. When talks began, an initial deadline of the close of 2014 was set. De Gucht himself admits that this is now unlikely to be met, but warns that if there is no agreement in 2015, TTIP could find itself mothballed amid the changing machinations of the respective governments.

"We will not reach an agreement by the end of this year for a number of reasons," he said. "One is that certainly at the end of this year there are mid-term elections in the US. There will be more opportunities do to it next year because then you are in the middle of the electoral cycle. I believe that the window of opportunity is next year. If we don't do it next year it could take much longer, but it's feasible, technically and politically."

As negotiations continue, it seems that protests will escalate accordingly. As well as being the largest free trade agreement in the world, TTIP can also lay claim to being the most controversial.