The broad implications of Brexit
While in the EU, the UK was part of around 40 trade agreements. The European Commission carried out trade negotiations on behalf of all EU member states – the UK has not had the experience of negotiating on trade on its own behalf for over 40 years.
Since Brexit, the UK has arranged for some trade deals negotiated by the EU to be rolled over or replicated (with e.g. Switzerland, Faroe Islands, Israel, Palestinian Authority, Eastern and Southern Africa). The UK is also in the process of negotiating substantial new deals, for example, with the US, Australia and the EU.
The UK Government has made clear its ambition that the UK becomes a global leader in services trade. Generally speaking, trade deals, particularly those known as ‘new generation’ deals that include services as well as goods, award extensive powers to multinational corporations, often to the detriment of citizens’ rights and protection. They also undermine government control of regulations and standards that are seen as barriers to trade. Trade deals are not designed to protect workers’ rights, protect the environment, or support public service like the NHS. High standards and public ownership may in future be framed as ‘trade irritants’ and under threat from new trade rules.
It’s highly likely that a UK-US deal will include public services provisions. We know from negotiations between the US and EU for the now-stalled Transatlantic Trade and Investment Partnership (TTIP) that the US wanted its companies to have greater access to UK contracts for public service delivery, including NHS services. Free trade agreements increasingly contain ‘standstill’ and ‘ratchet’ mechanisms that require countries to maintain and increase the extent to which their markets are open to non-domestic corporations. These mechanisms prevent countries from reversing the privatisation of public services such as the NHS.
New trade deals may also include provisions allowing new policies to be shaped undemocratically by corporate interests, and they may allow corporations to sue governments for creating new regulations designed for the public good.
There is also a general move to negotiate new trade deals using what is called a ‘negative list’. This means that all sectors are included in a treaty unless they are explicitly and comprehensively excluded when the treaty is signed.
The risks to the NHS
New generation deals push countries to open up markets in public services such as the NHS. In the past, the NHS was safeguarded from inclusion in trade agreements as long as its services were “supplied neither on a commercial basis, nor in competition “ (GATS Article 1:3c). However, this safeguard was definitively removed in 2012 when Section 75 of the Health and Social Care Act ensured competition between providers.
The UK has made no attempt to protect the NHS from inclusion in previous trade negotiations, such as the Transatlantic Trade and Investment Partnership (TTIP) between the EU and US (currently stalled), and the deal between the EU and Canada (the Comprehensive Economic and Trade Agreement) (which is still to be ratified).
Now the UK government is saying that the NHS is ‘not on the table’ in its negotiations for a deal with the US. However, while it may not be the case that the whole institution of the NHS will not be up for sale to US companies, rules on market access, intellectual property rights, the flow of data and the like can be expected to increase the extent to which private companies can operate within the NHS. On top of which, it’s likely that the USA will demand an end to NHS controls on the cost of pharmaceuticals and the extension of pharmaceutical companies’ patents on non-generic drugs. If this were to happen, the costs of medicines would become unsustainable for the NHS.
An initial analysis of the EU’s demands for a EU-UK deal suggests that the EU does not want to carve out public services (or even just healthcare), despite carving out other service sectors such as audio-visual services. Only those activities provided ‘under the exercise of governmental authority’ would be exempted, If agreed, this means most public services will not be protected because they are not wholly or directly carried out through the government, but involve private companies through competitive tendering and, increasingly, through private company involvement in commissioning.
The NHS will also be at risk if any trade agreement includes an investment protection measure such as Investor State Dispute Settlement (ISDS). These measures give multinational corporations excessive powers to
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- sue any public sector organisation or government (and ultimately the tax payer) that threaten their corporate interests, and
- seek reparation for any potential loss of future earnings from new regulations, even when these regulations are necessary for the public good.
Investor protection measures also promote a ‘chill effect’, deterring governments from attempting to legislate for fear of being sued. The inclusion of a measure like ISDS in any trade deal will deter any future government from repealing the Health and Social Care Act, however disastrous this is proving to be for our health services. It will also act as a deterrent to any future renationalisation of the NHS.
While the US tends to seek the inclusion of ISDS in its trade agreements, it appears that the EU is not proposing this in a deal with the UK. The UK government, however, has not ruled out ISDS from its trade policy. For example, when he was the Trade Secretary, Liam Fox described calls to rule out ISDS as ‘nonsensical’.
Digital
In 2016, the Organisation for Economic Co-operation and Development (OECD) noted evidence that showed that the value of data flows (the path of data from a source to a destination) had overtaken the value of global trade in physical goods.
The NHS provides a hugely rich source of patient data that covers the entire population from cradle to grave. The free flow of data is a top priority for the US in any deal with the UK. The US is keen for the UK to drop laws from the EU that require patients to be told what is happening to their data so that US tech and pharma-companies can have unrestricted access to NHS patients’ personal medical records on an unprecedented scale.
Trade deals may also provide opportunities for tech companies to sell new systems for decision-making and the storing, management and use of data, with multinational ‘platform’ companies able to increase their control of NHS data, not least through intellectual property protection of code and algorithms. There are concerns, for example, that NHS data could be processed by a US company to invent new medical devices that could then be copyrighted before being sold back to the NHS.
It looks like the EU will want to stop UK companies – and the NHS – from having access to the computer coding used to develop products they buy from the EU, potentially preventing repair or checks on safety.
Challenges to public health that have implications for the NHS
Apart from directly impacting on the nature of NHS services, prospective trade deals may affect the NHS by including measures that undermine public health and in turn put more pressure on the NHS. For example, US negotiators have made it clear that they do not want any reference to climate change in a US-UK deal. So instead of supporting renewable forms of energy, they want to entrench the use of fossil fuels: burning fossil fuel releases pollutants that can lead to respiratory disorders, stroke, and even early death.
As the UK leaves the EU, it moves beyond the protection of Reach (an EU directive requiring companies to prove that the substances they use in products are safe for the environment and human health before they enter use). In contrast, the US uses a far weaker approach that allows the use of substances until it emerges that they are unsafe. There are fears that the protection standards in the UK will be relaxed in the pursuit of free trade deals.
The US, for example, has far lower standards regarding the use of pesticides, antibiotics and hormones in farming, alongside low-standards of welfare for animals. In its readiness to do deals with countries like the US, it seems that the UK may bow to pressure to stop using EU safety rules and allow the import of US food that’s produced to lower standards.
This could mean beef from cattle treated with hormones to increase growth, or chicken carcasses doused in chlorine dioxide or other chemicals to reduce the pathogens that are encouraged by highly intensive farming practices. Until now the use of hormones has been banned in the UK as scientists have bee unable to find a safe level for consumption. Antibiotics are used in farming not only to treat infections in animals but also to increase the growth or prevent infection in healthy animals kept in confined conditions. In the US, more than 70% of antibiotics that are medically important for humans are also used in animals. The non-essential use of antibiotics is contributing to a significant rise in antibiotic-resistant bacteria (‘superbugs’), so reducing the treatments available to patients.
Lack of veto for Parliament
Currently, and in contrast to other national parliaments, the UK Parliament does not have the power to shape the mandate for a trade deal or have a veto on any deal that is negotiated. The Constitutional Reform and Governance Act (CRG Act) of 2010 means that UK MPs are only able to delay a treaty’s ratification, not definitively reject it. Pre-Brexit, the House of Lords passed an amendment to the Trade Bill that included a meaningful vote for MPs. Following the most recent election, with the huge Conservative majority, and a revised Trade Bill, the government looks set to give the power of ratification to the trade secretary, so ensuring there is no effective role for Parliament.