Free trade treaties and the health system

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Free Trade Treaties and the Health System

By JORGE PÉREZ ALCÁNTARA*, 19-3-15

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Freely translated by Anoosha Boralessa (August 2015). Not reviewed by bilaterals.org or any other person or organization.

While mass media are almost entirely absorbed with cases of corruption, trade and investment agreements slip by, almost unnoticed. The Transatlantic Trade and Investment Treaty (TTIP), the Canada-EU Trade Agreement (CETA) and the Treaty on Trade in Services Agreement (TiSA), as well as others, are being negotiated throughout the world, in complete opacity and in the absence of democratic checks.

These treaties are useful instruments to facilitate privatizing our health system to benefit large transnational companies. However, surely, there is no need to endorse them and allow our health system to be dismantled, threatened as it is, by the interests of corporations in the sector, insurance companies, investment funds and other economic agents, supported, more or less enthusiastically, by political sectors within and outside the current government.

With these treaties, further progress will be made in the process of eliminating the universal and equitable right to health. Including health services in these treaties can only be interpreted as the desire of big companies in this sector, to appropriate growing shares of public health budgets. Some days ago, a document presented in the TiSA negotiations, that impacted the consumption of health services abroad, was made public. It proposed that insurances, including public insurances, bear the costs of interventions performed outside their own country. Although the Commission has pretended not to acknowledge it, this proposal was definitely presented and for sure, others will follow. At issue is exploring how it may transform a part of the enormous public health bill to the benefit of these companies, although they call it mechanisms to facilitate trade.

Another scenario that we can see is that it allows private insurance systems to compete with Social Security or its substitute. RD 16/2012 not only put an end to universal delivery by drawing medical attention to the condition of the insured, which created safe harbours; it has also permitted persons with income above 100,000 euro, to be excluded from the Social Security System. This may recur through the disaggregation of other groups of the public system. In this way, groups of clients are created for private health companies ready to expand their business.

The trade treaty rules on market access will facilitate the massive entry of large transnational companies that have the right to so-called national treatment. All will be ready for giant economies to pressurize and manoeuvre so that they manage public hospitals or create parallel systems targeting that part of the population, able to pay.

This claims to be a radical transformation with no return ticket. Its entry into force shall put in place mechanisms to ensure the irreversibility of the advances to liberalization: the ISDS and Standstill and Ratchet clauses.

The ISDS is a mechanism for the resolution of disagreements between investors and States. It will allow companies to have recourse to international arbitral tribunals if they feel they have been prejudiced by a government decision affecting their expectation of profits. These tribunals operate independently of the judicial system and can impose heavy fines on states for alleged violations of commercial interests. They leave out of consideration notions that have so little compatibility with the market, such as public interest, equity or the battle against exclusion. While this system is provoking much resistance in the US treaty negotiations (the TTIP), it has been included in the treaty with Canada, now approved. With it, they claim to have an intimidatory effect, avoiding any regulation contrary to the interests of big lobbies. When a company is set up to manage hospitals or health services, it is there to stay and to keep the profits; the State will not dare to do anything contrary to the company’s interests, fearing million-dollar compensation.

The Standstill and Ratchet clauses are mechanisms included in TiSA to prevent services already privatized at the date the Treaty entered into force (the “Standstill Clause”) or services that are privatized at a later date (the “Ratchet”), being clawed back by the State. This means that if, at a future date, a government decides to transform the health system and move to a private insurance system or to simply undertake the management of hospitals and private health centres (as the Spanish government has begun to do), it could not revert to the public model unless there is a reservation explicitly excluding the health sector. Not even if the State presents evidence that the privatization process was a failure.

In the eighth round of the TTIP negotiations last February, detail was added to the Regulatory Cooperation Council. It was placed on par with the other regulators in the hierarchy. It will be able to veto any legislation that is contrary to corporate interests. Thus, any normative activity that is planned on health or sanitary issues, will have to ensure that it does not to interfere with the economic interests of multinationals. So the State’s punishment is that legislative activity is paralyzed before even needing to be controlled. Furthermore, in the most recent negotiations, art 11.2. of the EU Commission’s proposal introduces the possibility of revising all planned or “existing” regulation. This is very serious and could mean the hasty dismantling of our Public Health System.

Health is neither a commodity nor an occasion for sharp business practices. It is a right that belongs to each of us.

*Antonio Molina Habas and Vicente Pertegás Ruiz, members of ACDESA Alacant, also sign this article.

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