Sector News
Transnational Institute Report Claims TTIP-CETA Deal Detrimental to Public Services

Following recent protests in Berlin, the controversial Transatlantic Trade and Investment Partnership (TTIP) trade deal has returned to the forefront of public discussion. A recent report – Public Services under Attack — by The Transnational Institute, claims that the TTIP and and the EU’s Comprehensive Economic and Trade Agreement (CETA) with Canada are both harmful to public services. The EU has said that both agreements will bring opportunities to enterprises on both sides of the Atlantic by opening up public procurement markets. While widespread access to foreign markets sounds positive for enterprises, the report claims that these markets will only be dominated by the huge corporations lobbying the EU with “aggressive agendas,” while also limiting government abilities and citizens’ rights.

The report makes a number of key findings based on the most recent drafts of CETA and TTIP agreements. It says there are signs that both agreements are being influenced by the same corporate lobby groups, searching for market access in the same sorts of areas. It claims that the European Commission is engaging in “reverse lobbying” by actively stimulating businesses to lobby them around trade negotiations. The corporations involved have successfully lobbied against the exemption of public services from CETA and TTIP, and have sought to expand the scope of services subject to liberalisation.

The CETA agreement is set to become the first EU agreement with a ‘negative list’ approach, which highlights services exempt from liberalisation, rather than the usual positive list approach which only highlights services that may be liberalised. The report claims that this is a “risky approach,” as governments are making commitments to services they may know little about, or may emerge in future. The possible liberalisation of health and social care would also make it difficult to adopt new regulations in the sector.

In the worst case scenario, the report claims, the EC could “lock in” present and future liberalisations and privatisations of public services, which would threaten a growing trend of re-municipalisation of public services across Europe. It says that widespread access to government procurement may restrict the government’s ability to support local and not-for-profit providers, instead supporting the outsourcing of public sector jobs to private firms. The freedom of public utilities to produce and distribute energy according to public interest goals, such as supporting renewable energy to combat climate change, could also be compromised by both trade agreements.

Another key finding involves an aspect of the agreements that has drawn a lot of public attention: the Investor-State Dispute Settlement. Under this system, corporations would be able to sue the EU and its member states over regulatory changes in the services sector that result in a loss of profits. The report claims that regulatory public service policies, such as capping water prices and reverse privatisations could result in ISDS claims. It goes on to say that the exemptions to TTIP and CETA don’t apply to sensitive public sectors such as education, water, health, social welfare and pensions, meaning all are prone to investor attacks.

The final point of the report criticised US service companies that wish to address “inflexible labour laws,” which they view as trade barriers. One home care company claims that labour regulations which oblige firms to offer part time employees “extensive benefits including paid vacations,” would “unnecessarily” inflate costs of the service.

It’s worth remembering that the CETA agreement between the EU and Canada has not yet been ratified, and that TTIP talks are still ongoing, so many of these findings are possible implications based on what is known about the negotiations. The lack of transparency surrounding the talks has meant that nothing is yet concrete.

The report claims that the agreements will threaten the government’s ability to regulate, and citizens’ rights to vital services. It will endanger our ability to steer services of all kinds to the benefit of society. Finally, the report makes the recommendation that all public services be excluded from any EU trade agreements. It says that as long as TTIP and CETA do not protect the ability to regulate in the public interest, they should be rejected.