The London Economic | 7 November 2019
The NHS will be part of any post-Brexit US free trade deal—here’s why
by T.J. Coles
Britain’s National Health Service (NHS) is a beloved institution. Despite ongoing efforts to privatise, more than half of Britons are happy with its services and 84 percent wish it to remain under public control. Mainstream media claim that the Labour Party’s fears that parts of the NHS will be sold to the US as part of any post-Brexit Free Trade Agreement (FTA) are unfounded.
But “free trade” treaties don’t necessarily include specific words like “National Health Service” or “workers’ rights.” Indeed, the lengthy, dense texts often purposefully avoid specifics so that corporate lawyers have enough loopholes to threaten to sue over perceived hindrances to their profits.
In early-June, the US Ambassador Woody Johnson told the BBC’s Andrew Marr: “I think the entire economy, in a trade deal, all things that are traded would be on the table,” including health services. A couple of days later during his state visit, President Trump was asked about the NHS and reiterated that, as part of any FTA negotiation, “everything is on the table.”
Someone must have had a word with Trump about the electoral catastrophe for any British Conservative government that admits its privatisation goals for the NHS, especially ones that involve selling it to a deeply unpopular foreign leader. Within 24 hours, Trump told Good Morning Britain that he doesn’t see the NHS “on the table” after all.
More recently, Trump told his Brexit Party friend, Nigel Farage (who also wants to privatise the insurance aspects of the NHS), that the US “wouldn’t even be involved” in buying bits of the service. Trump then accused Labour leader Jeremy Corbyn of starting the alleged rumour, when in fact it was Trump himself during his state visit.
Mainstream media appear to have swallowed Trump’s line. One of the centrepieces of the Labour Party’s election campaign is defending the NHS. With a straight face, Andrew Marr quoted Trump’s Farage interview to John McDonnell, Labour’s Shadow Chancellor. McDonnell replied: “And you believe Donald Trump? Because I think you’ll be one of the few people in this country who actually does.”
Facts about “free trade”
What is euphemistically called “free trade” often involves the attempted corporate capture of nation-states. Typically, FTAs and related bilateral investment treaties include so-called investor-state dispute settlement (ISDS) clauses. These allow corporations to sue governments over alleged hindrances to profit, such as introducing a minimum wage or subsidising businesses. Under the US-Mexico-Canada North American Free Trade Agreement (NAFTA), Canada became one of the most sued nations in the world, as US companies objected to the government’s various environmental regulations.
FTAs also require signatories to grant each other “national treatment” status. This means that the same investment standards of country a. apply when country a.’s businesses open in country b. But suppose that country b. has tighter regulations than country a. Country a. could threaten to sue country b. under ISDS. In fact, the US Office of the Trade Representative once described ISDS as the equivalent of “gunboat diplomacy,” bragging (correctly or not) that the US had never lost an ISDS case. With regards to workers’ rights, full or partial access clauses in “national treatment” provisions could also mean that if the US and Britain sign an FTA, US companies operating in the UK—such as Amazon or Walmart (which owns ASDA)—could argue that British labour standards in these companies must align with poor US practices.
The US Trade Representative even reports that, in some cases, nationalisation is a potential trade and investment barrier and an example of unfair competition. But the NHS is a publicly-owned institution. So, what does “free trade” mean for our National Health Service?
The NHS is already a target
US companies are already eyeing the NHS. One of the big “free trade” business lobbies, the US Chamber of Commerce, says that a US firm, Health Enterprises, which exports medical equipment, is struggling to maximise profit due to European regulations. The US Chamber says: “While some countries block imports with tariffs, others block imports with red tape: additional regulations, registration fees, safety tests, etc.” The organisation was hoping to access EU markets (including Britain’s) via the US-EU “free trade” deal, the failed Transatlantic Trade and Investment Partnership. But what’s to stop them signing a deregulatory, post-Brexit deal?
In February, the Office of the US Trade Rep. published its Summary of Specific Negotiating Objectives with the UK. Boris Johnson, Nigel Farage, and Donald Trump deny the obvious. But under the heading Procedural Fairness for Pharmaceuticals and Medical Devices, the Trade Rep. makes clear that any US-UK FTA aims to: “Seek standards to ensure that government regulatory reimbursement regimes are transparent, provide procedural fairness, are nondiscriminatory, and provide full market access for U.S. products.” Read that last line again.
According to Channel 4, Stephen Vaughn, formerly of the Office of the US Trade Rep., is something of a legal shark, having helped the US to win concessions from the Canadian, Mexican, and South Korean governments on drug prices. Regarding a post-Brexit US-UK FTA, Vaughn said: “I would expect U.S. negotiators to see what we could do in terms of getting increased access to the British market. That’s what we do… I think it’s going to be likely to come up because the US mentioned pharmaceuticals in its negotiating objectives” (ellipsis in original).
The exposé by Channel 4 revealed that six meetings had taken place between US and British representatives to discuss drug pricing, or “valuing innovation” as the reps deceptively call it.
Don’t believe Trump’s lies
US companies already have a hand in running core aspects of the NHS, including supplying IBM computers, Windows operating systems, iPads for nurses and paramedics, Google’s DeepMind analytics, and various pharmaceuticals. Empowered by an FTA, they could soon boost prices, demand national treatment, and see public ownership of the NHS as unfair competition. Don’t believe Trump’s lies.