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24 June 2014

TTIP - A threat for public services

National governments can act to protect public services in TTIP, but as it stands, they are not.

Stany Grudzielski Green/EFA Advisor on Internal Market and Consumer Protection

As the TTIP talks enter the 6th round of negotiations, the chapter on services raises increasing concern. The threats posed by TTIP in this field, especially regarding public services, quality of service provision and employment conditions in the services sectors, deserve particular attention. Just like in all aspects of the TTIP, there is a general problem with the lack of transparency regarding the content of the talks, but what we already know confirms the urgent need to draw more public attention to the issues at stake.

The scope of services included in TTIP is extremely wide and, contrasting with the approach followed until recently by the EU in such free-trade negotiations, the TTIP talks are at least partly based on the "negative list" approach, meaning that all sectors will be liberalised except those subject to explicit exemptions or limitation requests by at least one of the parties. This approach can "lock-in' the future liberalisation of non-exempt services and prevent countries from reversing liberalisation trends. Unfortunately the "negative list" approach has been used recently in the CETA negotiations with Canada, but using the same approach in EU-US negotiations exposes public services to even more danger given the sheer size of US service providers. Such corporations have obvious offensive interests in taking control of vast sections of the services market in EU countries. 

In this regard, TTIP's impact on public services in the EU constitutes a major threat. The pressure from the US-side to open up services, regarded by most EU countries as public utilities, is going to be enormous. Although EU Member States can - and hopefully will - ask for limitations in many public services sectors, these are not sufficient safeguards. It will be more difficult or even impossible to maintain or introduce monopolies or exclusive service supply arrangements, or to re-organise the supply of public services which in the EU are often a complex mix involving a plurality of public and private bodies acting to fulfil public missions.

The European Commission's negotiation mandate includes, as usual in such free-trade agreements, an exemption for services supplied in the exercise of governmental authority, i.e. core governmental functions such as judiciary or police, but this is only a very limited exemption and does not constitute a safeguard at all for public services in general. In terms of sector-specific exemptions, the EU-side has no mandate to negotiate any commitment in audio-visual services, but the US audio-visual industry is pushing forward and the EU Commission has already accepted to provide detailed explanations about the scope of the exemption, which entails the risk to undermine the full exclusion of this sector from TTIP.

And the list of other public services on negotiator’s agendas is worrying. The US-side wants the opening of postal services to go beyond express delivery and include all competitive delivery services. Health services in the EU are also subject to strong interest from US providers who see them as a vast market to be gained. In the field of education, the US-side is pushing to open up adult and higher education. And the water sector is also targeted, which could undermine the exclusion of water recently obtained in the context of the EU Concessions directive.

Furthermore, economic needs tests, which are often key public regulatory instruments in areas like the health sector that restrict the number of service suppliers or the total value of service transactions in order to manage competition and save public spending, are also clearly endangered.

The EU offer on services in TTIP, currently being finalised in consultation with the EU Member States, will obviously be very similar to the EU position in the CETA negotiations with Canada, and this is not reassuring at all for the future of public services in Europe. It should be reminded that the European Parliament, in its Resolution on CETA in 2012, had clearly stated that CETA should not be regarded as a precedent for future free-trade agreements, especially when it comes to its "negative list" approach. Obviously the Council and the Commission have taken no account of the Parliament's position.

Citizens, organisations and stakeholders interested in defending and promoting the quality of public services in Europe have already started to mobilise against the threats that TTIP represents for these sectors. Public services are cornerstones of the European social model. The Greens consider that they are also key instruments to promote a more sustainable and equitable society and are an integral part of the Green New Deal. For these reasons TTIP needs to be strongly combated to avert the potential negative consequences.

It is imperative that citizens in Europe demand that their governments act to protect their public services from the threats presented in TTIP. Campaigns and national actions are needed in all EU Member States to increase awareness among parliamentarians and ministers, who to date, have largely been left in the dark too. National governments have the responsibility to protect their public services from undue market competition. They can do so by requesting broad exemptions for public services at EU Council level and by asking for Annex-II limitations (which allow governments to reverse existing service liberalisation arrangements) It is not enough to rely on the general exemption for services supplied in the exercise of governmental authority. Member States have the possibility to ask for wide limitations, both horizontally and for sector-specific public services. We strongly recommend that they do so.

The Greens have provided an explanation on how to read TTIP's service schedules, which is linked here.
The full leaked services offer is linked here.

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Peter Nolan

It appears that the EU has taken over from each and every country in the running of the affairs, so what are paying our taxes for, to keep our employees in better living conditions to what we, the People have, really they are surplus to our requirements.

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