CETA limits the freedom of governments to make policy decisions on the organisation of Services of General Interests relevant for health
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What are Services of General Economic Interests?
Services of General Economic Interests (SGEI) include healthcare, education, social services and water supply services providing access to water and sanitation.
EU treaties normally recognise the special role of Services of General Economic Interests; CETA, though, sets out to make reservations depending in part on how those services are funded, thus possibly creating serious limitations for public services in the future.
CETA has the potential to undermine universal access to Services of General Economic Interest.
CETA will limit the freedom of governments to organise public services
CETA limits the freedom of governments to make policy decisions on the organisation of Services of General Interests relevant for health, such as social services, healthcare, education and water. These limitations are caused by incentives for further liberalisation, which create financially significant barriers to reversing such a decision.
CETA is the first EU agreement with a ‘negative list’ approach for services.
This means that all services will be subject to market liberalisation unless an explicit exception is made. CETA contains a controversial ‘ratchet clause’ which limits the reservations made by the Parties, as it applies CETA’s provisions – including the Investment Court System (ICS) rules – to all measures which go against liberalisation.
This could be considered as a limitation of the policy space of governments as only further liberalisation will not be restricted by CETA. Consequently, the claim that governments can bring back services which were privatised without any limitation is unfounded.
CETA will put profit first in privately funded Services for General Interest
Reservations in CETA only apply fully if those social, health, education and water services are publicly funded.
That would have implications for specific healthcare service providers such as the Belgian mutualités (mutual health insurance providers) which unanimously have raised concerns about CETA.
This has the potential to undermine universal access to those services and exacerbate the dual (public-private) system of service provision in the EU.
There is a risk that some businesses will prioritise profit at the expense of the public interest. They may choose to provide services only in urban and wealthy areas and invest in the most profitable sub-sectors.
As Services of General Economic Interest are not fully excluded in an unequivocal way, CETA will increase the tendency to treat those services as commodities. It is likely to lead to people having to pay more and more out of their own pocket, for example for healthcare.
How does CETA threaten universal access to Services of General Economic Interest?
CETA contains a controversial ‘ratchet clause’ which limits the reservations made by the Parties, as it applies CETA’s provisions – including the Investment Court System (ICS) rules – to all measures which go against liberalisation.
This means that all services will be subject to market liberalisation unless an explicit exception is made.
CASE STUDY: CETA could put further constraints on the right to regulate public Services in the General Interest
The EU treaties recognise the special role of Services of General Economic Interests (SGEI), including healthcare, education, social services and water supply services providing access to water and sanitation.
Whereas CETA sets out to make reservations for SGEI, the applicability of these reservations depends in part on how those services are funded. This approach can have serious limitations. According to CETA , if a national government decides to liberalise or privatise public services at any time, those services would then be subject to the trade agreement’s regulatory provisions.
These findings run contrary to the declaratory statements in the CETA Interpretative Declaration that “CETA does not prevent governments from regulating the provisions of these services in the public interest” as commitments made now could have binding effect on future governments. While CETA does not and cannot oblige countries to privatize public services, it does aim to progressively promote liberalisation – i.e. competition between service providers, be it public or private operators, in virtually all services, including in public services.
An independent social impact assessment is needed about the possible impact of CETA on affordability, quality and equal treatment in access concerning SGEI.
“We find it very problematic that CETA has the potential to limit the policy space of governments by promoting liberalisation, utilizing negative lists and applying the Investor Court System investment protection provisions. Whereas the CETA Interpretative Declaration offers some reassurance, it does not provide adequate protection to regulators in light of the potential risks.”
Regional Director for Europe,
International Federation of Medical Students’ Association (IFMSA)