Brussels is promising to include extra safeguards in the transatlantic trade deal under discussion with the US, following protests by trade unions and anti-poverty campaigners.



Cecilia Malmström, the EU’s trade commissioner, said she planned to rework key areas of the Transatlantic Trade and Investment Partnership agreement in response to fears the deal could be used by US corporations to win health service contracts and undermine the NHS.



In an interview with the Guardian, she said courts that would arbitrate in-camera on corporate disputes needed to give US multinationals only a “limited possibility” of winning compensation if governments were to cancel privatisations or award public contracts to in-house bids.



More than 97% of respondents to an official EU survey voted against the TTIP deal after Barack Obama, the US president, and the 29 heads of EU governments backed proposals last year.

The vote came after a campaign by trade unions and charities warning the deal would allow US private health companies to bid for contracts in Europe and appeal to secret arbitration courts if they lost. US multinationals could also use the courts to challenge government policies that damaged their profits, campaigners said.



A dispute in Australia between Philip Morris, the maker of Marlboro cigarettes, and the government over a move to plain paper packaging, which has dragged on for three years without resolution, is often cited as an example of an aggressive US multinational using arbitration under a similar trade deal to block reforms.



Malmström warned that limiting the scope of the investor-state dispute settlement (ISDS) service would be difficult to achieve but she gave a categorical commitment that publicly-funded health services would be explicitly excluded from a TTIP agreement.



She said: “We need to see if there is a possibility to reform them in a modern way. So there is only a limited possibility for targeted cases for investors to have their investments protected.”



She said the courts should be more transparent “to protect against abuses and have a “very strict code of conduct for arbitrators”.

Malmström said: “Is it possible to achieve a state-of-the-art ISDS like this to replace all the 1,400 agreements in the European Union with China and the rest? I don’t know, but we are going to try.”

She was unable to say when a revised dispute resolution system would be ready for campaigners to see and would not say whether it would be included in the final draft of the trade deal, expected at the end of the year.

She said: “It is too early to say. We haven’t debated yet whether ISDS should be in the agreement. We haven’t had a council of ministers to discuss it since all the representations.”



According to legal advice given to the Unite union it would not be possible for Malmström to devise a form of words excluding public services from trade disputes. Kyriaki-Korina Raptopoulou, an expert in EU law, warned that without an explicit exclusion, NHS contracts could be disputed in ISDS’s secret courts. She added a warning that TTIP would “promote the risk of suppressing future healthcare legislation.”



Malmström is under pressure from EU leaders to find a compromise that not only satisfies protesters but can also be a template for future trade deals.



She is clearly exasperated at EU leaders who have told her to secure the TTIP while publicly siding with objectors in their home countries.



“The fact is that ministers come to Brussels and they sit around the table and say this is a good thing and we encourage the commission to finalise it by the end of 2015 – go on hurry up. And they go home to their countries and say ‘well, I’m not really sure of the benefits’,” she said.



A member of the Swedish liberal party, a small grouping in the Stockholm parliament, Malmström is socially liberal but fiscally conservative. Before taking the trade portfolio last year she was commissioner responsible for security and made waves with a call for greater protections against the trafficking of children.



But when talking about the general benefits of a US/EU trade deal, it is her free-market outlook that comes to the fore. She conceded that skilled workers were the main beneficiaries, but said that the trickle-down effect would bring benefits to those with lower skills.



Malmström said: “Generally export-related jobs tend to be more qualified jobs and so benefit skilled workers, but we hope the whole chain will improve so the whole production line will benefit. Of course there are some countries that will benefit more than others. TTIP is not the only answer but it is part of the answer.”



It is this emphasis on the role of the global market for jobs that has persuaded some campaigners to demand that TTIP be thrown out altogether. When the deadline for a draft agreement is the end of this year and a signature from all heads of state, including the outgoing US president, must be inked by next spring, the deal may already be on life-support.



What is the TTIP?

The Transatlantic Trade and Investment Partnership is a trade deal aimed at cutting regulatory barriers and tariffs between the US and the EU so that companies in each country can access each other’s markets more easily.

How did it start?

A working group set up by the leaders at the EU-US summit in 2011 reported two years later recommending a bilateral trade agreement. Negotiations started in 2013 and involved at least 100 participants. The president of the European commission, Jean-Claude Juncker, described the deal as one of his priorities.

Who could it affect?

A range of industries would be affected by the deal, from pharmaceuticals and clothes to food and finance. Supporters say it could add up to 0.5 percentage points to the American and European economies by freeing up trade. European car exports could double according to commentators, while British lamb and venison could be exported to the US.

What do opponents say?

Campaigners have raised concerns about food standards, saying the EU has stricter regulations surrounding pesticides and additives. In Britain, questions have arisen over whether parts of the NHS could be run by US health firms. Critics say that the proposed Investor State Dispute Settlement (ISDS) - which would allow businesses to sue governments for actions that hurt future profits - could bypass national laws.

What happens next?

A reworked deal would have to be ratified by the 28 governments of the EU and Congress in the US. However, the newly elected leftist Syriza government in Greece has already said it will not approve the pact.

Shane Hickey