Health Effects of International Trade

Equality, Equity and Policy: The Health Effects of International Trade

The effects of increased international trade are both direct and indirect, as well as positive and negative (see Table 2).

Table 2: Some of the direct and indirect effects of increased international trade.

Direct Effects		Indirect Effects
Negative	Positive	Negative
Increased availability of goods beneficial to health (e.g. pharmaceuticals, food)	Increased availability of goods hazardous to health (e.g. firearms, alcohol (see Box 1) and tobacco) Migration of health professionals Potential spread of infectious disease	Poverty reduction Stimulation of development Better living conditions Greater knowledge dissemination Increasing "interconnectedness" encourages countries to respond to what happens outside their borders when developing health policy and interventions.	Increased transportation Greater use of fossil fuels Pollution Climate change, potentially including droughts, floods and rising sea levels.

The World Trade Organisation (WTO) has recognised that trade policies can have a substantial impact on health (WTO and WHO, 2002). Trade policies such as tariffs, patent protection, and free trade have both direct and indirect effects on health.

Fox and Meier (2007) outline four main trade agreements that have had direct effects on health and also outline the indirect effects of trade policy on health. These are described in table 3.

Table 3: The link between trade policies and health

Direct Effects of Trade Policies	Indirect Effects of Trade Policies
Trade Related Intellectual Property Rights (TRIPS). Forbids breaking pharmaceutical patents except via Article XX(b) when “necessary to protect human, animal or plant life or health”. TRIPS restricts access to generic medicines, which makes drugs particularity costly for those without insurance and in the developing world. Agreement on the Application of Sanitary and Phytosanitary Measures (SPS). While recognising the right of countries to take measures to protect health and life, SPS minimises the chances of these measures being used as trade barriers. Regulatory standards governing human, animal and plant health shall by default be based on recognised international bodies. More restrictive regulation must be based on scientific risk assessment.(For example, the EU ban of hormone-treated beef was judged to be unsupported by science and not addressing defined risks) Technical Barriers to Trade Agreement (TBT). Creates universal standards to protect human life and health provided these standards are not surreptitious protective shields. Encourages use of internationally agreed standards in product regulation. Regulations must be least trade-restrictive necessary. (TBT has implications for water supply, food production, and labelling of foods and drugs). General Agreements on Trade in Services (GATS). Establishes rules for trade in services including the movement of consumers and providers across borders to receive and supply health care with a view towards progressive liberalisation. (May lead to privatisation of health care)	Unjust trade laws hamper the economic development of poor countries and perpetuates the advantage of rich countries via: Non-tariff barriers to trade against exports from developing countries; Volatility of commodity prices. Trade liberalisation has deprived countries of tariff revenue (a much-needed revenue stream in the developing world).
Source: adapted from Fox and Meier, 2007

Direct Effects of Trade Policies

Indirect Effects of Trade Policies

Trade Related Intellectual Property Rights (TRIPS). Forbids breaking pharmaceutical patents except via Article XX(b) when “necessary to protect human, animal or plant life or health”. TRIPS restricts access to generic medicines, which makes drugs particularity costly for those without insurance and in the developing world.

Agreement on the Application of Sanitary and Phytosanitary Measures (SPS). While recognising the right of countries to take measures to protect health and life, SPS minimises the chances of these measures being used as trade barriers.

Regulatory standards governing human, animal and plant health shall by default be based on recognised international bodies. More restrictive regulation must be based on scientific risk assessment.(For example, the EU ban of hormone-treated beef was judged to be unsupported by science and not addressing defined risks)

Technical Barriers to Trade Agreement (TBT). Creates universal standards to protect human life and health provided these standards are not surreptitious protective shields. Encourages use of internationally agreed standards in product regulation. Regulations must be least trade-restrictive necessary. (TBT has implications for water supply, food production, and labelling of foods and drugs).

General Agreements on Trade in Services (GATS). Establishes rules for trade in services including the movement of consumers and providers across borders to receive and supply health care with a view
towards progressive liberalisation. (May lead to privatisation of health care)

Unjust trade laws hamper the economic development of poor countries and perpetuates the advantage of rich countries via:

Non-tariff barriers to trade against exports from developing countries;
Volatility of commodity prices.

Trade liberalisation has deprived countries of tariff revenue (a much-needed revenue stream in the developing world).

Source: adapted from Fox and Meier, 2007

Trade policies have the potential to conflict with public health interests. The WTO aims to remove restrictions on free trade and trade liberalisation increases the sale and consumption of some goods that are detrimental to health (See Table 2 and Box 1).

Box 1: Trade policy and alcohol.

The excess consumption of alcohol is related to increases in morbidity, mortality, and disability. Therefore, the objective of alcohol control policies is to limit alcohol consumption, often through taxation, restriction on hours of sale and advertising restrictions. The level of domestic consumption of alcohol depends upon the interaction of international demand and supply and the development of international trade policy. This presents a fundamental conflict of interest between public health alcohol policies and free trade agreements, which seek to remove restrictions on the buying and selling of goods. Article XIV of the GATS states: “nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Member of measures necessary to protect human, animal or plant life or health”. However, it is unknown how robust the exemption paragraphs will be in the long run and so far the exemption has been interpreted by the WTO restrictively (i.e. when tested, trade arguments have prevailed over other considerations). Therefore, the GATS seems unlikely to protect health-based alcohol measures.

Source: Endel, 2006

References

Endel D (2006). WTO/GATS negotiations and alcohol policy. The Globe, 3, Global Alcohol Policy Alliance.
Fox A, Meier BM (2007). Fair Trade, Human Rights and Health: Utilising the human right to development to affect international trade law for public health.
WTO, WHO (2002) WTO agreements and public health. WTO secretariat.