Global Trade and Its Impact on Public Health

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Global Trade and Its Impact on Public Health

• Lily Walkover, CPATH fellow
• Center for Policy Analysis on Trade and Health
  (CPATH)
• Ellen R. Shaffer PhD MPH, Joe Brenner MA
• www.cpath.org
• International Peoples Health University June
  28, 2007

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Introduction Public Health And Global Trade

• Global trade agreements address public health
  concerns
• Public Health not generally involved
• Sustainable economic development is a public
  health issue
• Trade negotiations are at a crossroads we can
  make a difference

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Outline GLOBALIZATION PUBLIC HEALTH

• 1. Context Economic Globalization
• 2. Trade Agreements and Public Health
• Public Healths Right to Regulate
• Environment, Tobacco Control
• Services
• Affordable Medicines
• 3. Public Health Representation in U.S. Trade
  Negotiations
• 4. Prospects for Progress Bringing Public Health
  Voice to Sustainable Development

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1. Context Economic Globalization

• Threats to Global Health
• Global Economic Trends
• Barriers to Development
• Sustainable Development Prevailing Economic View
  Vs. Public Health View
• The Trade Landscape
• Trade Policy at a Crossroads

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Threats to Global Health

• Widespread threats to global health persist
• AIDS, TB, Malaria
• Infectious diseases
• Chronic illnesses Hypertension, diabetes
• Environmental Cancer, respiratory
• Coexisting with both unprecedented wealth and
  economic inequality
• Americas have greatest income inequalities

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Inequalities Health Care Expenditure Gap

• 89 of all global expenditures on health care
  goes to 16 of the worlds population
• Total world expenditure on
• healthcare 2.2 trillion
• Expenditure by the U.S. 1.1
  trillion
• GNP spent on health care
• U.S. 14.1
• SubSaharan Africa 1.6
• Benatar SR. Ethics and Tropical Diseases Some
  global considerations. In Cook G, Zumla A,
  editors. Mansons Tropical Diseases, 21st
  Edition. Edinburgh Elsevier Sciences. 2002Pp
  85-93 from Michele Barry, Yale

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Global Economic Trends

• Manufacturing, agriculture grow in low/middle
  income countries
• Growth of services sector in wealthier nations
• Greater quantity and accelerated pace of
  cross-border financial transactions and exchanges
• The integration of economic and political systems
  across the globe
• Who will control and benefit?

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Sustainable Economic Development Competing
Views

• Prevailing Economic View
• Facilitate trade to increase the wealth of
  corporations and the poor.
• Deregulation Reduce laws and regulations
• Facilitate faster flow of capital, Foreign Direct
  Investment
• Privatization
• Turn public entities into private enterprises
• Save public funds, increase access

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Public Health ViewsSustainable Alternative

• Countries determine mix of foreign investment and
  local development
• Accountable, democratic governments
• Strong social institutions and infrastructure
• Assure access to affordable vital services
• Health care, education, water and sanitation
• Promote equity
• Reject trade policy that benefits few while
  inflicting economic harm on many

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What Do Trade Agreements Do?

• Liberalize trade
• Facilitate global corporate transactions
• Reduce barriers to trade protections for
  locally made goods services
• Tariffs (e.g. barriers to trade in steel)
• Regulations (e.g. barriers to trade in services)

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Stalemate

• The major countries have sought liberalizing
  measures for their competitive sectors (services,
  goods) but have been unwilling to make offsetting
  concessions in their noncompetitive sectors
  (agriculture)
• Popular opposition Seattle, Cancun, Hong Kong,
  Guatemala, Thailand
• Deadlock at WTO meetings 1999, 2003, 2005, 2006

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Trade Policy at a CrossroadsTrade Gains Modest

• Recent studies by Carnegie and the World Bank
  show a one-time global income gain of less than
  60 billion under any realistic new WTO trade
  scenario.
• That is 0.146 percent (about one-seventh of one
  percent) of current global gross domestic product
  (GDP).
• Kym Anderson, William J. Martin, and Dominique
  van der Mensbrugghe, Global Impacts of the Doha
  Scenarios on Poverty, September 18, 2005. In
  Poverty and the WTO Impacts of the Doha
  Development Agenda, ed. Thomas W. Hertel and L.
  Alan Winters (Washington World Bank, 2006),
• Sandra Polaski, Winners and Losers Impact of the
  Doha Round on Developing Countries. Carnegie
  Endowment for International Peace, 2006.

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2. Trade Rules vs. Public Health Priorities

• Right to Regulate
• Trade Dispute Resolution
• Tobacco Control
• Services
• Intellectual Property and Access to Medicines
• Agriculture

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Trade Rules Vs. Public Health Priorities

• Liberalize trade
• Reduce barriers to trade
• Threaten to pre-empt a wide range of laws,
  regulations, policies, and programs to prevent
  disease and promote health

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Laws and Regulations At Risk

• Public subsidies for safety net health services
• Affordable medications
• Food safety/GMO foods
• Quality standards for health care services and
  products allocation based on need
• Clinician licensing
• Health insurance patient protection
• Distribution of alcohol, tobacco, firearms
• Occupational safety health
• Public administration of water sanitation

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Vectors of Pre-Emption Trade Agreement Rules

• GATS (General Agreement on Trade in Services)
• Laws and regulations that are
• more burdensome
• than necessary to ensure
• the quality of a service
• can be challenged as barriers
• to trade
• Can bargain away health protections for
  services, affordable medicines vs. economic
  protections for goods, agriculture

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Enforcing Trade RulesWTO Dispute Resolution

• 3 WTO-appointed trade experts decide in closed
  session if a WTO policy has been violated
• Can impose economic sanctions on losing country
• Challenges domestic sovereignty to regulate and
  protect health and access to vital human services

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Countries Right to Regulate Vs. Corporations
Right to Sue

• Bilateral/regional agreements like NAFTA provide
  a unique investors rights mechanism
• Foreign corporations can directly challenge
  national government actions.
• Grounds the loss of current or future profits,
  even if is caused by a government agency
  prohibiting the use of a toxic substance.

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NAFTA Challenge to Health Metalcad

• State of San Luis Potosí - permission to re-open
  waste disposal facility denied.
• Geological audit - waste disposal site would
  contaminate local water supply. Community opposed
  re-opening.
• Metalclad Company- local decision was an
  expropriation of its future potential profits.
• Metalclad successfully sued Mexico.
• Awarded 16.7 million.

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Does Public Health Ever Win?Rarely and Barely

• 2 cases in 10 years upheld public health
• Global trade dispute panels no concept of public
  health
• Decisions set poor precedents, delayed public
  health protections

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WHO/PAHO on Tobacco and Trade

• Transnational tobacco companieshave been among
  the strongest proponents of tariff reduction and
  open markets. Trade openness is linked to tobacco
  consumption.
• D. Woodward, N. Drager, R. Beaglehole, D.
  Lipson. Globalization, global public goods, and
  health. In Trade in Health Services Global,
  Regional and Country Perspectives. N. Drager and
  C. Vieira, Eds. Washington, DC PAHO, 2002. pp
  6-7.

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Chilling Effect On Public Health Regulations

• Canada proposes "plain" packaging for cigarettes
• American tobacco companies threaten NAFTA suit
  for "expropriation" of their intellectual
  property their trademarks
• Canada withdraws proposal
• Will WHO framework convention for tobacco control
  violate WTO rules?

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Intellectual Property Rules and Access to
Affordable Medicines
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Global AIDS Pandemic

• 38 million people with HIV/AIDS
• 5.8 million could benefit now from effective
  drugs
• Generic antiretrovirals inaccessible to millions
• 3x5 failed ARVs increased 440,000 to 1M in the
  developing world receiving treatment

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TRIPS

• Trade-Related Aspects of Intellectual Property
  Rights
• WTO Agreement
• 20 year product and process patents
• cant produce generics domestically while patent
  in effect
• Phased in
• Covered all high income countries as of 1996
• Middle-income countries as of 2005
• Least Developed Countries will be covered as of
  2015

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What Do Patents Do?

• Monopoly rights to originator, can sell product
  without competition
• Protection for originators intellectual
  property

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Role of Patent Policy

• Key incentive to innovation
• Fairly compensates investments in RD
• Assures timely access to new life-saving drugs
• OR
• Props up exorbitant pharma profits in absence of
  actual innovation
• Perpetuate monopoly as long as possible by
  extending patent terms, lengths.
• Discourage fair competition by generics

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Political Crisis for Pharma

• Public outcry about high prices
• U.S. pays highest prices in the world
• Reimportation proposals
• Quality control
• COX-2 inhibitors (painkillers)
• Crisis in Innovation
• Fewer new drugs in research pipeline
• Business model stuck in vicious cycle
• Driven to seek blockbuster, copycat drugs

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Pharma Political StrategyTrade Agreements

• A. Protect high prices in US market
• Block reimportation (parallel importation)
• B. Seek higher prices in other developed
  countries
• Pharma price controls harm quality, access,
  innovation
• C. Maintain IP structure in regional trade
  agreements with low/middle-income countries
• TRIPS-Plus trade rules extend patents
• Restrict production and sale of generics
• Market to small number of wealthy individuals

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TRIPS Challenge to ARVs in South Africa

• Pharma files TRIPS suit
• Withdraws due to international outcry, 2001
• Led to Doha Declaration, 2001

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Doha Declaration on the TRIPS Agreement and
Public Health

• Paragraph 4. We agree that the TRIPS Agreement
  does not and should not prevent members from
  taking measures to protect public health.
• World Trade Organization Ministerial Meeting,
  2001
• Compulsory licensing allowed
• Can authorize generic production of patented
  drugs

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TRIPS-Plus

• Debate Maximum or Minimum?
• Can bilateral and regional agreements give patent
  holders greater monopoly rights than they enjoy
  under TRIPS?
• US Yes, through bilateral/regional FTAs
• India, China, Brazil, South Africa No, use the
  WTO

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U.S. Imposes TRIPS-Plus Rules

• CAFTA enacted
• Proposed
• Andean FTA Peru, Panama, Colombia
• South Korea
• Thailand withdrew from negotiations after coup,
  issued Compulsory Licenses
• Southern African Customs Union withdrew from
  negotiations

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Agriculture, Trade and Obesity

• Global agribusiness and transnational shifting of
  raw materials to processed foods, high calorie
  soft drinks and snacks
• Nutrition transition during globalization
  dietary convergence and consumption of foods
  high in fats and sweeteners
• Cultural change urbanization, eating outside
  house, global supermarkets
• Michele
  Barry, MD, Yale

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3. Democracy in Trade Policy Who Decides?

• Who decides for the US?
• Campaign for Public Health Representation
• Trade Advisory Committees
• 2007 New Views in Congress
• Public Health Goals

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Democracy in Trade Policy Who Decides for U.S.?

• US Trade Representative (USTR) Susan Schwab,
  appointed by the President
• Fast Track Rules Congress has limited
  authority to amend trade agreements
• Expires June 30, 2007
• The public can speak up

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Campaign forPublic Health Representation

• US Trade Representative Advisory Committees
• Mechanism for domestic input into trade
  negotiations
• Provide formal, informal advice to executive
  branch
• 110 meetings in 2001

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Trade Advisory Committees Big Business 42
Public Health 0
Pharma 20 Public Health 0
Tobacco 7 Public Health 0
Alcohol 6 Public Health 0
Food 5 Public Health 0
Health Insurance 4 Public Health 0
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Public Health Takes Action

• Public health and medical groups file federal
  lawsuit for representation 2005
• One tobacco control rep appointed
• USTR reports appointing 2 public health reps to
  Committees on Pharmaceuticals and Intellectual
  Property
• Now 42 to 2-3
• 2007 Congress demands greater transparency,
  accountability

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4. Prospects for Progress Public Health Voice
for Sustainable Development
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Public Health Campaigns

• Help reframe the debate on global trade and
  economic development
• Declare health care water vital human rights
• Engage in dialogue and decision-making process to
  protect health care services and promote public
  health

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Call for AccountabilityHealth Must Take
Priority Over Commercial Interests

• Assure that health care and public health takes
  priority
• Assess impact of trade agreements on health
• Include public health community in negotiations
• Exclude provisions that could harm health, access
  to medications, health care, and other vital
  human services
• Assure universal access to health care, water and
  sanitation, affordable meds, education, and
  environmental safety
• American Public Health Association, Medical
  Students Assn, Nurses Assn, Public Health
  Officers, World Federation of Public Health
  Associations

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States, Cities, TownsConcerned

• State and local officials are gravely concerned
  about the prospect of the Singapore FTA dispute
  resolution mechanism no provision remotely
  similar to NAFTAs should be included in future
  agreements
• Executive Directors of National Conference of
  State Legislators, National League of Cities,
  National Association of Towns Townships
• - Comments to USTR, Fed. Register, August,
  2002

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2007 New Views in Congress

• Freshmen members dubious on trade
• Re-negotiating Andean agreements
• Resistance on Korea
• Democrats Statement of principles
• Opposition to renewing Fast Track

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Getting Specific Public Health Objectives for
2007CPATH and Major Public Health Groups

1. To assure democratic participation by public
   health and transparency in trade policy
2. To develop mutually beneficial trade
   relationships that create sustainable economic
   development
3. To recognize the legitimate exercise of national,
   regional and local government sovereignty to
   protect population health

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Getting Specific Public Health Objectives for
2007

1. To exclude tariff and nontariff provisions in
   trade agreements that address vital human
   services
2. To exclude tobacco and tobacco products
3. To exclude alcohol products
4. To eliminate intellectual property provisions
   related to pharmaceuticals from bilateral and
   regional negotiations and promote trade
   provisions which enable countries to exercise all
   flexibilities provided by the Doha Declaration

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Protect Global Health

• Center for Policy Analysis on Trade and Health
  (CPATH)
• Joseph Brenner MA
• Ellen R. Shaffer PhD MPH
• www.cpath.org
• cpath_at_cpath.org
• Join the Listserv send blank message to
• join-G-H_at_list.cpath.org
• Phone [phone]
• Fax [phone]