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Ensuring That Trade Agreements Promote Public Health

  • Date: Nov 03 2015
  • Policy Number: 201512

Key Words: Global Health, International Health, Health Services, Public Health Law

Abstract

Over the last two decades, a new generation of multilateral trade agreement negotiations has emerged. These negotiations seek to establish a new framework for global trade governance and a new model for future trade agreements with potential far-reaching implications for health and health care. Trade agreements produce economic benefits as well as damages. The effects of trade liberalization on health must be considered. Trade agreements must not and should not impede, impair, or otherwise hinder governments’ ability to enact and implement evidence-based policies to protect and improve public health. This policy updates and consolidates existing APHA policy statements on trade and health to provide a policy framework designed to ensure that trade agreements protect rather than undermine public health. 

Relationship to Existing APHA Policy Statements

  • APHA Policy Statement 20021: Int’l Trade Policy Issues of Improving Access to Drugs for Life-Threatening and Disabling Diseases 
  • APHA Policy Statement 200121: Threats to Global Health and Equity: The General Agreement on Trade in Services (GATS), and the Free Trade Area of the Americas (FTAA) 
  • APHA Policy Statement 9404: Trade Agreements and Environmental and Occupational Health 
  • APHA Policy Statement 8713: Limiting the Exportation of Tobacco Products 
  • APHA Policy Statement 9809: An International Tobacco Control Policy 
  • APHA Policy Statement 201111: Prioritizing Noncommunicable Disease Prevention and Treatment in Global Health 
  • APHA Policy Statement 200712: Toward a Healthy Sustainable Food System 
  • APHA Policy Statement 201210: Promoting Health Impact Assessment to Achieve Health in All Policies 

Problem Statement

While numerous bilateral and regional trade agreements have been negotiated over the last several decades, a new generation of large, multilateral negotiations has emerged with the goal of establishing a new global governance framework for trade and a model for future agreements. Trade agreements have historically yielded mixed economic results. Higher-income nations may benefit from access to less expensive goods and increased purchasing power. However, these countries also have experienced job loss and a decline in domestic sovereignty, which can exacerbate income inequality and undermine public health. Producing countries may benefit from a rise in demand, but this may not translate to a healthier population and may exacerbate income and health disparities. 

The most recent of the new generation of negotiations include the Trans Pacific Partnership (TPP), the Trans Atlantic Trade and Investment Partnership (TTIP), the Comprehensive Economic and Trade Agreement (CETA), the Regional Comprehensive Economic Partnership (RCEP), and the Trade in Services Agreement (TISA). These negotiations collectively include more than 60 countries representing approximately 60% of the global gross domestic product (GDP). Given their size, these agreements hold the potential to (re)shape public health and health care globally and have significant implications for efforts to address health inequities and the social determinants of health.[1–6] 

Recent trade agreement negotiations have emerged in the context of an agenda developed during the Uruguay round of negotiations in the 1980s and codified by the establishment of the World Trade Organization (WTO) in 1994. This agenda was characterized by corporate policy priorities in newly dominant areas of economic activity in developed nations: finance, services, and government as well as agriculture. While corporations have been able to establish policy priorities across sectors under the WTO, this new generation of negotiations allows potentially more expansive opportunities for corporations to do so; it also has the potential to undermine public health policies that have been adopted by the WTO. 

Current negotiations are notable for their lack of transparency. Draft texts of these agreements illustrate a broad mandate for negotiations. Negotiating texts are not publicly available under the pretense of protecting confidentiality of negotiations.[3] However, disparate access to negotiators and texts has been afforded to certain stakeholders through mechanisms such as industry-dominated trade advisory committees.[7] This lack of transparency impedes effective public health advocacy, stifles public debate, and is inconsistent with democratic principles. The sections to follow outline specific areas of concern around current negotiations.

Investor-state dispute settlement: The WTO provides mechanisms for governments to dispute alleged violations of WTO trade agreements, available to all 161 member nations. However, investor-state dispute settlement (ISDS), included in some existing bilateral and multilateral agreements, provides an additional mechanism for corporate investors to bring claims directly against governments outside of existing WTO structures and legal systems of accountability and to seek compensation for harm. The inclusion of ISDS in prior smaller scale trade agreements has been used to challenge various public health measures; notably in the last two decades, it has been used, for example, by Philip Morris to challenge evidence-based tobacco control measures in Uruguay[8] and Eli Lilly to seek compensation for patent infringement not recognized under Canadian law.[9,10] 

According to United Nations Conference on Trade and Development data, there had been more than 500 ISDS cases under existing trade agreements as of the end of 2013. Of these cases, 31% were adjudicated in favor of the investor and 26% were settled. Claimants from the European Union and the United States accounted for 75% of all cases.[11] 

The mere threat of a trade dispute may deter governments from adopting laws and regulations that might be susceptible to challenge by investors. This “regulatory chill” is compounded by the existence of ISDS, as there are fewer restraints on corporate actions. Corporations can benefit financially from delaying enactment of a government measure as an ISDS case proceeds, even if they ultimately lose. Uruguay’s experience provides a cautionary tale. When Uruguay adopted stronger cigarette packaging requirements—mandating that warning labels cover 80% rather than 50% of the cigarette package—the new labeling requirement was challenged under an ISDS provision of an existing Uruguay-Switzerland bilateral investment treaty.[8] Faced with a resource-intense legal battle, the Uruguay government initially backed down rather than defending an evidence-based tobacco policy and has since relied on a foreign donor to finance its ongoing legal defense. 

Inclusion of broad ISDS mechanisms in trade agreements may negatively impact public health by limiting governments’ ability to enact and implement public health policies across sectors, including but not limited to control of tobacco and alcohol, food and beverage regulations, access to medicines and health care services, environmental protection/climate change, and occupational/environmental health.[12,13] Less resourced countries are most disproportionately impacted by the threat of ISDS. Of great concern is that a decision on the part of governments to forestall implementation of public health policies might in turn facilitate the importation of dangerous products from countries with restrictions to countries without restrictions.

Access to medicines: Access to affordable medicines is critical in preventing and controlling the global burden of both communicable and noncommunicable diseases (NCDs). The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) established a set of common international rules governing the protection of intellectual property, including pharmaceutical patents. The aim of TRIPS safeguards and flexibilities (e.g., compulsory licensing) is to ensure that intellectual property protection does not supersede public health. The 2001 Ministerial Doha Declaration on TRIPS and Public Health affirmed that TRIPS “does not and should not prevent members from taking measures to protect public health” and recognized nations’ rights to issue compulsory licenses.  

International trade agreement negotiations increasingly include stronger intellectual property protections beyond those recognized under TRIPS. Such “TRIPS-plus” or “TRIPS-plus-plus” protections could have negative implications for the affordability and accessibility of medications.[3,14] These proposed rights include prolonged patent terms, pathways for secondary-use patents, and data exclusivity terms that extend beyond initial patents. Taken together, these policies make possible indefinite extensions of exclusionary rights on patented medical products, a practice termed “evergreening.”[15,16] 

Trade agreements could also hinder countries’ ability to negotiate affordable medicine prices by targeting therapeutic reference pricing and other key elements of successful pharmaceutical benefits programs such as Australia’s Pharmaceutical Benefits Scheme,[17,18] New Zealand’s Pharmaceutical Management Agency,[16,19] the United Kingdom’s National Health Service,[20] and the Veterans Administration drug purchasing system. 

Another issue that has emerged in trade agreement negotiations is patenting of diagnostic, therapeutic, and surgical techniques, which could threaten the availability of such techniques and their use by health professionals.[13,21–23] It is essential that an exception for patenting of diagnostic, therapeutic, and surgical techniques be incorporated into any and all agreements, similar to the language found in the U.S. Code (35 USC 287(c)), to prevent potential liability for patent infringement among health professionals performing procedures and otherwise providing care to patients.[24] Clinical trial data transparency may also be at stake in trade agreement negotiations. Inclusion of trade secret protection for clinical trial data in trade agreements could restrict independent analyses of data and potentially compromise patient safety.[25] 

Tobacco, alcohol, and obesogenic foods and beverages: Recognition of prevention and treatment of NCDs as a global health priority has, in parallel, identified trade agreements as “upstream drivers” of such diseases.[26] Through both direct legal challenges and indirect regulatory chill effects, ISDS provisions can and have been used to undermine many evidence-based interventions, including tobacco, alcohol, and obesogenic product control efforts, designed to prevent and control NCDs.[27] 

Trade agreements offer several additional potential avenues for industry to challenge or undermine tobacco control measures, including:

  • trademark protections
  • stakeholder provisions that could expand industry influence on policy-making
  • cross-border service provisions that could limit restrictions on advertising and licensing
  • technical barriers to trade provisions, which could interfere with governments’ ability to enact and implement tobacco control policies
  • nondiscrimination requirements used to protect tobacco company products and practices (e.g., clove cigarettes in Indonesia and cigarettes with particularly lethal additives in the United States)[28–32]

Failure to craft explicit and specific provisions that address each of these threats with certainty in order to exclude tobacco from trade agreements holds the potential to sabotage tobacco control efforts under the World Health Organization’s Framework Convention on Tobacco Control.[16,33] Similar to tobacco control efforts, alcohol control measures may also be targeted in trade agreement negotiations,[34] despite evidence that 4% of the global burden of disease is attributable to alcohol and the availability of effective interventions to prevent alcohol-associated morbidity and mortality.[35,36] 

Trade agreements may influence nutrition policies such as regulation of obesogenic foods and beverages.[37] Novel tariff reductions, foreign investment liberalization, and intellectual property protections, especially given the availability of ISDS mechanisms, all have the potential to undermine existing efforts to improve health and control NCDs.[38] Existing bilateral and regional trade agreements, including the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement, have opened markets such that many parties’ economies have seen an increase in the entry of transnational food companies and advertising of their products.[39] Government subsidies can lower the price of food commodities such as corn in the United States, for example, enabling US agribusiness to compete even in lower-income countries (e.g., Mexico) and thereby destabilizing entire agricultural systems. Unfortunately, transnational food products are often obesogenic because they are nutritionally poor, calorie dense, and high in fat, sodium, and sugar. The low cost and widespread availability of such products, together with targeted advertising and shifting cultural attitudes, have notably influenced food consumption patterns at the population level. Further expansion without regulation thus risks undermining efforts to control NCDs.[26] Uniquely, this also includes promotion of infant formula at the expense of breastfeeding,[40] which has been recognized as a “fundamental public health issue” by APHA and numerous medical and health organizations including the American Academy of Pediatrics, the American Academy of Family Physicians, and the American Congress of Obstetricians and Gynecologists. 

Health care services: The General Agreement on Trade in Services, a WTO-level agreement, currently prohibits government involvement in addressing several parameters related to quality of health care services and licensing and cross-border travel of health care workers. However, current trade agreement negotiations may affect the availability, accessibility, and use of health care coverage and services as well as the supply, distribution, credentialing/licensure, and training of health professionals.[41] Certain provisions, such as state-owned enterprise restrictions, may result in the privatization, commercialization, or “exportation” of health care systems and services. This would be detrimental given the well-supported association between increased free market involvement in health care and diminished coverage and access.[24,42–44]

Environmental protection, climate change, and occupational health: Trade policy may also threaten environmental protection and efforts to mitigate climate change.[1] Millions of deaths worldwide each year are attributable to air pollution secondary to reliance on fossil fuels. Without urgent action, climate change risks uncontrolled spread of deadly infectious diseases, food insecurity, natural disasters, flooding, and conflict, all with profound health implications.[45,46] Current trade negotiations may undermine national and global mitigation and adaption efforts under the United Nations Framework Convention on Climate Change. Other trade agreement provisions that have had negative consequences for public health include the following.

  • Labor rights, labor standards, and occupational health: Under existing trade agreements, including NAFTA, workers have experienced an erosion of social protections and collective bargaining rights with potential health implications.[47] Trade agreements must not weaken labor rights or protections.
  • Sanitary and phytosanitary measures: Efforts toward regulatory harmonization are often coupled with “downward” regulatory pressure to weaken existing sanitary and phytosanitary protections at the expense of public health.[48,49] 
  • Technical barriers to trade: Such barriers limit the nature of scientific public health evidence establishing threats to population health.
  • General agreements on trade in services: Such agreements prioritize corporate rights in services.
  • Government procurement agreements: These agreements subject certain government actions to trade rules.

Trade has not traditionally been an arena in which the public health community has been actively engaged in advocacy.[50] Some argue that the World Health Organization has not consistently coordinated with the WTO, and the organization has not been actively involved in current negotiations outside of the existing WTO framework despite a mandate under resolution WHA59.26 on international trade and health (2006) to provide support and coordination to member states.[51] However, recognizing the value of a health in all policies approach, it is increasingly critical that the international public health community advocate and engage in trade agreement negotiations and policies to protect and advance public health priorities.

Opposing Arguments/Evidence

Trade agreement proponents argue that trade liberalization can produce economic benefits that may directly improve health and/or outweigh potential harms to health. At least one model suggests that trade and economic development have had positive long-term effects on overall population health in the United States.[52] However, data and models demonstrating health benefits of trade agreements are limited. Models assessing the overall benefit of trade agreements currently in negotiation are similarly disputed. Projected economic benefits of current trade agreement negotiations vary, with some models projecting modest to significant economic growth while the vast majority suggest limited economic benefit.[22,53–55] Of note, it is unclear how these potential economic benefits would be distributed among the population. 

A purported benefit of stronger intellectual property protections is a greater incentive for innovation resulting in more novel medications. However, such claims have been completely refuted, and stronger intellectual property protection has been associated with higher drug costs, less access to medications, and a proliferation of slightly modified products of little or no therapeutic value created entirely to extend monopoly prices protected by patents.[14–16,56,57] 

It has been suggested that “exporting health” and improving health mobility and medical tourism may help control health care costs, particularly in the United States. However, such analyses focus almost exclusively on benefits for specific groups or parties to the agreement rather than analyzing health implications on a global scale. Thus, the benefits and possible harms of enhanced health and health care service mobility under these potential agreements remain unclear. 

Evidence-Based Strategies to Address the Problem

Current trade agreement negotiations threaten myriad evidence-based public health regulations, policies, and programs. Examples of specific evidence-based strategies to address the problem include the following:

  • Exceptions for the patenting of diagnostic, therapeutic, and surgical techniques modeled after 35 USC 287(c)
  • Exclusion of tobacco and alcohol control measures from all trade agreements
  • Limits on intellectual property protections to promote access to affordable medicines 

Alternative models of cross-border economic cooperation with the explicit aims of improving population health and involving health agencies in economic policies may hold the potential to protect and advance public health. 

Action Steps

This policy statement demonstrates APHA’s strong support for ensuring that trade agreements and trade policies promote and prioritize public health rather than undermining evidence-based public health policies and interventions. In this context, APHA:

  • Calls on the United States Trade Representative, Congress, all negotiating parties, and the international public health community to ensure that trade agreements protect, promote, and prioritize public health over commercial interests, when such commercial interests may undermine or threaten public health, and seek to ameliorate rather than exacerbate global health disparities and inequities.
  • Urges the United States Trade Representative, Congress, all negotiating parties, and the international public health community to ensure that trade agreements do not interfere with or otherwise compromise governments’ ability to regulate and protect public health and health care.[6] To this end, any ISDS mechanism should be eliminated from US trade proposals and rescinded from existing agreements. In the interim, government action to protect and promote health should not be subject to challenge through ISDS, and these actions should also be exempted from vulnerability through WTO disputes.
  • Urges the United States Trade Representative, Congress, and international trade negotiators to:
    • Advance and support proposals to carve out/exclude tobacco and alcohol control measures from all trade agreements
    • Ensure that the Framework Convention on Tobacco Control is recognized as controlling standards for tobacco-related disputes in trade agreements
  • Urges transparency and openness in all trade agreement negotiations, including appropriate and timely public access to negotiating texts and meaningful and equitable opportunities for stakeholder engagement and feedback. 
  • Calls on the United States Trade Representative and all parties to trade agreement negotiations to secure independent and comprehensive health and human rights impact assessments of any proposed agreement.
  • Urges the World Health Organization to fulfill its mandate under resolution WHA59.26 on international trade and health to provide support to member states and collaborate with international organizations to ensure policy coherence on trade and health at the regional and global levels.
  • Urges the United States Trade Representative, Congress, all negotiating parties, and the international public health community, including national public health associations and the World Federation of Public Health Associations, to support formal exemption of essential public services (e.g., health, education, social services, water, corrections) from all trade agreements.
  • Urges the United States Trade Representative, Congress, all negotiating parties, and the international public health community, including national public health associations and the WFPHA, to ensure that trade agreements do not create barriers to access to health care services or medicines. Potential barriers to access to safe and affordable medicines include (but are not limited to):
    • Patenting (or patent enforcement) of diagnostic, therapeutic, and surgical techniques
    • Evergreening, or patent protection for minor modifications of existing drugs
    • Patent linkage or other patent term adjustments that serve as a barrier to generic entry into the market
    • Data exclusivity for pharmaceutical products, including biologics
    • Any effort to undermine TRIPS safeguards or restrict TRIPS flexibilities, including compulsory licensing and parallel imports
    • Limits on clinical trial data transparency through trade secret or other intellectual property protections
    • Any intellectual property protections that compromise public health
  • Urges the United States Trade Representative, Congress, all negotiating parties, and the international public health community to ensure that trade agreements and trade policies promote environmental protection and support efforts to curb climate change, including national and global mitigation and adaptation efforts under the United Nations Framework Convention on Climate Change. 
  • Urges the United States Trade Representative, Congress, all negotiating parties, and the international public health community to oppose trade agreements and trade policies that would reduce public support for or facilitate commercialization of education.
  • Urges the United States Trade Representative, Congress, all negotiating parties, and the international public health community to ensure that trade agreements advance national and international labor rights and safe working conditions.
  • Encourages the United States Trade Representative, Congress, all negotiating parties, and the international public health community to ensure upward harmonization of environmental and occupational standards, labor rights, and working conditions.
  • Calls for the United States Trade Representative, Congress, and all negotiating parties to use trade agreements to encourage the development, use, and export of superior environmental and occupational technology.
  • Encourages the alliance of health professionals and affiliates across international borders, including the WFPHA, the World Health Professions Alliance, and other international professional associations, to collaboratively advocate for trade agreements and trade policies that safeguard and advance the interests of population health and supports the development of coalitions to coordinate this advocacy.
  • Urges Congress and all parties to existing trade agreements to rescind or modify these agreements to protect the health and human rights of affected populations according to the principles described in this policy statement.

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