Preamble

Executive summary

I.   Introduction and overview

II.  Globalization: What & For Whom?

III. The relationship between economic growth, trade liberalization and health

IV.  International trade agreements related to health and health services

   a) NAFTA

   b) WTO
      1. GATT
      2. TRIPS
      3. SPS & TBT
      4. GATS

V.  Changing partnerships, changing governance

VI. Towards a framework for identifying health impacts of trade and investment agreements

Conclusion

Notes

Bibliography



Inset:
If Power Follows Money...


Inset:
Retiring without the Rainforests?


Inset:
Globalization's Costs to Women in Developing Countries


Inset:
The "Grotesque Proportions" of Inequalities


Inset:
Whose Globalization? Whose Free Trade?


Inset:
Protecting Patents or Protecting Babies?


Inset:
Social Clauses and Financial Transaction Taxes


"Printable (23 pages 8"x11" or 21cmx27cm)"

Issue Paper

ECONOMIC GLOBALIZATION, TRADE LIBERALIZATION, GOVERNANCE AND HEALTH

Prepared by Ronald Labonte, Director, Saskatchewan Population Health and Evaluation Research Unit, Inc., with assistance from Matthew Sanger, Trade and Health Research Consultant and Pamela Thompson, INPRO Consulting Inc.

(October 2000)

PREAMBLE: In the spring of 2000, the Canadian Society for International Health (CSIH) Board identified the area of Trade and Health as a priority for advocacy activities of the Society. This issue paper, the first in this broad area, discusses recent developments in economic globalization, trade agreements and public governance, and the implications for health and human/social development.

EXECUTIVE SUMMARY: Globalization connects and creates interdependencies among people and organizations around the world. But not all forms of globalization promote health. This paper discusses some of what is known about the relationship between economic globalization and health, and the real and potential health effects of a number of key trade agreements. It is intended to enhance understanding and promote discussion among health and development professionals of the relationships between economic globalization, trade, governance and health. The paper does not cover these areas in depth, and much is still not known about the precise relationships. The paper, rather, provides an overview that highlights some key areas of concern, and refers the reader to additional resources for fuller discussion.

Three inter-related types of globalization--environmental, communicative and economic--are identified in the paper. Economic globalization, in which the business of nations is becoming more integrated, is the focus of this paper. Economic globalization is characterized by increased trade and investment liberalization (free trade), privatization of former public services and de-regulation of many former government powers. It is also associated with increasing disparities in wealth and power, both between nations and between different groups within nations, and between public and private sectors. New forms of "private/public" partnerships are arising in the wake of these shifts in where economic and political power reside. New forms of global governance are also occurring as UN agencies, national governments, multilateral organizations such as the World Trade Organization (WTO) and networks of civil society groups (aided in their organizing by "communicative globalization") struggle over the relationship between increasing the wealth-creating potential of more integrated global markets, and regulation of such market integration to effect more equitable wealth distribution and protect ecological sustainability.

There are many who claim that the benefits of economic globalization outweigh the costs, and that such globalization will eventually yield higher standards of living and new economic opportunities for people around the world, especially in developing nations. Empirically, the current evidence of this is weak, while there are many well documented negative effects associated with the current trend of liberalization, privatization and de-regulation. More specifically, current WTO processes and agreements favour the richer developed countries, and have failed to curb growing inequities within and between developed and developing countries.

CSIH is concerned especially that the current trade focus on the benefits of open markets (trade and investment liberalization) pays too little attention to trade-related health, social and environmental costs. CSIH does not oppose global trade. Rather, it supports development of a system of global governance that would ensure that such trade meets human and social development goals associated with greater equity in power and resources amongst citizens worldwide.

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I.     INTRODUCTION AND OVERVIEW

With the growth of the internet, new technologies, and the expanding global marketplace, people, goods and services are crossing borders at ever-increasing rates. Economic globalization, aided by the growth of new technologies, has provided new opportunities for economic growth. This has created enormous economic and social benefits to some countries, but not to others, and disproportionately to some groups within those countries. It has also reduced the regulatory authority of national and sub-national governments (the public sector) and increased the power and influence of transnational corporations (the private sector). The planet may be shrinking as far as business interests are concerned, but the gap between rich and poor within and between most nations is going in the opposite direction. This has profound implications for the health of people in both the developed and developing world. The CSIH is concerned about the real and potential negative health impacts of our current forms and practices of economic globalization. This paper is an attempt to begin mapping the territory of those concerns.

The paper begins with a discussion of the concept of globalization, its claimed benefits and costs, and the linkages between economic growth, trade and investment liberalization and health. This discussion is fairly broad in nature, and there remains considerable disagreement among researchers and multilateral agencies over whether (and how) economic growth and trade liberalization improve or harm human health. The paper next discusses several key trade agreements for their real and potential health implications. This discussion includes the North American Free Trade Agreement (NAFTA), of particular concern to Canadians, and five specific trade agreements of the WTO, partly modeled after NAFTA, that are of more general concern to health and development globally. The paper then moves briefly to describe a concomitant rise in "global private/public partnerships." It concludes with a discussion of the concept of governance, and what may be an emerging new form of global governance comprised of multiple actors and organizations representing government, business and civil society interests. It provides some examples of optimistic initiatives in this area.

Insets throughout the paper, such as the one below on "If Power Follows Money," are intended to provide snapshots of key concerns (or specific case examples) related to economic globalization and health.

If Power Follows Money...

The net worth of the world’s richest 358 people in 1997 was greater than the combined net worth of the world’s poorest 2.3 billion people. By 1998, the gap had grown further so that the richest 200 individuals had net incomes surpassing the world’s poorest 2.5 billion people. (WHO, 1997, Health and Environment in Sustainable Development: Five Years After the Earth Summit. Geneva: WHO & UNDP, 1999, Human Development Report. Toronto: Oxford University Press.)

The size and integration of transnational corporations has grown dramatically. Of the world’s 100 largest economies, only 50 are nations. The other 50 are transnational companies, and the consolidation of economic power within private transnational companies is increasing rapidly. According to one American business futurist, nations will be defunct in 10 years time and global corporations should begin setting up their own embassies in each others’ headquarters to establish social and political policies. (New Internationalist, November 1997, Globe and Mail/Report on Business, Annual Report 1998)
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II.     GLOBALIZATION: WHAT AND FOR WHOM?

There is little agreement about what precisely globalization means, except that it describes both the fact, and the perception, that nations, businesses and people are becoming more connected and interdependent across the globe. In discussing this paper, members of the CSIH Advocacy Committee found it helpful to distinguish between three main types of globalization: a) environmental; b) communicative; and c) economic.

a.     Environmental globalization is the recognition that an environmental incident or impact that happens in one region or country is not restricted to that area, but has the potential to affect the entire world, and all life in it. One example is atmospheric pollutants that are transported over long distances and affect the health and resource bases of populations thousands of kilometers away. Some pollutants in the Arctic, such as DDT, PCBs and heavy metals (mercury) have been sourced from as far away as China, India and Guatemala1. Toxic substances have been linked to a number of health concerns including cell mutations, cancer, birth defects, damage to the nervous system and poor cognitive development in children. Another example is climate change related, in part, to the destroying and cutting down of tropical rain forests (e.g. in Brazil).2 Of more recent but increasing concern is the global spread of infections. Aided by the mis-use of antibiotics and development of fully resistant strains, there is considerable worry that we will soon experience, on a planetary scale, a dramatic rise in "old" illnesses once thought vanquished. Environmental globalization is, of course, related to economic globalization, as the inset on "Retiring Without the Rainforests?" describes.

Retiring Without the Rainforests?
(Consider three different stories from the January 2nd, 1999 edition of Canada’s national newspaper, The Globe and Mail.)


The first story, in the business section, recounted how Brazil had experienced the withdrawal of “hundreds of millions of US dollars a day” by “skittish portfolio investors.” This rapid capital outflow (preceded by rapid capital inflow and aided by increased liberalization in investment) sent Brazil’s currency into frenzied fluctuation. The government threw all its currency reserves into unsuccessful efforts to stabilize it. The IMF and other lenders sent Brazil $41 billion US in additional emergency aid, but with very big strings attached: Cut debt. Reduce public spending. Privatize government services. Restore investor confidence by making Brazil safe again for foreign investors.

A second story described how Brazil’s IMF rescue package required the government to reduce spending on environmental programs by 2/3rds. As a result, Brazil lost tens of millions in support from other countries for a “centrepiece” project to help save what remains of the Amazon rain forest. Trees help to fix carbon and reduce the effects of greenhouse warming. Further destruction of the Amazon rain forest will only worsen what, in a third disparate story, the newspaper reported as 1998's “freakish weather worldwide.”

It’s a matter of connecting the dots, not only in newspaper stories but in our personal lives. We might faithfully recycle everything at work and home, use only low-watt bulbs and generally try to tread more softly on the planet. We might donate generously to groups aiding the poorest in our own communities. But in a small yet direct way, through some of the equity or derivative funds in which the retirement for many of us is likely invested, we are also banking our later years on the despoiling of the Brazilian rainforest, and the impoverishment of an ever growing number of our planetary co-habitants.

b.     Communicative globalization refers to the rapid growth of communications technology and the internet, which are capable of linking people, information and ideas around the globe. Such technologies impact on culture with both positive and negative effects, and have been instrumental in increasing civil society engagement on issues of trade and health. But such technologies are not available to all on an equitable basis. There is also concern that the "new technology/information economy" will increasingly exclude larger numbers of people from participation, as access to, and costs for, "upskilling" will restrict the wealth generated by this economy to a shrinking number of elites within developed countries. (A proper discussion of this aspect of globalization, however, is beyond the scope of this paper, and readers are referred to Larkin3 for more detail.)

c.     Economic globalization described the integration of economic activities that were once more national or regional in scale to planet-wide functioning.4 This is not a new phenomenon, but has been a characteristic of capitalist economic expansion for at least a century or longer.5 The scale of this expansion, especially in speculative finance or "hot money," is new. So, too, is the shift in corporate structure from a multinational corporation (one company selling its product in many countries) to a transnational corporation (one company with productive units spread throughout many countries). Economic globalization has also been accompanied by a new regime in trade and investment liberalization. This regime, seen in NAFTA and WTO agreements, seeks to reduce tariffs and regulatory barriers to enable the free flow of goods, services and investment or speculative capital across national boundaries. It is seeking to create a "rules-bound" global economic market. Economic globalization has a number of claimed benefits, as well as a number of claimed costs. These are summarized in Table 1 below:

(Sources: Wallach & Sforza 1999; Larkin, 1999: Report of World Summit on Social Development, 1995: Canadian Council for International Cooperation, November 1999)
CLAIMED BENEFITS CLAIMED COSTS
Higher living standard Growing inequalities between the developed/richer nations and the developing/poorer nations (e.g. reduced GNPs and increased infant and maternal mortality rates in poorer developing nations) and to growing inequalities within developed and developing nations
Faster economic growth and new economic opportunities for individuals Greater vulnerability and unpredictability for many individuals (e.g. higher rates of crime, unsafe working environments [especially for women] and unemployment)
Accelerated innovation and diffusion of technology and management skills Benefits highly concentrated among a small number of developed countries
New economic opportunities for countries May place at risk the sovereignty of states and integrity of cultures

But economic globalization is not truly global in any equitable sense. Most of the recent increase in corporate growth, integration, investment and trade has taken place in or between the so-called Quad (the European Union, the United States, Japan and Canada). Some groups are benefitting, arguably at the cost of others, as the inset on "Globalization’s Costs to Women in Developing Countries" describes.

Globalization’s Costs to Women in Developing Countries

Export processing zones (common in many Latin American countries) consist of “many factories employing large numbers of workers, mostly women, to assemble electronics or sew garments using imported materials. Their products are then exported duty free to the large consumer markets of North America and Europe. By keeping unions out, the young women are forced to work 10 to 12 hour days on assembly lines for as little as 50 cents an hour. They are also kept in the dark about local labour laws and what their rights are. When they try to organize, they often lose their jobs.

If the costs are too high in El Salvador, investors can move to Guatemala, Colombia or Brazil where governments offer even cheaper labour and poorer working conditions. Through free trade and investment agreements, the cards are stacked in favor of investors looking for the lowest productions costs.” (Labour and Free Trade in the Americas, http://www.web.net/comfront/af-lab.htm , p. 1)

The issue of concern is not globalization in and of itself, but globalization for whom?

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III.     THE RELATIONSHIP BETWEEN ECONOMIC GROWTH, TRADE LIBERALIZATION AND
          HEALTH

To answer this question, we need first to ask examine if there is any relationship between increased global trade (liberalization) and economic growth (especially for poorer countries, or the poor within them), and if economic growth is sufficient, in itself, to promote health.

As with many aspects of economic globalization, there is no consensus on the nature of the connection between trade, economic growth and health. As Table 1 summarized, proponents of more liberalized trade and investment generally claim that the overall health impacts are positive: increased trade raises productivity levels and leads to higher incomes and better standards of living, including better health status. Critics often claim that the opposite is true: there is no conclusive empirical evidence that liberalized trade and investment has raised incomes and standards of living; and the benefit of any increase in average per capita incomes over the past 25 years has been more than offset by the negative health impacts associated with dramatic increases in income inequality within Canada and other nations, and between nations.

These two opposing positions are bound up in the larger debate about the relationship between trade, economic growth and poverty. Since the late 1940s, economic growth (usually defined as per capita increases in the Gross National Product [GNP] of countries) was believed to be the way to reduce inequalities between developed and developing countries, as well as between the rich and poor within countries. Since the 1980s, accelerating economic growth has been at the heart of international trade and investment policies. This "trickle down" theory of economics is based on the assumption that increasing a country’s economic growth, which is generally concentrated among the richer families in a society, would "trickle down" and also benefit the poor. A number of recent studies purport to show that increased trade leads to higher growth rates and an alleviation of poverty. But the empirical evidence they present is not convincing.

The “Grotesque Proportions” of Inequalities

The 1999 UNDP Human Development Report described the rapidly growing gap between the rich and poor (within and between) countries as reaching “grotesque proportions.” Such trends are attributed, in part, to “liberalized trade and speculative investment practices” (Labonte, November 8, 1999, p. 12). An example of this is Mexico, where poverty rates more than doubled in the two years following the collapse of the Mexican peso. The Mexican currency crisis, as the currency crisis a few years later in Brazil, was aided by de-regulation (liberalization) of international investment flows. Although it plunged more than half of the population into “deep poverty” (Wallach, 1997), it also increased the fortunes of Mexico’ (20 or so) billionaire families.

The WTO recently commissioned two economists to review studies of the relationship between trade, growth and poverty.6 The study acknowledges that the "income gap between rich and poor countries has increased in recent decades," and concludes that "trade can be a factor in bringing about convergence in incomes between countries." The reasoning here is that countries that trade a great deal with each other will start to resemble each other in the amount and distribution of income within them. But per capita incomes have not converged at a higher level during the recent period of trade liberalization. Only among the poorest countries has there been some income convergence. The direction, tragically, has been downward, as the authors themselves state that "the relatively better-off among the extreme poor have slipped backward as a result of negative growth." (Economists presume that economies always grow. If a country has more wealth this year than last year, it is positive growth. If it has less wealth than before, it is negative growth.)

It is telling that the WTO could not marshal stronger empirical evidence in a study designed to counter post-Seattle scepticism about the benefits of trade and investment liberalization. An independent review of recent empirical studies concludes that there is no unambiguous relationship between trade liberalization and growth. The authors of this study conclude that "the nature of the relationship between trade policy and economic growth remains very much an open question. The issue is far from having been settled on empirical grounds."7 Instead of devising new ways to show that actual experience conforms to economic theory, the authors argue that research should focus on the economic impacts of specific trade policies in real world situations. They also caution that:

"...the tendency to overstate the systematic evidence in favour of trade openness has had a substantial impact on policy around the world. What dispute is the view, increasingly common, that integration into the world economy is such a potent force for economic growth that it can effectively substitute for a development strategy."8

In other words, we cannot assume that trade liberalization policies necessarily lead to economic growth.

Ironically, the very national development policies that may lead to economic growth in poorer countries were recently rejected by the WTO. An Appellate Body ruled against the use of import protections by developing nations for purposes of improving poor living standards, making a distinction between "development policy" economic policy to benefit the poor) and "macro-economic policy" (trade liberalization), giving the latter superordinancy in WTO disputes.9

Even if trade liberalization did lead to economic growth, we cannot assume that economic growth, in and of itself, is beneficial to health and social wellbeing.

Indeed, economic growth associated with increasing social inequity can be hazardous to social-wellbeing, people’s health and environmental sustainability. Among developed countries it is not the richest societies that have the best health, but those that have more equitable income distribution between rich and poor.10 An analysis of Canadian data "shows conclusively that reducing relative poverty and narrowing income distribution are likely to have a much greater effect on improving well-being than increasing aggregate wealth."11

Amartya Sen, winner of the Nobel Prize in Economics, notes that having an increased income does not, in itself, guarantee the freedom of individuals within a society to live long and healthy lives. He cites as examples people living in South Africa or Brazil who are richer in terms of per capita GNP than citizens of China or Kerala State in India, but "the latter have very substantially higher life expectancies than do the former."12 While "growth of GNP or of individual incomes can be very important as means to expanding the freedoms enjoyed by the members of the society," such freedoms "depend also on other determinants, such as social and economic arrangements (for example, facilities for education and health care) as well as political and civil rights (for example, the liberty to participate in public discussion and scrutiny)."13

The goal of development,14 then, should not be seen as increasing per capita wealth in the developed and developing world. Rather, economic development (including but not restricted to increases in per capita wealth) should be regarded as one of many means to achieve the goal of development as quality of life.15 A "people-centred" development model that recognizes the interrelationships between social, environmental, economic and political conditions, is supported by the CSIH. This approach values equity,16 the participation of individuals from all levels of society and "sustainable livelihoods", as the basis on which development can be achieved.17

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IV.     INTERNATIONAL TRADE AGREEMENTS RELATED TO HEALTH AND HEALTH
          SERVICES

There is little evidence linking increased trade with economic growth, at least for poorer nations or poorer people. There is also little evidence linking increased economic growth to improved health, at least beyond $5,000 to $8,000 (US) in GNP/capita. What, then, are the real or potential threats to health that exist in specific trade liberalization agreements? This section addressed this question by briefly reviewing the main features of the NAFTA and major WTO agreements, highlighting key concerns related to health and health services.

  1.      NAFTA: North American Free Trade Agreement
  2. NAFTA was a ground-breaking trade agreement when it came into effect in 1994. By including "chapters" (trade agreement jargon for specific agreement sections) on investment, trade in services, intellectual property, and so-called "technical barriers to trade," it extended trade obligations into areas of national policy and regulation previously considered beyond the reach of trade negotiators. In many respects, these NAFTA provisions influenced the 1994 establishment the WTO.18

    NAFTA rules on "technical barriers to trade" apply to any standards which may directly or indirectly affect trade in goods or services. These include environmental regulations, consumer protection, and any health protection measures related to food safety and disease and pest control (known as sanitary and phytosanitary measures). NAFTA requires that any standards be non-discriminatory. This means that imported goods and services are subject to the same standards as equivalent domestic goods and services. For sanitary and phytosanitary measures (or SPS measures as they are referred to), NAFTA goes further and requires that they be justified by a form of risk assessment that narrowly interprets what constitutes scientific proof of potential health harm. Based on this assessment, governments are required to enact only the most cost-effective health protection measures, and must show that an SPS measure "is applied only to the extent necessary to meet its appropriate level of protection."19 This means that foreign firms can challenge domestic health protection regulations on the basis that they are more protective of health than the firms think they need to be.

    NAFTA was the first international trade agreement to include rules regarding intellectual property rights. These rules strengthen private monopoly rights established by trademarks, copyright, patents and other measures. In NAFTA, Canada formalized its previous agreement with the United States to extend patent for prescription drugs to at least 20 years.20 Other NAFTA provisions required further amendments to Canada’s legislation for compulsory licensing of pharmaceutical drugs, dramatically reducing competition from generic drug manufacturers. With this added protection, the cost of new pharmaceutical drugs has soared. High annual increases in spending on prescription drugs – driven by an aging population, shifting disease patterns, new therapies and changing practices as well as by higher prices – has been one of the major pressures on provincial health budgets through the 1990s.21 As drug prices increase, the ability of governments to provide other services that may be more effective in promoting health, especially for poorer groups, declines.

    The NAFTA investment chapter pushed the boundaries of international trade agreements even further. It established new rights of investors to claim compensation for government measures which may affect the value of their investment. Canada’s investment obligations under this NAFTA chapter have forced the federal government to repeal two significant public health measures: plain packaging for cigarettes, and a ban on the gasoline additive, MMT. Both cases illustrate how far Canada’s NAFTA obligations already extend "behind the border" into domestic health and environment policy.

    The government let its plain packaging legislation die after representatives of Phillip Morris International and R.J. Reynolds Tobacco International argued that it constituted an expropriation of assets, violating NAFTA investment and intellectual property obligations.22 The federal government repealed its MMT ban and paid US$13 million in compensation after Ethyl Corporation argued, again on the strength of the NAFTA investment chapter, that the ban had the effect of expropriating its assets even if there was no "taking" in the classic understanding of expropriation.23 (The Canadian MMT ban did not take from Ethyl Corporation any tangible goods, property or money; it only prevented Ethyl Corporation from being able to earn potential profit on MMT sales in the future.)

    Both these NAFTA challenges achieved their goal of overturning a public health measure, although neither went to a dispute panel. Canadian trade officials frequently claim that Canada has "reserved" health and social services from NAFTA, meaning these services are excluded from the agreement.24 The federal government’s readiness to settle the plain-packaging and MMT cases prior to a panel decision, however, means that the effectiveness of Canada’s reservation for health and social services remain untested. Moreover, Canada’s reservation for health and social services is diminished by increasing commercial presence in the financing and delivery of our health services.

    There are now strong grounds to fear that other NAFTA provisions could open up Canada’s not-for-profit hospital sector to commercial competition. Legislation in Alberta allows the provincial government to license for-profit hospitals ("approved surgical facilities") to provide insured health services for which they can charge private fees in addition to the fees received from the provincial health insurance plan. In the absence of federal sanctions to explicitly withdraw federal funding used by Alberta to fund commercial health services, a U.S. or Mexican commercial health care provider wishing to operate in any other province could claim a "national treatment" right on the basis that such a right exists for foreign health care investors in Alberta.25 ("National treatment" is at the heart of all free trade agreements, and means that the goods or services from another country are treated no differently in law or regulation than are domestic goods or services.)

    The Government of Canada now has misgivings about the NAFTA investment provisions, particularly its investor-state dispute resolution mechanism and its broad definition of expropriation. There is no evidence, however, that Canada has had any success in negotiating favourable changes to this part of NAFTA.

  3.      WTO: World Trade Organization
  4. The World Trade Organization was created in 1995 following the conclusion of the Uruguay Round of negotiations. It succeeded the secretariat which had developed to administer the General Agreement on Tariffs and Trade (GATT), which was first negotiated in 1947, and its associated trade agreements.26 The creation of the WTO marked a new era in multilateral trade and investment for a number of reasons. It was part of a single package which included dramatic reductions in tariffs on goods and sweeping new agreements to establish rules on services and intellectual property rights. Most importantly, all member countries agreed to a legally binding mechanism for resolving trade disputes. As of October 2000, 138 countries were members of the WTO. China is expected to soon gain membership.

    International trade ministers from each member country meet every two years in a Ministerial Conference which is the WTO’s highest governing body. Ongoing operations of the WTO are overseen by the General Council, composed of senior representatives of each government. Canada’s Ambassador to the WTO is Sergio Marchi, former Minister of International Trade. Other important bodies include the Councils responsible for trade in goods, for trade in services and for intellectual property rights. Canada currently chairs the Council for Trade in Services and thus plays a pivotal role in the GATS (General Agreement on Trade in Services) negotiations.

    Formal decisions in the WTO governing bodies are normally taken by consensus, and in some cases by two-thirds or three-quarter majority votes. In practice, however, the business of the WTO has been determined largely by the countries with the largest economic and political clout. Canada has gained honorary membership in "the Quad" group of countries (also including the European Union, Japan and the United States) which meets regularly to discuss outstanding issues and determine the agenda of future negotiations.

    Countries of the South, including such large economic powers as India and Brazil, have challenged the influence of the Quad. The inability of the WTO to develop a more inclusive and transparent process also contributed to the failure of the Seattle Ministerial meeting in December 1999. Since the Seattle WTO meetings, countries of the South have taken a more activist role, and the WTO Secretariat has made a number of initiatives to better integrate them into the organization. North-South differences, however, remain a major impediment to a new round of multilateral trade negotiations.

    The main functions of the WTO are:

      • To oversee implementing and administering WTO agreements.
      • To provide a forum for negotiations.

    At the Seattle Ministerial Conference, the WTO was unsuccessful in initiating a new round of multilateral trade negotiations. The WTO is currently most active in the mandated negotiations on trade in services (GATS).

      • To provide a dispute settlement mechanism.

    In contrast to the voluntary and negotiated process of the GATT, similar to that used by almost all UN agreements and declarations on environmental protection, human rights, labour rights and so on, the decisions of WTO dispute settlement panels are legally binding. Trade panels are composed of members drawn from a roster of international trade experts. Their proceedings are kept secret. Member countries are obliged to alter domestic legislation or other measures found to be inconsistent with their trade commitments, or pay compensation or face retaliatory trade action. Over 205 trade disputes have been taken to the WTO since its creation in 1995.

    Five specific WTO agreements have implications for health. They are:

    1. the General Agreement on Tariffs and Trade (GATT)
    2. the agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS);
    3. the agreement on the application of Sanitary and Phytosanitary measures (SPS);
    4. the agreement on Technical Barriers to Trade (TBT); and
    5. the General Agreement on Trade in Services (GATS).

    These five agreements and their implications for human health are discussed below:

    1)     GATT: General Agreement on Tariffs and Trade

    As the original multilateral trade agreement, the GATT rules have served as a model for subsequent WTO agreements. Most fundamental is the rule, or "core discipline" in trade agreement language, of "non-discrimination." Member countries commit to the principle of "national treatment" -- that goods of another country be treated the same as domestic goods -- and the principle of "most favoured nation" -- that the goods of all member countries receive the best level of treatment provided to the goods of any other country. Prior to this, countries entered trading arrangements in which goods from one nation would be given preferential treatment (lower tariffs or import quotas) than similar goods from another nation. Another core discipline is the prohibition on "quantitative restrictions," such as quotas and licenses, which regulate imports and exports by volume, as opposed to price. These core disciplines have been adapted and applied to trade in services, and in numerous regional trade agreements including NAFTA.

    Certain GATT exceptions have also served as a model for other trade agreements. These provisions specify the conditions under which member countries may act inconsistently with their trade obligations. GATT Article XX(b) permits WTO members to violate GATT rules in cases where a law, regulation or other measure is "necessary to protect human, animal or plant life or health." Trade dispute panels have interpreted this exception so narrowly over the past 53 years that all attempts to shield a government measure on public health grounds were unsuccessful until September 2000, when a WTO panel rejected Canada’s complaint regarding a French ban on asbestos products. In that case, the panel ruled that the French ban violated the GATT non-discrimination rules but was justified to safeguard public health. The Canadian government, however, will be appealing this ruling before the WTO appeal body.27

    Whose Globalization? Whose Free Trade?

    The World Bank conservatively estimates that OECD tariffs and subsidies in agriculture, labour-intensive manufacturing (especially textiles) and services “cause annual losses in welfare of $20 billion in developing countries, equivalent to about 40% of aid in 1998.” (World Bank, World Development Report 2000/2001, Attacking Poverty, p.11) Worldwide, the United Nations Commission on Trade and Development estimates the annual income loss to poorer nations due to continuing protectionist measured by developed nations at about $700 billion.

    (Source: World Disasters Report. Focus on Public Health. International Federation of Red Cross and Red Crescent Societies, 1999, p. 138.)

    To a large extent, trade conflicts between North and South centre on the GATT and associated agreements on agriculture and textiles. Countries of the south charge that priority has been given to reducing tariffs and opening markets for manufactured goods, to the benefit of the Northern exporters of those goods. In contrast, the Northern industrialized world maintains relatively high tariffs and other barriers to imports of agricultural products and clothing and textiles exported by countries of the South. This disparity underlies much of the north-south tension within the WTO.

    Least developed countries, with 10% of the world’s people, account for 0.3% of the world trade, only half of their share two decades ago when the push to global trade first began in earnest.28 Foreign investments, frequently cited as engines for growth, take place mostly between North America, Europe and Japan, which together, with China, receive more than 90% of foreign direct investments. The rest of the world, with 70% of population receives less than 10%. Despite estimates of global income growth of almost $500 billion between 1995 and 2001 due to liberalized trade and investment, all of this will go to wealthy countries. Lesser developed countries will lose an estimated $600 million over their current levels of income (Asia, parts of Latin America). Sub-Saharan Africa is estimated to lose over $1.2 billion.29 For developing countries (excluding China) the average trade deficit in the 1990s was higher than in the 1970s, while average economic growth rate was lower by 2 percentage points.30 The 1999 UNDP Human Development Report noted that those developing countries most integrated into global trading markets were actually faring worse economically.

    2)      TRIPS: Intellectual Property Rights

    The TRIPS agreement sets minimum standards for trademarks, copyrights, patents and industrial designs. Like the intellectual property provisions of the NAFTA, TRIPS requires 20-year patent protection for pharmaceutical drugs. In September 2000 Canada lost its appeal of a WTO panel ruling, requiring it to extend the term of patents filed before Canada’s Patent Act was amended in 1989. Generic drug manufacturers estimate that this change, and others mandated by the WTO panel, could cost Canadian consumers and governments as much as $200 million a year in higher prices for prescription drugs. This year marks the first time in Canada that public spending on pharmaceuticals now exceeds public spending on physician services.

    The TRIPS agreement has implications for global inequalities in access to vaccines and drugs. Will patent protection enforced by the WTO lead to the development of new drugs for diseases primarily affecting the poor in developing countries or will it continue to limit the access of poorer countries to needed drugs by increasing prices ( e.g. for HIV medicines)? Serious concerns have been raised about the patenting of biological materials. Shiva31 believes the TRIPS agreement has enabled transnational corporations to conduct large-scale piracy of biological wealth and intellectual knowledge, such as medicinal plants, from the Third World. According to one World Bank study, "in 1990, world sales of medicines derived from plants discovered by indigenous peoples were estimated at $43 billion, only a tiny fraction went towards those who had preserved the traditional knowledge of these medicinal plants or to the countries where the plants were found."32

    Protecting Patents or Protecting Babies?

    In 1983, Guatemala, in an attempt to reduce its infant mortality rate, passed a law and issued regulations to encourage new mothers to breastfeed their babies and to understand the health threats to their babies of using formula as a substitute for breast milk. The law, which implemented the terms of the WHO Code of Marketing of Breast-Milk Substitutes, included prohibitions on the use of words like “equivalent to breastmilk” or “humanized breastmilk”. To increase accessibility to illiterate people, Guatemala’s regulations and the WHO code also included prohibitions against visual images (e.g. logos) of infants that “idealize the use of bottle feeding”.

    The Gerber Food company has a trademarked logo that includes the picture of a “pudgy” baby. In response to the Guatemalan law, a Vice President of Gerber wrote a letter to Guatmala’s president threatening trade sanctions. Gerber was potentially in violation of the labeling law on a number of fronts (e.g. allegedly marketing formula to new mothers in hospitals and providing free samples to day care centers and doctors). They also refused to remove the Gerber baby from their label. After a number of legal challenges, in December 1993, Gerber filed a statement with the US trade representative that encouraged suspension of Guatemala’s General System of Preferences (GSP) benefits because the labeling law was a de facto expropriation of Gerber’s Trademark. The legal battles continued and in 1995, the Guatemalan government “buckled under” to Gerber’s threats of WTO action under the TRIPS agreement and changed their law to make imported baby food products exempt from Guatemala’s “stringent infant food labeling policy”. (Wallech & Sforza, 1998, p. 115-117)

    The TRIPS agreement, as with other WTO agreements, has also been used to overturn other unenforceable multilateral agreements intended to improve public health, as the inset on "Protecting Patents or Protecting Babies?" describes.

    3)      TBT: Technical Barriers to Trade, and SPS: Sanitary and Phytosanitary Measures

    The TBT and SPS are separate agreements which both deal with environmental protection, food safety, consumer protection and health protection. Both agreements set strict criteria for national laws, regulations and other measures in these areas. In addition to being non-discriminatory, measures must pass a "necessity test" and demonstrate that the chosen measure is the least trade restrictive option available to the government.

    A continuing source of debate is the degree of scientific certainty required to justify a health protection measure. The SPS requires that standards be based on scientific evidence and a systematic assessment of risk, but makes some provision for cases where there is insufficient scientific evidence. Health and environmental advocates have urged that this provision be applied consistently with the precautionary principle, which holds that lack of full scientific certainty should not be a reason to delay action to prevent possible harm. Trade dispute panels, however, have opted for a more narrow interpretation. In a landmark case, the WTO panel rejected the precautionary principle and decided against an EU ban on the import of beef produced with growth hormones, which had been imposed due to concerns about the health effects of consuming bovine growth hormones.

    The TBT agreement affects the labeling, packaging, production and quality standards of foodstuffs, biological agents and pharmaceuticals. Like other WTO agreements, its non-discrimination rules stipulate that "products must be compared to ‘like’ products without considering production methods or practices." This creates a bias against adopting health and safety regulations if they add to the costs of production.33

    4)      GATS: General Agreement on Trade in Services

    The GATS is a path-breaking agreement which extends trade rules deep into areas of domestic policy. It goes beyond the GATT model to cover government measures related to investment as well as trade and a sweeping range of so-called non-tarrif barriers to trade in services. Whereas other WTO agreements are likely to affect health largely through their impacts on health determining conditions, the GATS may directly affect the public health care services provided to Canadians.

    The federal government has repeatedly reassured Canadians that public health care services will not be affected by WTO negotiations. For instance, the Minister of International Trade recently told a Parliamentary Committee that, "public health and education are not on the table in any international trade negotiations. My government will maintain our right and ability to set and maintain the principles of our public health and education."34

    The novelty and complexity of the GATS agreement, however, make it very difficult to determine the implications of the existing GATS rules for health services. Canada is also engaged in a set of sweeping negotiations which will further extend the reach of the GATS rules. There are strong grounds to fear that these negotiations will lead to a reduction in Canada’s ability to regulate how health services are provided.

    The following features of the GATS are significant for health:

    • All services, including health services, are covered by the general GATS rules. These rules include a commitment to provide the same level of treatment to all foreign investors. If the federal government permits a single province to allow foreign commercial health care providers to operate in its territory, this rule could require the same treatment throughout Canada.35


    • All countries have committed to increase the coverage of the national treatment and market access rules, which currently do not cover Canadian health services. Other countries, however, have already committed to broader coverage of their own health services. Because of this, they can be expected to press hard for further coverage of Canadian health services. Trade negotiators, eager to accelerate the GATS negotiations and conscious of the political sensitivity of making specific commitments in certain areas, have also devised a number of approaches which could extend coverage of health services without necessarily making explicit changes to Canada’s current exclusion of health services.


    • As well as extending the coverage of existing rules, GATS negotiations are mandated to develop new trade rules affecting domestic regulation. Such rules have potentially broad implications for health services. Health measures that could be covered range from qualifications required for accreditation and certification of health professionals, to licensing of hospitals, health clinics and other facilities, to performance standards and codes of ethics for health practitioners.

    As chair of the WTO Services 2000 negotiations, the Government of Canada is working hard to further deepen and extend the reach of the GATS agreement. All service sectors, including health services, are on the table in these negotiations that are expected to conclude in December 2002.

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V.     CHANGING PARTNERSHIPS, CHANGING GOVERNANCE

The growth in trade liberalization is accompanied by a weakening in nation states’ abilities to regulate economic activity for public good outcomes, i.e., wealth redistribution and environmental protection. Nation states are "still the prime, potential depositor(ies) of democracy" but they are becoming "less capable of ‘protecting’ their societies or of projecting effective international action."36 Perhaps unsurprisingly, then has been a parallel growth in the call for, and development of, "new" forms of public/private partnerships.

The temptation for governments and the UN to engage in such partnerships, particularly in international work, is great. Over the past 10 years, governments of many industrialized countries (including Canada) have reduced the percentage of their GDPs they contribute to international development. More of their limited funding has been used to provide immediate relief in crisis situations such as wars, famines and floods, leaving smaller amounts of funding available to address longer-term development. The UN continues to be in financial crisis. Meanwhile, individuals are accruing enormous wealth through economic globalization and some are establishing large, privately funded foundations/philanthropies that support development projects. The budget of the health program of the Gates Foundation, for example, will soon equal that of the entire World Health Organization.37 (Kickbusch, 1999, p. 8). Such philanthropies are not politically accountable to a larger public. By dint of their size, they are effectively determining the course of what had been once democratically determined development choices and health investment choices.

There are a number of potential benefits to the new forms of Global Public-Private Partnerships ( GPPPs), particularly for the UN and its many agencies (Buse and Walt, Part One, 2000). These include:

  • enabling the UN to fulfill its mandates and functions in a time of zero growth budgets;
  • bestowing authority and legitimacy on the UN by association with powerful corporate actors; and
  • enabling UN agencies to leverage advice and financing from the private sector.
  • Potential benefits to the private sector of such partnerships are similar:

  • increased influence at the national level by gaining access to information, institutions and policy-makers through the UN system;
  • direct financial benefits through market expansion and tax breaks;
  • increased influence in the global arena; and
  • increased legitimacy and authority through association with the UN. (Buse & Walt, p. 556).
  • These private sector benefits have caused many observers concern, especially those who see a potential for conflict of interest between development and governance for common good outcomes, and the economic goals that drive private corporations. In an era of increasing economic globalization, weakening of national state rights and private/public partnerships, is there also a danger of UN organizations losing their "integrity and impartiality...as global bodies."38

    Non-governmental organizations (NGOs) and other members of civil society,39 as well as private corporations and philanthropies, have also become increasingly recognized as playing a valuable and influential role in trade, health and development. Their organization and influence at the WTO talks in Seattle in November, 1999, illustrates this. To some, the recent growth of NGOs represents a democratic counter-balancing to the rise in power and influence of private multinational corporations and individuals. There is certainly evidence to this effect, both within and between nations. The potential for such organizations to give stronger voice, especially to those marginalized by current forms of economic globalism, remains strong. But today’s NGOs also have their own organizational interests, which are sometimes more entrepreneurial than concerned with social justice and development goals.40 The issues they tackle are broader and more complex than simply anti-poverty work.

    Their numbers are growing bewilderingly large, their democratic integrity is as varied as that of nations and their stance on engaging in the new regime of public-private partnerships remains a point of considerable debate within and amongst them.

    These shifts in private/public partnerships and the growth and influence of NGOs also points to what some observers consider a new and emergent form of global governance. There is little dispute that ensuring environmental protection and social development in the face of economic globalization, and especially trade and investment liberalization, requires new forms of governance that would:

    1. enable trade and investment decisions to be based on health, social and environmental goals, rather than on purely market-driven concerns, and
    2. enable all social sectors (governments, private corporations, NGOs, civil societies, citizens) to be equitably engaged in this process.

    This is a daunting task. The WTO, for example, remains a largely unaccountable and secretive organization. It has been slow to introduce substantial changes to address public concerns that contributed to the failure of the Seattle Ministerial conference. While there have been some initiatives to open up its internal operations to participation by all member countries, it remains closed to the public, and specifically civil society (non-governmental) organizations. Even national government submissions to the dispute panels are kept secret. Apart from making the WTO more transparent and accessible to the public, there are also calls to make it more democratically accountable. One intriguing proposal, included in a draft resolution to a meeting of the Liberal International (October 2000, Hull, Quebec), is to create a formal WTO body comprised of elected parliamentarians from member countries.

    Ilona Kickbusch, in her keynote address to the 6th Canadian Conference on International Health, noted that the world is rapidly changing and yet "our institutions - our forms of governance – have not kept up. We seem to be experiencing both a political fragmentation and a lack of accountability of major players."41 International health governance as it exists today, which includes many NGOs, as well as international organizations and national infrastructures, has been unable to coordinate "an adequate response" that combines policy, resources and the political will to meet the growing challenge of health inequities and ensure the health of vulnerable populations around the globe. What increasingly is taking the place of organizations are networks which, while potentially useful for particular campaigns or policy measures, are also "characterized by shifting alliances and blurred lines of responsibility."42 Others (e.g. JET, 1999) have pointed out that our interconnected and intercultural world requires requires interdependent management and organization. We need to create new rules and authority to govern our global village, without necessarily creating a new world government.

    Global governance, as distinct from government, "refers to an amalgam of institutions, norms, and rules… and cooperation between governmental organizations and civil society that are accepted as authoritative in the international community or some sector of international activity."43 Global governance, in this sense, is something we are in the process of building at this very moment. Its structure isn’t yet clear, but its possibility affords the international health community an opportunity to shape it’s values base and to seek development of certain key elements.

    Kickbusch, for example, believes that the "value base of global public health must remain firmly within the framework of equity and human rights set by the WHO constitution and the Health for All Strategy."44 Despite the fact that health has been recognized internationally as a basic human right over the past 10 years, a number of challenges to universal access have surfaced with increasing trade liberalization and increasing health care costs. She suggests the establishment of an independent UN Spokesperson on Human Rights and Health who would give regular health and human rights reports to the World Health Assembly and would have the right to draw the international community’s attention to any human rights and health abuses occurring globally. This requires that health be framed as a global public good, and creation of new global health agreements. The development of a global convention on tobacco control45 has been offered as a useful starting point for other instruments of global health policy.

    Health and other development programs are increasingly being implemented through partnerships, networks, and coalitions involving a range of actors. It is important to develop a strategy that " helps transform these networks of action and advocacy into networks of governance."46 The development of a set of values by a credible international group, that would guide the actions of such networks as the GPPPs for health development, and would also assist in the selection of partners with similar sets of values, could be useful.

    A major challenge is to move global health policy relating to such issues as trade and health, food safety and security, women’s rights and poverty alleviation, into other global policy organizations and arenas that have not traditionally been concerned with health, social and environmental issues. Many of the policy agreements to advance global health, will need to be reached in organizations such as the World Trade Organization. Some proposals to this effect have already been made, as the inset on "Social Clauses and Financial Transaction Taxes" describes.

    A number of NGOs internationally in recent years have called for the incorporation of “social clauses” into trade and investment agreements. Clauses would include those governing basic labour, children’s and human rights and key multilateral environmental accords. UN agencies responsible for overseeing these currently unenforceable “common good” multilateral accords would have WTO sanctions at their disposal. All NGOs do not support this strategy as they are concerned about social clauses being used as “backdoor protectionism,” that is, wealthier countries with a greater financial ability to comply with such environmental and social agreements could use trade sanctions against poorer countries lacking the requisite financial, human and governmental resources. Social clauses, however, may still represent one potential governance option, provided the principle of “differential compliance” is applied to poorer countries. This principle is already recognized in many UN declarations, including agreement on the need for wealthier countries to provide economic and technical assistance to poorer nations to help them achieve compliance. It is also important that a social clause approach allows national regulatory solutions that are tailored to meet the needs of the particular country and situation, rather than solutions based solely on the “policy traditions of the north” (Labonte, November 8, 1999, p. 17).

    Less controversial are calls for a Tobin tax (or financial transaction tax) that would be a standard tax on financial market transactions (e.g. on the trading of bonds, stocks, currencies and derivatives). Such a tax would penalize and so presumably reduce, the high level of short term speculation that exists in such markets, but it would not deter long-term investment. “It would also raise about $150 billion US annually (1995 estimate), which could be used to develop the internal capacities of poorer nations to comply more rapidly with social and environmental accords” (Labonte, November 8, 1999, p. 16). Several countries have now passed resolutions calling for such a tax, and the 2000 United Nations World Summit for Social Development saw unanimous agreement from 160 nations calling on the UN to host a study on a currency (financial) transactions tax. The role of such a tax is seen as partly to develop “new and innovative sources of funding, both public and private, for dedication to social development and poverty eradication programmes.”

    There is also increasing recognition amongst global organizations, such as UN agencies and the WTO, that greater "coherence" between multilateral agreements must be developed. At present, some WTO agreements prevent national governments from complying with the terms of several environmental and social "common good" agreements, such as Rio Agenda 21 (see also the earlier inset on "Protecting Patents or Protecting Babies?"). A current example at developing "coherence" is the effort to engage the WTO in revisions of the WHO International Health Regulations (IHRs). These are legally binding rules requiring national governments to monitor and report outbreaks of certain designated diseases. Since 1995, the WHO has been working to update these regulations to make them more enforceable and to address the growing significance of new and re-emergent communicable diseases. One impediment to enforcing the IHRs regulations is the loss of income from trade and tourism which can follow reports of an outbreak. This obstacle can be exacerbated when the IHRs conflict with member countries’ WTO trade obligations. As part of its review, the WHO has proposed that the WTO Committee on Sanitary and Phytosanitary Measures (SPS) recognize WHO assessments of health risk, and that WTO enforcement powers be used to help back up the IHRs. Meaningful collaboration would require ceding to the WHO some of the authority of WTO trade panels currently assume for determining legitimate public health risks.47 The WTO and the UN Environment Programme (UNEP) are similarly looking for enhanced cooperation on trade and environment issues, specifically to mitigate potential trade-environment conflicts.

    Finally, crippling levels of debt have severely weakened the ability of governments in many developing countries to promote long-term social and economic development. More debt relief initiatives are crucial to the development of an equitable and democratic system of global governance, and additional pressure should be placed on richer (developed) countries to honour their previous agreements to increase their development assistance over time. Continued promoting and piloting of the "20/20 initiative" that involves donor governments agreeing "to provide 20 percent of their funding, and donee governments 20 percent of their expenditure, to provide basic human needs" (International Council on Social Welfare, Priority Issues: Enabling Environments, p.2; http://ICSW.org/copenhagen_implementation/copenhagen_papers/paper1/enabling.htm ).

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    VI.     TOWARDS A FRAMEWORK FOR IDENTIFYING HEALTH IMPACTS OF TRADE AND
              INVESTMENT AGREEMENTS

    The previous sections of this paper have argued that the relationship between trade, economic growth, governance and health is more complex than that proposition that: increased trade = economic growth = higher incomes = better health. Understanding this relationship must start with a fuller appreciation of the determinants of health and of the nature of modern international trade agreements.

    Health is more than a function of one’s level of income, although economic and social conditions, including the level and distribution of employment, which are sensitive to trade, are important determinants of the health of a population. The population health framework developed in Canada is a useful guide for understanding the range of individual and collective factors determining health. Most recent versions of this framework48 identify the following key determinants of health:

    • Living and working conditions (socioeconomic environment)
    • Physical environment
    • Health services
    • Early childhood development
    • Social support
    • Personal health practices and coping skills
    • Biology and genetic endowment

    These factors influence health both directly and indirectly, and are themselves interconnected. While the contribution of each factor can be examined separately, "it is the interplay of all the factors that ultimately determines the health of individuals, families and communities."49

    In its Strategies for Population Health report, the Federal/Provincial/Territorial Advisory Committee on Population Health (ACPH) emphasized the importance of a wide range of public policies, and the need for intersectoral policy coordination, to support population health. The ACPH in particular emphasized that:

    "It will be necessary to improve the understanding of other sectors about the ways in which their policies, decisions and actions impact population health. Furthermore, it will be necessary to bring about a willingness to act on that understanding, so their actions better support population health. A greater understanding in the economic and business sectors about the links between health and prosperity will be particularly crucial."50

    Just as health is about more than wealth, trade agreements are of more than commercial significance. As described in our review of the NAFTA and the WTO agreements, the focus of international trade negotiations has shifted from simply reducing tariffs on imports and exports to dismantling so-called "non-tariff barriers" to trade. "Non-tariff barriers" is a term which can be, and has been, defined to include just about any government measure that affects commercial activity, even if only incidentally and regardless of its public policy objective. Trade obligations which restrict governments’ capacities to achieve health goals through legislation or regulation may have very serious health impacts independent of any economic impact of liberalized trade.

    The major multinational organizations driving globalization are sometimes candid about the enormous reach of the new generation of trade agreements. A recent OECD report remarks that:

    "the progressive dismantling or lowering of traditional barriers to trade and increased relevance of 'behind the border' measures to effective market access and presence has exposed national regulatory regimes to a degree of unprecedented international scrutiny by trade and investment partners, with the result that regulation is no longer, if ever it was, a purely 'domestic' affair."51

    In a background note on the GATS and health and social services, the WTO Secretariat observes that "there is hardly any measure governing the organization of the sector or the provision of individual services" that would not be subject to the foreign access conditions of GATS.52

    Based on our understanding of modern trade and investment agreements, and on a population health approach, it should be possible to identify where trade and trade policies impact on the various determinants of health, both positively and negatively. Such an analysis is timely and important. There is a need for more research in a number of areas pertinent to health, economic globalization and trade liberalization, including: "well documented evidence to inform future trade and health policies".53 The US and other countries and groups, for example, have urged that existing WTO agreements be given full environmental reviews, as well as health inequalities assessments. Unlike conventional health impact assessments, which simply assess how health is affected by a particular policy, a health inequality assessment attempts to measure how policies effect the distribution of health amongst different nations and population groups.

    Such reviews and assessments could build upon recent work by Yach, Bettcher and Guindon.54 These authors identify certain components of trade, specifically health services, hazardous commodities and intellectual property, which potentially influence health, and how they are affected by different WTO agreements. It would not be difficult to extend such a framework to incorporate measures of population health determinants (or, as they are coming to be known as "health determining conditions"), and to better articulate the social and environmental pathways through which trade and investment liberalization and other tenets of economic globalization (privatization, de-regulation) influence people’s health.

    Such analyses could support collaboration among policy-makers in health, trade and other fields to ensure that interventions acting on the direct determinants of health are not hampered by conflicting trade obligations, and that appropriate policies are designed to address the indirect determinants of health. These analyses could also provide a much needed framework for health impact and inequalities assessments of government trade policy.

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    VII.     CONCLUSION

    In this paper, the CSIH has discussed key health-related issues related to economic globalization, trade agreements and shifting patterns of private/public partnerships and governance. The intent was to increase understanding and discussion of these issues among various players within the health and development sector. It is hoped that this paper serves as a catalyst for action, in Canada and abroad, in support of global policies and governance structures that advance the goals of equity and "people-centred" sustainable development.

    This paper also represents the CSIH’s first formal statement on these issues. It provides the foundation for its own advocacy work, and its ongoing support of research and policy analyses, in the area of Trade and Health.

    In summary, CSIH is concerned especially that the current trade focus on the benefits of open markets (trade and investment liberalization) pays too little attention to trade-related health, social and environmental costs. CSIH does not oppose global trade. Rather, it supports development of a system of global governance that would ensure that such trade meets human and social development goals associated with greater equity in power and resources amongst citizens worldwide.

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    FOOTNOTES

    1House of Commons Standing Committee on Foreign Affairs and International Trade, 1997, 123-24.  

    2Canadian Public Health Association, 1992.  

    3Larkin, M. (1999) Globalization and Health. Critical Public Health, 9 (4), 335-345.   

    4Koivusalu, M. World Health Organisation and Trade-Creep in Health and Social Policies. Helsinki: Globalism and Social Policy Programme (GASSP), p. 11.  

    5 Boyer, R. and Drache, D. Editors. States Against Market: The Limits of Globalization, New York: Routledge, 1996.  

    6World Trade Organization. Trade, Income Disparity and Poverty. Special Study 5 (1999).  

    7 Rodriguez, F. & Rodrik, D. Trade Policy and Economic Growth: A Skeptic’s Guide to the Crossnational Evidence.

    University of Maryland and Kennedy School of Government, Harvard University May 2000.  

    8Rodriguez & Rodrik, Trade Policy and Economics, pp.. 62-63.  

    9 Raghaven, C. "WTO Members Awaiting New Draft Text for Seattle" Third World Network 10/17/99; http://www.twnside.org.sg/souths/twn/title/new_draft   

    10Koivusalo, Trade-Creep in Health, p.l5 & 16. Supported by Blane, Brunner, Wilkinson, eds. Health and Social Organization. London: Routledge. 1996. Wilkinson, Unhealthy Societies. The Afflictions of Inequality. London: Routledge, 1996. Kawachi, Kennedy, Lochner, Prothrow-Stith, "Social capital, income inequality and mortality," American Journal of Public Health, 87, (1996):1491-96.  

    11Canadian Public Health Association, March 1997, p. 29.  

    12 Sen, A. Development as Freedom, New York: Knopf, 1999, p. 6.  

    13 Sen, A. Development as Freedom, p. 3.  

    14Young (p. 7) defines development as a complex process involving the social, economic, political and cultural betterment of individuals and of society itself. Betterment in this sense means the ability of the society to meet the physical, emotional and creative needs of a population at a historically acceptable level … and to free human labour time from an incessant treadmill of basic needs production. It thus involves a form of society which allows for equal distribution of social wealth."  

    15In it’s 1993 study Conceptual Framework, Seniors Community Programs, Health Canada defined quality of life as "includ(ing) the right to independence and the right to gain satisfaction from living. It involves all aspects of well-being: material, physical , mental and spiritual as determined by the individual in the context of societal values. Dignity, self-esteem and being valued by others are important elements of a positive quality of life" (p. 4)   

    16 Equity refers to fairness or a system of justice (The Concise Oxford Dictionary, 1983).  

    17 Shookner, M & Pfrimmer, D. World Summit for Social Development Canadian NGOs Statement, April 1995, p. 1.  

    18United Nations Conference on Trade and Development. Trends in International Investment Agreements: An Overview. New York & Geneva: United Nations, 1999. (UNCTAD/ITE/IIT/13), p. 42.  

    19 NAFTA. Article 712 (5).  

    20Although patent protection was not formally part of the US-Canada Free Trade Agreement (1988), Canada agreed at a crucial point in the negotiations - and following the direct intervention of the then Prime Minister Brian Mulroney - to amend Canada’s compulsory licensing legislation by extending patent protection for prescription drugs to 20 years.  

    21Provincial and Territorial Ministers of Health, Understanding Canada’s Health Care Costs: Interim Report, June 2000.  

    22"Statement of the Honourable Julius L. Katz before the Standing Committee on Health," House of Commons May 10, 1994; and Carla A. Hills, "Legal opinion with regard to plain packaging of tobacco products requirement under international agreements," (Mudge Rose Guthrie Alexander and Ferdon, Washington D.C. May 3, 1994). It is notable that Carla Hills is former U.S. Trade Representative and Julius Katz is a former USTR.   

    23Lawrence Herman, "‘Exportation’ takes on new meaning," The Financial Post July 28, 1998, p.13  

    24Canada’s NAFTA reservation for health and social services (Annex 11-C-9) is highly qualified. A program or other government measure is protected from the NAFTA services and investment obligations only to the extent that it is a "social service established or maintained for a public purpose." While no NAFTA dispute panel has ruled on the interpretation of these terms the United states Trade Representative asserts a restrictive meaning according to which NAFTA obligations would apply in all cases where there is a mix of public and private funding on service delivery. If this interpretation prevailed in a dispute, much of the Canadian health care system would be exposed to NAFTA trade obligations.  

    25Steven Shrybman, A Legal Opinion Concerning NAFTA Investment and Services Disciplines and Bill 11: Proposals by Alberta to Privatize the Delivery of Certain Insured Health Services. Commissioned by the Canadian Union of Public Employees, March 2000.  

    26Both the agreement and the secretariat were known as the GATT.  

    27 DFAIT press release: "Canada to Appeal WTO Ruling in France Asbestos Dispute, 18 September 2000.  

    28 UNDP, Human Development Report. Toronto: Oxford University Press, 1997.  

    29 Voluntary Services Overseas "Free Trade: For Whom?" 1996, http://www.oneworld.org/vso/orbit60/trade   

    30 UNCTAD Trade and Development Report 1999, cited in Khor, M "South must reexamine trade, investment liberalization," Third World Network, 9/16/99; http://www.twnside.org.sg/souths/twn/title/liberal   

    31 V. Shiva, "Who Are the Real Pirates?" Third World Resurgence (63), 16: 1995.  

    32World Bank, World Bank Development Report 1998/99, New York: Oxford University Press, 1998; D. Butler, "World Bank calls for fairer deals on patents and knowledge, Nature (395): 1998, p. 529 and "Malaria research deal seeks to make up for industry’s retreat, Nature (395): 1998, pp. 417-418 as cited in Koivusalu, Trade-Creep in Health, p. 26.  

    33N. Drager, "Making trade work for public health." British Medical Journal, 319 (7219) 1999:1214,www.bmj.com/  

    34The Honourable Pierre Pettigrew, Minister of International Trade, "Statement to the Standing Committee on Foreign Affairs and International Trade," 14 June 2000 (Hansard 1540).   

    35 Only services which meet a very narrow definition of services "provided in the exercise of governmental authority" are excluded from the GATS obligations. Any service, including most health services, which involves a mix of private and public funding and delivery is subject to GATS obligations on the same basis as are commercial services.  

    36JET, Focus on Global Governance: A World Conference General Overview , Ottawa: University of Ottawa Centre on Governance, 1999.  

    37 I. Kickbusch, Shifting global environments for health and development. Keynote address, opening plenary, 6th Annual Conference on International Health, Canadian Society for International Health, Ottawa, Canada, November 1999.  

    38 Koivusalu, Trade-creep in Health, p. 43.  

    39Civil society can be defined as the social sphere that exists outside of government and the private sector which is composed of groups or associations of people which have formed to further the interests of their members. The concept of civil society also includes the interaction among these groups and the political freedom to act. For NGOs, strengthening civil society entails enhancing the capacity of the most marginalized and impoverished groups so they can participate more effectively in the processes and decisions which affect their lives" (Canadian Council for International Cooperation, April 1996, p. 13)  

    40Weiss, T. International NGOs, Global Governane, and Social Policy in the UN System. GASSP Occasional Papers No 3/1999. March 1999; and Engberg, U. & P. Stubbs, P.. Social Capital and Intergrated Development, GASSP Occasional Papers No 2/1999.  

    41Kickbusch, Shifting global environments, p. 1.  

    42 Kickbusch, Shifting global environments, p. 5.  

    43 JET, Focus on Global Governance, p. 2.  

    44 Kickbusch, Shifting global environments, p. 9.  

    45 D.W. Bettcher, D. Yash, G.E. Guidon, "Global trade and health: key linkages and future challenges," Bulletin of the World Health Organization. 78 (4) 2000: 521-534.  

    46 Kickbusch, Shifting global environments, p. 11.  

    47 Committee on Sanitary and Phytosanitary Measures, "Global Crises – Global Solutions: Managing urgent international public health events with the revised International Health Regulations," Information paper submitted by the World Health Organization (G/SPS/GEN/179, 31 May 2000); and Mark W. Zacher, "Global Epidemiological Surveillance: international collaboration to monitor infectious diseases", in Kaul, Grunberg, Stern eds, Global Public Goods: international cooperation in the 21st Century, UNDP 1999  

    48ACPH, Toward a Healthy Future: Second report on the health of Canadians 1999, September 1999 Health Canada (www.hc-sc.gc.ca) and Canadian Institute for Health Information ). This framework has been adopted as the structure for these recently initiated flagship reports.  

    49ACPH, Toward a Healthy Future,p.3  

    50ACPH, Strategies for Population Health: investing in the health of Canadians, (prepared for the meeting of the Ministers of Health, Halifax, September 14-15, 1994) p.33.  

    51OECD Country Review: Spain, Sept 2000,p.219. (from Ellen gould) – get full citation  

    52WTO Council for Trade in Services, Health and Social Services: background note by the Secretariat, S/C/W/50 (18 September 1998), paragraph 35.  

    53 Bettcher, Global trade and health, p. 530.  

    54"Global trade and health: key linkages and future challenges," in Bulletin of the World Health  



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