Global Trade and Its Impact on Public Health

1. Global Trade and Its Impact on Public Health Lily Walkover, CPATH fellow Center for Policy Analysis on Trade and Health (CPATH) Ellen R. Shaffer PhD MPH, Joe Brenner MA www.cpath.org International People’s Health University June 28, 2007

2. 2 Learning Objectives Understand changes in the global economy that affect health Identify global public health priorities and conflicts with prevailing economic and trade policies Articulate how trade agreements can restrict access to affordable health-related services and medicines, public health regulations that protect health such as tobacco and alcohol control measures, health professional workforce, and food supply Provide examples of campaigns to bring public health’s voice into global economic policy keepkeep

3. 3 Introduction: Public Health And Global Trade Global trade agreements address public health concerns Public Health not generally involved Sustainable economic development is a public health issue Trade negotiations are at a crossroads: we can make a difference keepkeep

4. 4 Outline: GLOBALIZATION & PUBLIC HEALTH 1. Context: Economic Globalization 2. Trade Agreements and Public Health Public Health’s Right to Regulate Environment, Tobacco Control Services Affordable Medicines 3. Public Health Representation in U.S. Trade Negotiations 4. Prospects for Progress: Bringing Public Health Voice to Sustainable Development keepkeep

5. 5 1. Context: Economic Globalization Threats to Global Health Global Economic Trends Barriers to Development Sustainable Development: Prevailing Economic View Vs. Public Health View The Trade Landscape Trade Policy at a Crossroads

6. 6 Threats to Global Health Widespread threats to global health persist AIDS, TB, Malaria Infectious diseases Chronic illnesses: Hypertension, diabetes Environmental: Cancer, respiratory Coexisting with both unprecedented wealth and economic inequality Americas have greatest income inequalities

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

8. 8 Global Economic Trends Manufacturing, agriculture grow in low/middle income countries Growth of services sector in wealthier nations Greater quantity and accelerated pace of cross border financial transactions and exchanges The integration of economic and political systems across the globe Who will control and benefit?

9. 9  Sustainable Economic Development : Competing Views Prevailing Economic View Facilitate trade to increase the wealth of corporations and the poor. Deregulation: Reduce laws and regulations: Facilitate faster flow of capital, Foreign Direct Investment Privatization: Turn public entities into private enterprises Save public funds, increase access

10. 10 Public Health Views:Sustainable Alternative Countries determine mix of foreign investment and local development Accountable, democratic governments Strong social institutions and infrastructure Assure access to affordable vital services Health care, education, water and sanitation Promote equity Privatization shifts costs to individuals

11. Note C

12. 12 What Do Trade Agreements Do? “Liberalize” trade: Facilitate global corporate transactions Reduce barriers to trade – “protections” for locally made goods & services Tariffs (e.g. barriers to trade in steel) Regulations (e.g. barriers to trade in services)

13. 13 Stalemate The major countries have sought “liberalizing” measures for their competitive sectors (services, goods) but have been unwilling to make offsetting concessions in their noncompetitive sectors (agriculture) Popular opposition: Seattle, Cancun, Hong Kong, Guatemala, Thailand Deadlock at WTO meetings: 1999, 2003, 2005, 2006

14. 14 Carnegie: Trade and Wealth It has been fashionable to state that trade can do more than development aid to lift people out of poverty in developing countries. But trade is only one policy mechanism among many that must be pursued to achieve economic growth and rising incomes. Keep all or kill all Carnegie slides???Keep all or kill all Carnegie slides???

15. 15 Trade Policy at a CrossroadsTrade Gains Modest Recent studies by Carnegie and the World Bank show a one-time global income gain of less than $60 billion under any realistic new WTO trade scenario. That is 0.146 percent (about one-seventh of one percent) of current global gross domestic product (GDP). Kym Anderson, William J. Martin, and Dominique van der Mensbrugghe, Global Impacts of the Doha Scenarios on Poverty, September 18, 2005. In Poverty and the WTO: Impacts of the Doha Development Agenda, ed. Thomas W. Hertel and L. Alan Winters (Washington: World Bank, 2006), Sandra Polaski, Winners and Losers: Impact of the Doha Round on Developing Countries. Carnegie Endowment for International Peace, 2006.

16. 16 Carnegie Policy Proposals Reject proposed trade policy changes that are likely to worsen poverty. Reject trade policy changes that are likely to produce benefits for only small numbers of firms and households while inflicting economic harm on larger numbers Sequence liberalization Strengthen trade adjustment assistance.

17. 17 Current U.S. Proposals:Regional, Bilateral Agreements Since failure of large international trade negotiations in 2003 and 2006, US is focusing on individual countries and smaller regions. CAFTA: Central America + Dominican Republic Andean FTA: Peru, Panama, Columbia South Korea FTA CUT??? Or fix… (will come back to later in presentation…)CUT??? Or fix… (will come back to later in presentation…)

18. 18 2. Trade Rules vs. Public Health Priorities Right to Regulate Trade Dispute Resolution Tobacco Control Services Intellectual Property and Access to Medicines Agriculture EDITEDIT

19. 19 “Liberalize” trade Reduce barriers to trade Threaten to pre-empt a wide range of laws, regulations, policies, and programs to prevent disease and promote health Trade Rules Vs. Public Health Priorities

20. 20 Laws and Regulations At Risk Public subsidies for “safety net” health services Affordable medications Food safety/GMO foods Quality standards for health care services and products & allocation based on need Clinician licensing Health insurance & patient protection Distribution of alcohol, tobacco, firearms Occupational safety & health Public administration of water & sanitation

21. 21 Vectors of Pre-Emption: Trade Agreement Rules GATS (General Agreement on Trade in Services) Laws and regulations that are “more burdensome than necessary to ensure the quality of a service” can be challenged as barriers to trade Can bargain away health “protections” for services, affordable medicines vs. economic “protections” for goods, agriculture GATS?GATS?

22. 22 Enforcing Trade Rules:WTO Dispute Resolution GATS?GATS?

23. 23 Countries’ Right to Regulate Vs. Corporations’ Right to Sue Bilateral/regional agreements like NAFTA provide a unique “investor’s rights” mechanism Foreign corporations can directly challenge national government actions. Grounds: the loss of current or future profits, even if is caused by a government agency prohibiting the use of a toxic substance.

24. 24 NAFTA Challenge to Health: Metalcad State of San Luis Potosí - permission to re-open waste disposal facility denied. Geological audit - waste disposal site would contaminate local water supply. Community opposed re-opening. Metalclad Company- local decision was an expropriation of its future potential profits. Metalclad successfully sued Mexico. Awarded $16.7 million. KEEPKEEP

25. 25 Does Public Health Ever Win?Rarely and Barely 2 cases in 10 years upheld public health Global trade dispute panels: no concept of public health Decisions set poor precedents, delayed public health protections

26. 26 WHO/PAHO on Tobacco and Trade “Transnational tobacco companies…have been among the strongest proponents of tariff reduction and open markets. Trade openness is linked to tobacco consumption.” D. Woodward, N. Drager, R. Beaglehole, D. Lipson. Globalization, global public goods, and health. In: Trade in Health Services: Global, Regional and Country Perspectives. N. Drager and C. Vieira, Eds. Washington, DC: PAHO, 2002. pp 6-7. PAHO?PAHO?

27. 27 Chilling Effect On Public Health Regulations Canada proposes "plain" packaging for cigarettes American tobacco companies threaten NAFTA suit for "expropriation" of their intellectual property – their trademarks Canada withdraws proposal

28. 28 WHO Framework Convention for Tobacco Control bans sales to minors promotes agricultural diversification bans advertising promotion & sponsorship rotating health warnings 30-50% size eliminates illicit trade in tobacco Violates WTO Rules? - Michele Barry, MD FACP, Yale CUTCUT

29. 29 Health Care ProfessionalsMigration and GATS TAKE OUT SECTION?TAKE OUT SECTION?

30. 30 Workforce RNs per 100,000 Population in Sending and Receiving Countries

31. 31 Should Countries Rely on GATS for Health Professionals? Yes! Immigration resolves staffing shortages in richer countries Remittances to poorer countries “Temporary” MDs bring patients back to home country Trade-off for migration of unskilled labor

32. 32 Should Countries Rely on GATS for Health Professionals? No! Temporary migration: Inefficient, unfair, hard to enforce Unsustainable model for development Rules for licensing, staffing, quality should not be determined in trade arena Human rights not addressed Infrastructure not addressed

33. 33 Nurse Migration: Towards Solutions Protect nurses’ human rights Fair treatment Right to travel to advance global nurse expertise Invest in nursing education and higher pay Models: International Council of Nurses Code of Ethics PAHO Caribbean Managed Migration project

34. 34 Intellectual Property Rules and Access to Affordable Medicines

35. 35 Global AIDS Pandemic 38 million people with HIV/AIDS 5.8 million could benefit now from effective drugs Generic antiretrovirals inaccessible to millions 3x5 failed: ARVs increased 440,000 to 1M in the developing world receiving treatment

36. 36 TRIPS Trade-Related Aspects of Intellectual Property Rights WTO Agreement All WTO members must give patent holders rights as stated in TRIPS Phased in: Covered all high income countries as of 1996 Middle-income countries as of 2005 Least Developed Countries will be covered as of 2015

37. 37 What Do Patents Do? Monopoly rights to originator, can sell product without competition Protection for originator’s “intellectual property”

38. 38 Role of Patent Policy Key incentive to innovation Fairly compensates investments in R&D Assures timely access to new life-saving drugs OR Props up exorbitant pharma profits in absence of actual innovation Perpetuate monopoly as long as possible by extending patent terms, lengths. Discourage fair competition by generics

39. 39 Political Crisis for Pharma Public outcry about high prices U.S. pays highest prices in the world Reimportation proposals Quality control: COX-2 inhibitors (painkillers) Crisis in Innovation Fewer new drugs in research pipeline Business model stuck in vicious cycle Driven to seek blockbuster, copycat drugs

40. 40 Very Few New Drugs Offer Additional Value

41. Pharmaceutical Sales and Research Go To Wealthiest Nations

42. 42 Pharma Political Strategy:Trade Agreements A. Protect high prices in US market Block reimportation (“parallel importation”) B. Seek higher prices in other developed countries Pharma: price controls harm quality, access, innovation C. Maintain IP structure in regional trade agreements with low/middle-income countries “TRIPS-Plus” trade rules extend patents Restrict production and sale of generics Market to small number of wealthy individuals

43. 43 TRIPS Challenge to ARVs in South Africa Clinton Administration threatened to cancel other trade benefits (Generalized System of Preferences) to force SA to change drug laws Gore rescinds, 2000 Pharma files TRIPS suit Withdraws due to international outcry, 2001 Led to Doha Declaration, 2001

44. 44 Doha Declaration on the TRIPS Agreement and Public Health Paragraph 4. “We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health.” World Trade Organization Ministerial Meeting, 2001 Compulsory licensing allowed Can authorize generic production of patented drugs Talk abt compulsory licenses here!Talk abt compulsory licenses here!

45. 45 Compulsory License Government can issue a license to a producer other than the patent holder to market a drug Compulsory license can be issued for many reasons, including emergency Benefit: Country develops drug industry, efficiencies Can be bargaining chip to lower drug prices

46. 46 TRIPS-Plus Debate: Is TRIPS Floor or Ceiling? Can bilateral and regional agreements give patent holders greater monopoly rights than they enjoy under TRIPS? US: Yes, through bilateral/regional FTAs India, China, Brazil, South Africa: No, use WTO

47. 47 “TRIPS-Plus” Rules Undermine Access Data Exclusivity Can’t use originator’s clinical trial data to establish safety and effectiveness of drugs for 5 years, even if no patent in place “Evergreening” rules extend patents Requiring licensing authorities to verify complex patents Barriers to generic competition, compulsory licenses Include plants and animals as patentable CUT FOR SPACECUT FOR SPACE

48. 48 U.S. Imposes TRIPS-Plus Rules CAFTA – enacted Proposed: Andean FTA: Peru, Panama, Colombia South Korea Thailand: withdrew from negotiations after coup, issued Compulsory Licenses Southern African Customs Union: withdrew from negotiations REVIEW THIS SLIDE – andean? Peru, Panama re-negotiate led by US South korea? Beef and autos, maybe medicines, activist pressure Coalition of Southern African countries REVIEW THIS SLIDE – andean? Peru, Panama re-negotiate led by US South korea? Beef and autos, maybe medicines, activist pressure Coalition of Southern African countries

49. 49 Agriculture, Trade and Obesity Global agribusiness and transnational shifting of raw materials to processed foods, high calorie soft drinks and snacks Nutrition transition during globalization – dietary convergence and consumption of foods high in fats and sweeteners Cultural change: urbanization, eating outside house, global supermarkets Michele Barry, MD, Yale

50. Diabetes prevalence in people over 20 COUNTRIES Diabetes prevalence in 2000 Estimated prevalence in 2030 (population (>20 yrs of age as percentage) (>20 yrs of age as a percentage) >100 million) Developed 6.3% adults 8.4% adults Developing 4.1% adults 6.0% adults Worldwide 175 million 353 million From: Yach et al. Epidemiologic and economic consequences of the global epidemics of obesity and diabetes. Nature Medicine 2006;12(1):62-66. From Michele Barry, Yalr University

51. 51 3. Democracy in Trade Policy: Who Decides? Eh, edit…Eh, edit…

52. 52 Democracy in Trade Policy Who Decides for U.S.? US Trade Representative (USTR) Susan Schwab, appointed by the President “Fast Track” Rules: Congress has limited authority to amend trade agreements Expires June 30, 2007 The public can speak up

53. 53 Campaign forPublic Health Representation US Trade Representative Advisory Committees Mechanism for domestic input into trade negotiations Provide formal, informal advice to executive branch 110 meetings in 2001

54. 54 Trade Advisory Committees: Big Business: 42 Public Health: 0

55. 55 Public Health Takes Action Public health and medical groups file federal lawsuit for representation: 2005 One tobacco control rep appointed USTR reports appointing 2 public health reps to Committees on Pharmaceuticals and Intellectual Property Now 42 to 2-3 2007: Congress demands greater transparency, accountability

56. 56 4. Prospects for Progress: Public Health Voice for Sustainable Development Which protest is this??Which protest is this??

57. 57 Public Health Campaigns Help reframe the debate on global trade and economic development Declare health care & water vital human rights Engage in dialogue and decision-making process to protect health care services and promote public health

58. 58 Alternative Models MERCOSUL European Union Cash transfers to lower income neighbors Eliminate inequalities among countries Bolster social programs CUTCUT

59. 59 Call for Accountability:Health Must Take Priority Over Commercial Interests Assure that health care and public health takes priority Assess impact of trade agreements on health Include public health community in negotiations Exclude provisions that could harm health, access to medications, health care, and other vital human services Assure universal access to health care, water and sanitation, affordable meds, education, and environmental safety American Public Health Association, Medical Students Assn, Nurses Assn, Public Health Officers, World Federation of Public Health Assns.

60. 60 States, Cities, TownsConcerned State and local officials are gravely concerned about the prospect of the Singapore FTA dispute resolution mechanism… no provision remotely similar to NAFTA’s should be included in future agreements… Executive Directors of National Conference of State Legislators, National League of Cities, National Association of Towns& Townships - Comments to USTR, Fed. Register, August, 2002

61. 61 2007: New Views in Congress Freshmen members dubious on trade Re-negotiating Andean agreements Resistance on Korea Democrats’ Statement of principles Opposition to renewing Fast Track

62. 62 Getting Specific: Public Health Objectives for 2007CPATH and Major Public Health Groups To assure democratic participation by public health and transparency in trade policy To develop mutually beneficial trade relationships that create sustainable economic development To recognize the legitimate exercise of national, regional and local government sovereignty to protect population health

63. 63 Getting Specific: Public Health Objectives for 2007 To exclude tariff and nontariff provisions in trade agreements that address vital human services To exclude tobacco and tobacco products To exclude alcohol products To eliminate intellectual property provisions related to pharmaceuticals from bilateral and regional negotiations… and promote trade provisions which enable countries to exercise all flexibilities provided by the Doha Declaration

64. 64 Protect Global Health Center for Policy Analysis on Trade and Health (CPATH) Joseph Brenner MA Ellen R. Shaffer PhD MPH www.cpath.org cpath@cpath.org Join the Listserv – send blank message to: join-G-H@list.cpath.org Phone: 415-933-6204 Fax: 415-831-4091