HEALTH-RELATED TRADE AGREEMENTS
The rules which govern world trade are formalized in different treaties and agreements which are negotiated and implemented under the aegis of the World Trade Organization (WTO). Four specific agreements have important implications for public health. One of the multilateral trade agreements having an impact on health is the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).
The TRIPS Agreement, which requires WTO members to establish minimum standards for protecting and enforcing intellectual property rights, contains several provisions that enable governments to consider immediate and longer-term public health implications when applying their intellectual property regimes. It also provides for some flexibility in the implementation of the agreement itself, allowing countries to limit patent owners’ exclusive rights under certain conditions. This flexibility was reaffirmed by WTO members at the Doha Ministerial Conference. Still, a basic tenet of the TRIPS Agreement is to encourage technological advancement through research and development by means of patent and copyright protection.
The General Agreement on Trade in Services (GATS) covers the movement of consumers and providers across borders to receive and supply health care, foreign direct investment in health and the emerging area of e-commerce and telehealth. Increased trade in health services could open the sector to increased competition, bringing with it needed technology and management, and for some countries, increased export earnings. It could also deepen current inequities in access and promote the migration of skilled health professionals from already under serviced areas.
The Agreement of the Application of Sanitary and Phytosanitary Measures (SPS) allows imposing standards to protect, for example, food safety and the protection of human life from plant or animal-carried diseases. When deciding about measures, WTO members are encouraged to follow international standards. WTO members are also allowed to establish their own national requirements.
A balance between trade and health policies can only be achieved if the health community is prepared to be far more vocal, and the trade policy community is prepared to listen.
The Agreement on Technical Barriers to Trade (TBT) contains specific rules in order to ensure animal or plant life or health. It has implications for the production, labeling, packaging, and quality standards of pharmaceuticals, biological agents, and foodstuffs.
Noting the needs for a public health perspective in international trade and for the evaluation of the impact of international trade agreements on public health, the World Health Assembly has recommended member states to explore and review their options under the relevant trade agreements and to take effective measures to ensure public health interests and safeguard access to essential drugs in the implementation of trade agreements.
POLICY COHERENCE: A NECESSITY
Given the considerable implications that trade rules could have on national public health, it is important for countries to create a sustainable and inclusive institutional process that supports policy coherence. Policy coherence can be defined as “a process through which governments make efforts to design policies that take account of the interests of other policy communities, minimize conflicts, maximize synergies and avoid unintended incoherence”. Essentially policy coherence supports common goals. In the case of trade and health, this means poverty reduction, human development and economic growth. A degree of incoherence may sometimes be inevitable, but trade-offs, should be transparent and appropriate measures taken to mitigate negative impacts.
Policy coherence in trade and health has been identified as one of the principle objectives for improving international health-related welfare. WHO resolution entitled “International Trade and Health,” explicitly urges member states, among others, to promote multi-stakeholder dialogue at the national level to consider the interplay between international trade and health; to take advantage of the potential opportunities and address the potential challenges that trade and trade agreements may have for health; to apply or establish, where necessary, coordination mechanisms involving relevant institutions, to create constructive and interactive relationships across the public and private sectors for the purpose of generating coherence in their trade and health policies; and to continue to develop capacity at national level to track and analyze the potential opportunities and challenges of trade and trade agreements for health sector performance and health outcomes.
In order to ensure policy coherence, necessary key conditions include strong political support; dialogue and joint fact-finding between trade and health officials at different levels; institutional mechanisms of collaboration engaging stakeholders and getting the right evidence. Together, these conditions make it more likely that trade reforms will, at the very least, not worsen health outcomes or the social conditions that lead to ill health.
CHALLENGES
The continuing expansion in scale and scope of world trade poses a number of daunting challenges for the health community. They must be armed with a better understanding of the potential health implications of various bilateral, regional and multilateral agreements regulating trade at present. They must realize that ignoring health can lead to problems in the trade sphere. A balance between trade and health policies can only be achieved if the health community is prepared to be far more vocal, and the trade policy community is prepared to listen.
Greater interaction is needed between policymakers and practitioners in the trade and health sectors to improve the coherence of domestic and international policy so that advantage can be taken of the potential opportunities. At the same time, potential risks that trade and trade agreements may have for health can be mitigated. In view of current and emerging international trade rules, ministries of health need to become more aware of trade issues under consideration within WTO and other international organizations. Such interaction requires research on the potential implications of trade agreements on health, and of trade liberalization in health-related sectors.
NEPALI CONTEXT
As a WTO member, Nepal has made commitments under these agreements; reveal opportunities with policy flexibilities and also challenges of providing accessible, efficient, equitable and quality health services to its populations. Nepal has conditionally agreed to open eleven service sectors including health-related social service. Commitment has only been specified in hospital services, in which foreign investment has been allowed.
Increase in foreign investment in hospital services can improve health care facilities and provide greater access to health facilities. Better health care facilities can attract foreigners into the country for medical services, contributing to domestic employment and income. The growth of modern health care facilities can also offer attractive opportunities to the medical professionals preventing the threat of brain drain. On the other hard, increased foreign direct investment in health sector can also create disparities due to the exorbitant cost of such services. This may lure attention away from the fundamental functions of the health system. Therefore, proper attention should be given to address this issue.
So far Nepal’s commitment to implement TRIPS is concerned, the major policy challenge is the harmonization of national intellectual property rights rules with the international ones. In this regard, the global negotiations dealing with pharmaceutical product patents and public health at the WTO level are a matter of concern for Nepal too. While enacting intellectual property laws at national level, as required by TRIPS, Nepal should capitalize on the flexibilities and exception to minimize the harms of intellectual protection on pharmaceutical products. Focus should also be given to research and development.
Nepal has confirmed to review laws and regulations relating to SPS measures and accordingly amend necessary legislation. With regard to export of Nepali pharmaceutical products and food items, the quality and the competitiveness of the products matter much. Each country has regulations formulated to protect the life and health of humans, plants and animals. Hence, it is important that the government and business sector pay attention to the international standards and SPS rules and regulations of other countries. For Nepal, compliance of SPS measures also demands upgrading and strengthening of its laboratories, quarantine units and human resources.
Nepal’s commitment to fully implement the TBT Agreement has provided the right to restrict trade for the protection of human health or safety and others. However, TBT measures taken to restrict should not create unnecessary obstacles to trade. It is also necessary to upgrade its testing as well as calibration facilities. It also has to provide a scheme for the registration and certification of products. For countries like Nepal, determining technical regulations and standards is not an easy task, so efforts are needed to concentrate in the areas of law and policymaking.
To comply with the commitments, different rules and regulations are in place. Also to make compatible with the agreements, timely amendments of certain legislations are also taking place. Moreover, there is a need to increase understanding of these WTO agreements and law to take advantage of their special and differential provisions. Being better informed would help guide policy decisions and assist in selecting appropriate regulatory approaches.
Overall trade in health services may provide a potential opportunity in some specific cases, but also entail risks and challenges. Capacity-building as well as adequate understanding of the agreement provisions and implication of any form of liberalization for the national health system are crucial prerequisites. It is therefore vital that the health community play an active role in formulating the national policy on international trade to ensure a healthy public health policy.
The interface between health and trade is even more critical in fast changing and interconnected world. The specific health policies that governments pursue might have implications for trade. National policymakers may need to take the agreements into considerations while addressing specific health areas. There is a need for ‘coherence’ in health and trade policy. Trade and health have a common ground. Health and trade policymakers can benefit from closer cooperation to ensure cohesion between their different areas of responsibilities.
(Writer is Secretary, Office of Prime Minister and Council of Ministers.)
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