The World Trade Organization's health agenda

At the World Trade Organization's ministerial conference held last week in Doha, Qatar, world trade leaders from the organisation's 142 member governments focused attention on a critical health issue. Trade ministers debated the flexibility in the organisation's agreement on trade related aspects of intellectual property rights (TRIPS) for countries to protect public health in emergencies. Such clarification is critical for developing countries to improve access and affordability of essential medicines for millions of poor people suffering from HIV/AIDS and other life threatening diseases. But access to essential drugs is not the only health issue affected by global trade rules. Agreements made by the organisation also shape national policies and regulations on issues ranging from food safety and imports of hazardous goods to duties on tobacco.

And there is more to come. The World Trade Organization's negotiations launched in 2000 to further liberalise trade in services under the General Agreement on Trade in Services (GATS) could increase the organisation's influence on financing and delivery of health care. In contrast with other agreements, GATS gives countries considerable flexibility to decide which service sectors to open to foreign competition and to set limits on access to markets. About 60 members of the organisation have already made commitments related to market access in health services. Few of these represent any loosening of existing national policy. But that could change, as the intent of the current GATS negotiations is to “deepen and widen” sectoral commitments.

Some of the proposals under negotiation regarding GATS indicate that developing countries will be asked to open up health service markets to foreign competition. In some cases this could improve the efficiency and quality of health services. But experience in middle income countries indicates that foreign competition in health service markets tends to worsen equity in financing and reduce access to care for the poor. Even when competition between public and private health providers raises quality, it primarily benefits the well off and concentrates on high end care, which has higher profit margins.¹ In Thailand the entry of foreign owned private health providers has lured physicians away from the public sector, increasing shortages of staff and unequal access to care by different socioeconomic groups.² Multinational firms with contracts to manage public hospitals in Argentina have sought to reduce the proportion of uninsured patients.³

Some argue that such risks to health equity arising from trade liberalisation can be reduced through regulation, and that GATS explicitly recognises the right of the World Trade Organization's members to do so.⁴ But health regulatory systems are weak or non-existent in most developing countries and where they exist, enforcement is limited or ineffective.⁵ GATS negotiators could make regulation in the health sector even more difficult if they restrict the ability of governments to limit foreign entrants or require regulations to not unduly hinder trade. These proposals, currently under discussion in the organisation's GATS council, would apply to all service sectors including health, even if governments did not make commitments to open up health service markets.

Even if members of the organisation choose not to liberalise trade in health services, health care is directly affected by other sectors that are the focus of current negotiations. Financial services, which includes health insurance, is one.⁶ The United States and the European Community have proposed that members of the organisation grant greater market access in financial services, by eliminating or relaxing restrictions on investment by foreign companies—commercial presence, in GATS parlance.⁷ The health implications of such decisions rarely occur to trade negotiators. For example, as part of its negotiations to join the World Trade Organization, China agreed to open up its market to foreign health insurers without assessing the impact on efforts to broaden social health insurance coverage. Private health insurers in Latin America, including those that are foreign invested, compete by selecting the healthiest people and dumping high cost patients on to the public sector.⁸

The agenda of developing countries for liberalisation of services trade includes proposals to ease the way for temporary employment of professionals from less developed countries in more developed ones.⁹ Developing countries see their skilled labour as a competitive advantage in the global economy and therefore want barriers to such trade reduced. As professionals in all sectors would be covered by such a change, this could, however, increase the medical brain drain and aggravate shortages of health personnel in source countries.

In view of the risks to health equity and access, the negotiating positions of members on GATS should be informed by evidence about the effects on the health system of liberalisation of services trade and trade policy. Yet there are almost no empirical studies on the impact of reducing trade barriers on health equity, efficiency, access, or quality.

More immediately, health policy makers and practitioners can take advantage of the raised consciousness of trade ministers, following the meeting in Qatar, about the importance of trade policy to health. After trade related aspects of intellectual property rights and access to drugs, the next major health issue on the agenda of the World Trade Organization may well arise in the course of negotiations on trade in services. Health professionals need to work with trade officials to minimise the risks to health equity from liberalisation of services trade, and ensure that any resulting economic gains in health related service sectors generate tangible public health benefits.