TWN Info Service on Health Issues No. 10

WHO Board debates and defers decision on trade and health

A draft resolution on the international trade and health, tabled at the meeting of the WHO Executive Board on 26-27 May was deferred by the Board much to the disappointment of the Third World countries which introduced it.

This followed when Australia proposed changes which would have diluted and made the resolution ineffective. This will lessen the effectiveness of governments and WHO to deal with the adverse impact of trade rules on health.

This report which was published in the South-North Development Monitor (SUNS) of 1 June 2005 outlines the main points in the resolution and the reactions of some of the members.

With best wishes
Evelyne Hong

By Martin Khor*
Geneva, 30 May 2005

A recent meeting of the Executive Board of the World Health Organisation (WHO) saw a lively discussion on the need for health authorities to have a bigger say in the formulation of multilateral and bilateral trade rules and trade agreements.

Many countries stressed the need for these rules to uphold public health principles, and for policy coherence between Health and Trade Ministries.

A draft resolution on "international trade and health" was put forward by 14 developing countries, but after a debate, the Board deferred taking a decision on it until its next meeting in January 2006.

Suggested amendments to the resolution by Australia were not acceptable to the main sponsors of the resolution. The Australian-proposed changes would have considerably diluted the message of the resolution and rendered it ineffective.

At the suggestion of the Chair of the Board, who is from Pakistan, a decision was taken to continue the discussions at the next Board meeting. This disappointed Thailand and Bolivia, the main sponsors of the resolution, who felt that the issue was important and a resolution at this meeting would send out the right signals.

The discussions on 26-27 May at the Executive Board meeting, held just after the World Health Assembly session, took place against the background of rising concerns in recent years about the effects that trade agreements (such as the TRIPS and services agreements in the WTO) are having on public health.

Even more recently, the intellectual property chapters in bilateral and regional free trade agreements have led to protests by citizen groups, particularly those representing patients suffering from HIV/AIDS and other diseases, who believe that these provisions limit the ability of their governments to make use of "TRIPS flexibilities" such as compulsory licensing that enable the supply of cheaper generic drugs.

On 27 May, Thailand introduced a resolution on "International trade and health" on behalf of itself and Benin, Bhutan, Bolivia, Brazil, Canada, China, Iraq, Jamaica, Kenya, Nepal, Sudan, Tonga and Vietnam.

The draft recognized the demand for information about the possible implications of international trade and trade agreements for health at national, regional, and global levels. It was also "mindful of the need for ministers of health and their colleagues in ministries of trade, commerce, and finance to work together constructively in order to ensure that the interests of trade and of health are appropriately balanced."

In the operational part, the draft resolution urged WHO member states:

1.1. to promote dialogue at national level to consider the interplay between international trade and health;

1.2. to adopt policies, laws, and regulations that address issues identified in that dialogue and take advantage of the potential opportunities, and mitigate the potential risks, that trade and trade agreements may have for health;

1.3. to create constructive and interactive relationships across the public and private sectors for the purpose of generating coherence in their trade and health policies;

1.4. to continue to develop capacity at national level to track and analyse the potential opportunities and risks of trade and trade agreements for health-sector performance and health outcomes.

The draft also requested the WHO Director-General to:

2.1. provide support to Member States (at their request and in collaboration with the competent international organizations) to frame coherent trade and health policies;

2.2 to respond to Member States' requests for support of their efforts to build the capacity to understand the implications of international trade and trade agreements for health and to address relevant issues through policies and legislation that take advantage of the potential opportunities, and mitigate the potential risks, that trade and trade agreements may have for health;

2.3. to continue collaborating with the competent international organizations in order to support policy coherence between trade and health sectors at regional and global levels and to foster the development of a global evidence base on the effects of international trade and trade agreements on health;

2.4. to report through the Executive Board to the Sixty-first World Health Assembly on progress made in implementing this resolution.

Australia proposed some significant changes to the draft. In Para 1.2, it wanted to replace "to adopt" with "to consider adopting." It also suggested a change from "risks" to "impacts." In Para 1.4, it suggested changing "potential opportunities and risks" to "implications."

In Para 2.1, it proposed that the words "trade and health policies" be changed to "trade-related policies" and that Paras 2.1 and 2.2 be merged with the word "and". The new text would thus be: "... trade-related health policies and support their efforts to build "

Australia also suggested that in Para 2.2 the words "take advantage" should be changed to "take full advantage." Also, the words "mitigate the potential risks" should change to "address the implications." In Para 2.3, it suggested inserting a comma after "global levels".

The effect of the suggested changes would be to water down the implications that trade and trade rules can carry risks (as well as opportunities) and to also dilute the actions that governments or the WHO are urged to take to mitigate the potential risks of trade rules on health.

Some developing countries, including Jamaica, Ecuador and Kenya, also proposed some changes to the resolution, but these were not significant in changing the original meaning of the draft and in fact served to strengthen the meaning.

In the discussions that followed, Ecuador noted that the Australian proposals would change the context and not just the text and that this seemed like a watering-down. Ecuador stated that it did not want the resolution to be worded so mildly that it does not mean anything and no longer helps the cause of public health.

"We need to be delicate in diplomacy but we don't need to be so delicate that we end up being indelicate with our own people," said Ecuador. "Since the health of our people is the major objective, this should be reflected in the wording of our documents."

Canada also expressed concern with the proposal that would change the wording to "coherent trade-related health policies," as it would dramatically change the meaning.

Thailand welcomed comments on its resolution and understood the need to be flexible. However, it was concerned with the potential consequences of international trade on health in both a positive and negative way. It was especially concerned with the proposed change in paragraph 1.4 from "potential opportunities and risks" to "implications" as it would weaken the resolution's substance. It agreed with Canada that in paragraph 2.1 "trade-related health" is different from "trade and health" and thus preferred to adhere to the original wording.

Supporting Thailand, Sudan stressed the importance of retaining the word "risk" rather than "impact" in para 1.2 as the resolution is about the risk (posed by trade to health) and "we shouldn't lose track of that."

At this stage, the Chair, who is from Pakistan, said the issue is very important but there was a "lot of apprehension" and proposed that the members have a "rethink" and defer this resolution to the next Board meeting.

Clearly disappointed, Thailand said the sentiments of the meeting's views were such that the Board had almost come to a conclusion and with a little more time the resolution could be passed at this meeting. Ecuador stressed that this issue is so important that the resolution should not be delayed as it would send out the wrong signal. It suggested that a drafting group resolve the matter. Bhutan also supported a decision to be taken now.

However, several other countries including the Czech Republic, Madagascar, Luxembourg, France and Namibia preferred to defer the decision. Luxembourg said the issue is important and it would like additional time to consider appropriate wording. The matter is too important to try and run it through too quickly, it added. France said there is need for more time to specify technical matters on the role of international organizations and agreements.

In concluding, the Chair repeated that if this issue is very important, a revisit is very important. He proposed that the decision on the resolution be deferred to January to "make it so strong that we have less criticism later."

The stage for this debate over the resolution had been set a day earlier when the Board discussed a WHO secretariat report on international trade and health, particularly in the context of WTO agreements concerning trade in health services and food safety.

The report said that as the potential effects of international trade and trade agreements on health have become ever more apparent over the past decade, the WHO Executive Board and the Health Assembly have addressed this topic in a number of specific contexts. It mentioned WHA resolutions on the relationship of pharmaceuticals and health policies with trade agreements, on the use of TRIPS flexibilities, on international migration and on the International Health Regulations.

It mentions four WTO agreements that may affect public health that are of particular importance to WHO's work: the General Agreement on Trade in Services (GATS), and the agreements on Application of Sanitary and Phytosanitary Measures (SPS), on Technical Barriers to Trade (TBT), and on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

On the consequences for health of trade expansion, the report said that trade liberalization can affect health in various ways. Conversely, national and international health standards and rules can have important implications for trade. Increasing trade in health services challenges the capability of ministries of health to assess accurately and respond rapidly to the risks and opportunities for population health.

There may also be the potential of increasing openness in the health sector under GATS, in its four "modes of supply" - cross-border supply of services (e. g., telemedicine, eHealth), consumption of services abroad (patients who travel abroad for medical treatment), commercial presence (establishment of health facilities in the country concerned), and presence of natural persons (foreign doctors or nurses who seek to practise in other countries).

"Informed and evidence-based approaches are needed to manage any future efforts to liberalize health-related services so as to ensure greater access to affordable, better quality, and effective services, leading to increased choice for consumers and greater equity in health outcomes," said the WHO.

"Countries also face challenges in ensuring compliance with the disciplines of SPS and TBT. This is particularly the case in the areas of food safety, diagnostic devices and medicines quality, safety and efficacy, respectively, in which the trade agreement creates obligations to draw up regulations based on science, conduct required risk assessments, and implement international standards through independent and effective national regulatory authorities.

"Generally, ministries of health need the capability, in terms of expertise and access, to provide their colleagues in the trade and finance ministries with the best evidence on the potential impact of trade and trade agreements on health outcomes, so that ongoing multilateral, regional, or bilateral trade negotiations may be properly informed."

This need creates demands on WHO's Secretariat from Member States and from the international organizations involved in trade, including for guidance on international standards for health-related goods and services, advice on potential implications of trade rules from a public-health perspective, provision of tools and methodologies to assess the possible implications of trade and trade agreements on public health, and information on best practices in trade negotiations that might affect health.

Some countries are seeking a more integrated approach that would encompass all trade and health-related issues. One option is to establish specialized units within health ministries with overall responsibility for this area.

The report said greater interaction is needed between policy-makers and practitioners in the trade and health sectors to improve coherence of domestic and international policy. 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, and need to help colleagues in the ministries concerned with international trade to understand relevant aspects of public health at both national and international levels.

Such interaction requires research on the potential implications of trade agreements on health and of trade liberalization in health-related sectors on health-sector performance and health outcomes.

During discussions, Thailand congratulated the WHO Secretariat for its report. It said that trade liberalization has its pluses and minuses. Also, patents can generate research and development but they also bring high cost and exclusivity.

Bolivia said the issue of trade and health is both complex and difficult. It added that other international organizations often comprise the same Member States but have a vast difference in mandates. Specifically referring to the difference between the WHO and the WTO, Bolivia said although their acronyms differ by only one letter, they have quite different perspectives Sometimes, policy makers in trade often do not take into account the health-related consequences of globalization.

Portugal said that implementation of the Doha Declaration (on TRIPS and Public Health) has been slow. "We need more policy coherence between health and trade as the Secretariat paper states."

Namibia commented that anti-retrovirals are lifesaving medications. Medicines should not be subject to the same rules as other commodities. Noting that TRIPS flexibilities are important, it had great concern that the WTO was unable to find a permanent solution to the Paragraph 6 problem of the Doha Declaration. There needs to be more collaboration between the WHO and WTO and between health and trade ministries.

Iceland remarked that the WHO report is a big step forward. "We need more cooperation between policy makers in these sectors."

Brazil stressed the need to find a balance between trade and health. It encouraged WHO to focus on the implications of bilateral free trade agreements and regional free trade agreements.

The Czech Republic recounted a bad experience with the World Bank which had called for health sector reform but only consulted the Ministry of Finance but not the Ministry of Health. Their advice had negative health consequences. The WHO needs to speak with a stronger voice on public health issues, it said.

Besides the Board members who spoke, some countries that are not on the Executive Board also joined in the discussion.

The US said that it did not share the enthusiasm shown by other countries toward the Secretariat report whose analysis it described as "superficial".The US added that it had real concerns about the nature of WHO's technical assistance activities and there is a perception that WHO's advice is against industry, free trade, and intellectual property.

The WHO secretariat responded that its technical assistance activities are demand driven and that it shied away from taking an active role.

The Board Chair said that the WHO should not shy away from advising Member States. Remarking that much mention was made of international free trade, he said "what we need is international fair trade."He added that "we do need a more humane approach to dealing with this issue; we face the risk of creating a 'Fourth World', the poorest of the poor, if we are not careful."

(* With contributions from Thiru Balasubramaniam and Marina Kukso of the Consumer Project on Technology.)