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Trade in Health Services and GATS Nick Drager M.D., Ph.D. Senior Adviser Department of Ethics, Trade, Human Rights and Health Law World Health Organization.

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Presentation on theme: "Trade in Health Services and GATS Nick Drager M.D., Ph.D. Senior Adviser Department of Ethics, Trade, Human Rights and Health Law World Health Organization."— Presentation transcript:

1 Trade in Health Services and GATS Nick Drager M.D., Ph.D. Senior Adviser Department of Ethics, Trade, Human Rights and Health Law World Health Organization

2 Trade in Health Services and GATS Context: public health in a globalizing world ; trade agreements important for public health Trade in health services: risks and opportunities GATS : a public health perspective WHO’s role, work, products

3 Public Health in a Globalizing World Health is on the global policy agenda Achievements in health are critical to Millennium Development Goals Domestic action alone - no longer sufficient New context (rules, actors, markets, tools) requires new responses

4 HEALTH health services risk factors household economy national economy and health-related sectors Globalization economic openingcross-border flows international rules and institutions goods, services, capital, people, ideas, information

5 Globalization and Risks for Health Exclusion from developed markets/economic shocks Lack of access to knowledge and technology Cross-border transmission of disease Marketing of harmful products and unhealthy behaviours Environmental degradation Conflict

6 Cryptosporidiosis Lyme Borreliosis Reston virus Venezuelan Equine Encephalitis Dengue haemhorrhagic fever Cholera E.coli O157 West Nile Fever Typhoid Diphtheria E.coli O157 Echinococcosis Lassa fever Yellow fever Ebola haemorrhagic fever O’nyong- nyong fever Human Monkeypox Cholera 0139 Dengue haemhorrhagic fever Influenza (H5N1) Cholera RVF/VHF nvCJD Ross River virus Equine morbillivirus Hendra virus BSE Multidrug resistant Salmonella E.coli non-O157 West Nile Virus Malaria Nipah Virus Reston Virus Legionnaire’s Disease Buruli ulcer SARS W135 SARS Emerging/re-emerging infectious diseases 1996 to 2003

7 Microbes are unpredictable! Some WHO-facilitated epidemic response in the field, 1998–2003

8

9 Globalization and Opportunities for Health Globalization and Opportunities for Health Wider dissemination of knowledge/technology Incentives for R&D for diseases of the poor Resources for effective interventions New rules to control cross border risks

10 Globalization and Health New context - New responses Global Health Governance - international collective action Global public goods for health - investments beyond the means or incentives of any single government - new vaccine development for neglected diseases

11 Health and Trade Effects of trade liberalisation on public health Trade liberalisation: removal of impediments to trade in goods and services Public health: organised measures (whether public or private) to prevent disease, promote health or prolong life of the population as a whole.

12 Public health issues and WTO rules Infectious disease control Food safety Tobacco Environment Access to drugs Health services Food security and nutrition Emerging issues (biotechnology….)

13 WTO rules and Public health Goods: GATT Technical barriers to trade: SPS, TBT Intellectual property and trade : TRIPS Services: GATS

14 Specific Health Issues and Most relevant WTO Agreements

15 Much common ground between trade and health Health concerns can take precedence over trade issues

16 Trade in Health Services and GATS Trade in health services: risks and opportunities GATS - a public health perspective WHO work; products

17 Trade in Health Services Globalization of health Cross border delivery- telemedicine; e-health Consumption abroad- patients travelling across borders for diagnosis and treatment Commercial presence- establishments of hospitals, clinics through FDI, joint ventures, alliances, mergers Movement of personnel - doctors and nurses practising in other countries

18 Implication of globalisation of health services Impact of liberalised trade in services on the access to cost, quality of services What policies, regulations should be in place to ensure that trade in health services increases equity in health and is in the interest of those in greatest need What collective action across countries, at regional and global level is needed to take advantages of emerging global opportunities and mitigate potential risks : promote policy coherence

19 Cross border delivery of services Shipment of laboratory samples, diagnosis and clinical consultations -mail Electronic delivery of health services Telehealth- telediagnostic, surveillance and consultation services (USA hospitals to CA and EM) Telepathology (India to Bangladesh, Nepal) E-health - products and services available over internet

20 Health implications of cross border delivery of services Opportunities Enable health care delivery to remote and underserviced areas -promoting equity Alleviate some human resource constraints Enable more cost -effective surveillance of diseases Improve quality of diagnosis and treatment Upgrade skills, disseminate knowledge through interactive electronic means

21 Health implications of cross border delivery of services Risks Given lack of telecommunications and power sector infrastructure - telemedicine may not be cost effective Capital intensive, possible diversion of resources from basic preventive and curative services Hurt equity if it caters to a small segment of the population - urban affluent

22 Consumption abroad Movements of patients to the country providing the service for diagnosis and treatment Movement of health professionals for receiving medical education and training abroad

23 Health Implications of consumption abroad Opportunities For exporting countries Generate foreign exchange earnings to increase resources for health Upgrade health infrastructure, knowledge, standards and quality For importing countries Overcome shortages of physical and human resources in speciality areas Receive more affordable treatment

24 Health implications of consumption abroad Risks Create dual market structure May crowd out local population -unless these services are made available t local population Diversion of resources from the public health system Outflow of foreign exchange for importing countries

25 Commercial presence Establishment of hospitals, clinics, diagnostic and treatment centers and nursing homes and training facilities through foreign direct investment -cross border mergers and acquisitions- joint ventures and alliances Opportunities for foreign commercial presence in management of health facilities and allied services, medical and paramedical education, IT and health care

26 Health Implications of commercial presence Opportunities Generate additional resources for investment in upgrading of infrastructure and technologies Reduce the burden on public resources Create employment opportunities Raise standards, improve management, quality, improve availability, improve education (foreign commercial presence in medical education sector)

27 Health Implications of commercial presence Risks Large initial public investments needed to attract FDI If public funds/subsidies used - potential diversion of resources from the public health sector Two tier structure of health care establishments Internal brain drain from public to private sector Crowding out of poorer patients, cream skimming phenomena

28 Movement of personnel Includes doctors, nurses, paramedics, midwives, consultants, trainers, management personnel Factors driving cross border movements  wage differentials between countries  search for better working conditions and standards of living  search for greater exposure, training and improved qualifications  demand and supply imbalances between receiving and sending countries Approach towards mode 4 trade in health services by exporting and receiving countries varies - some countries encourage outflow, others create impediments

29 Health implications of movement of personnel Opportunities From sending country Promote exchange of knowledge among professionals Upgrade skills and standards (provided service providers return to the home country) Gains from remittances and transfers From host country Meet shortage of health care providers, improve access, quality and contain cost pressures

30 Health implications of movement of personnel Risks From sending country Permanent outflows of skilled personnel - brain drain Loss of subsidised training and financial capital invested Adverse effects on equity, availability and quality of services

31 General Agreement on Trade in Services (GATS) GATS is one of the most important trade agreements to emerge from the Uruguay Round negotiations that created the World Trade Organization (WTO)  Services are one of the fastest growing areas for many economies  Services of many kinds play important roles in the protection and promotion of health  GATS provides the multilateral legal framework for liberalizing international trade in services GATS creates numerous challenges for people working in public health  GATS is a complex legal agreement that borrows from existing international trade law to create new rules for services  GATS has become the subject of significant controversy, especially with respect to how the Agreement will affect health-related services and health policy

32 “Tale of Two Treaties” Problem Debate about GATS’ impact on health policy has created a “Tale of Two Treaties” problem for health policy communities  GATS is the worst of treaties—GATS undermines the exercise of national sovereignty for health purposes  GATS is the best of treaties—GATS respects health sovereignty through its flexibility, which allows each WTO member to shape its obligations according to its national needs and interests The “Tale of Two Treaties” problem makes it difficult for the health policy communities to understand how the complex law of GATS may or may not affect their work

33 GATS and Health Sovereignty: Significant Overlap Scope of GATS Scope of health sovereignty Health-related services Health Professional Environmental Distribution Financial Business R&D

34 Entering the House that GATS Built GATS (Services) Health Sovereignty

35 The House that GATS Built GATS (Services) Trade Liberalization Preservation of the Right to Regulate Services Multilateral Framework Front Wall: General Obligations and Disciplines Side Wall: Market Access Commitments Side Wall: National Treatment Commitments Back Wall: Exceptions Floor: Dispute Settlement GATS Council

36 Progressive Liberalization and Health Policy WTO (WHO) members will face decisions whether to liberalize trade in services through market access and national treatment commitments, including trade in health-related services GATS 2000 round of liberalization negotiations potentially affects health policy in two areas:  Evaluating requests from other countries for, and offers to other countries of, specific commitments for market access and national treatment  Negotiations on GATS rules

37 Distribution of commitments across sectors (Number of WTO members)

38 Managing the GATS Process from a Health Policy Perspective: Principles Liberalized trade in health-related services should lead to an optimal balance between preventive and curative services Involvement of both private industry and civil society is important to ensure that liberalization of health-related services promotes participatory health policy. Improving access and affordability of health-related services should be a goal of liberalization of trade in health-related services. Developing countries, and least-developed countries in particular, deserve special consideration in the process of liberalizing trade in health-related services. The status of health as a human right should inform and guide proposals to liberalize trade in health-related services.

39 Managing the GATS Process from a Health Policy Perspective: Key Questions To what extent is the sector already open to foreign service providers, and what have been the regulatory concerns posed by existing foreign competition? Do the commitments fit the strategies and directions identified by national health policy? What effect would the commitments have on government-provided health services? What regulatory burdens would the commitments create for the government in health-related sectors? Would the commitments eliminate or weaken regulatory approaches necessary for the protection and promotion of health? What evidence and principles can be brought to bear to analyze the possible effect of the commitments? Can the commitments be crafted both to protect health policy and to liberalize trade progressively?

40 Managing the GATS Process from a Health Policy Perspective: Check List Identify a focal point for trade in health-related services within the Ministry of Health Establish contacts and systematic interactions with trade and other key ministries and with representatives from private industry and civil society Collect and evaluate information on the effect of existing trade in health- related services within the country Obtain legal advice on GATS and other international agreements that may affect trade in health-related services Develop a sustainable mechanism for monitoring the impact of trade in health- related services Utilize the assistance provided by the WHO on matters concerning trade in health-related services Subject all requests for, and offers of, liberalization of trade in health-related services, to a thorough assessment of their health policy implications

41 Managing the GATS Process from a Health Policy Perspective: WHO Recommendations Get Your House in Order: National stewardship of the health system in the context of GATS requires a sophisticated understanding of how trade in health- related services already affects and may affect a country’s health systems and policy. Know the Whole House Not Just Select Rooms: The GATS process can affect many sectors that related to health, which places a premium on health ministries understanding the importance of a comprehensive outlook on trade in health-related services.

42 Managing the GATS Process from a Health Policy Perspective: WHO Recommendations Remember Who Owns the House: GATS provides countries with choices and does not force them to make liberalization commitments that are not in their best interests. If a country is unsure about the effects of making specific commitments, it is fully within its rights to decline to make legally binding commitments to liberalize, or to liberalize unilaterally without making binding commitments. Home Improvement Means Health Improvement: Health principles and criteria should drive policy decisions on trade in health-related services in the GATS negotiations.

43 Globalization, Trade and Health WHO’s role, activities, products

44 Goals Trade and Health To achieve greater coherence between international trade and health policy so that international and multilateral trade rules maximize health benefits and minimize health risks especially for poor and vulnerable populations To build the knowledge base and strengthen capacity in member states and in WHO itself to recognize and act on a better understanding of the public health implications of multilateral trade agreements Globalization and Health To support countries in measuring, assessing and acting on cross- border risks to public health security in the context of globalization.

45 Key products/activities 2004 Knowledge base development Legal reviews: GATS from a public health policy perspective; SPS from a public health policy perspective Trade and Health Notes for policy makers Handbook on Trade in Health Services and GATS Handbook on the Rapid Assessment of the Economic Impact of Public Health Emergencies of International Concern - using SARS as a case study Essential database for trade in health goods and services Continuation of Working Paper Series including - Implementing Para 6 of the Doha declaration - TRIPS and Public Health Technical support for WHO's Commission on IP, Innovation, and Public Health

46 Key products/activities 2004 Tools and training Distance learning courses - Trade and Health ; Global Public Goods for Health Development of an assessment tool to identify key cross border risks (communicable disease, macroeconomic shocks, environmental … ) to public health security Research and Training Initiative - Trade and Health - with selected universities Country support Interregional and national workshops on trade and health eg for countries in WTO accession negotiations Support for trade and health country analyses -(? as inputs into WTO Trade Policy Reviews and Integrated Framework for LDC’s)

47 Macroeconomic and trade environment

48 Scope of analysis specific commitments Cross-industrial commitment Business T elecommunication Construction Distribution Environment Finance Education Health & Social services Culture & sport Tourism/Courier T ransportation Othe rs National treatment Market access 1. CB 2. CA 3. CP 4. PN Stewardship Resource generative Service provision Financing

49 Trade in Health Services and GATS Context: public health in a globalizing world ; trade agreements important for public health Trade in health services: risks and opportunities GATS : a public health perspective WHO’s role, work, products


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