Trade Policy as Health Policy

Question 1

Trade liberalization

Answer 1

o Since the 1970s, we have seen countries collectively work together to increase economic integration by lowering trade barriers and reducing tariffs
o Theory that trade liberalization is good for growth, good for prices (lowers them), good for the economy, and ultimately good for health
o Others are more skeptical about the veracity of the empirical evidence supposedly underlying the health benefits of trade liberalization
o Trade agreements reshape societies, remaking the labor market, and altering the goods and services available in a country (and therefore the social determinants of health)

Question 2

Private-Public Partnerships (PPPs)

Answer 2

E.g., countries want to curtail the level of alcohol consumption

Three potential models:
o (1) Allow the private sector to regulate itself
o (2) Public regulation: curtails consumption through some government regulation
o (3) PPPs: relevant individuals from the private and public sectors (e.g., alcohol companies and public health professionals) come together in order to agree upon a solution

Patent regulation: pharmaceutical companies have a vested interest in ensuring that patents are protected and have a long longevity
o Evergreening: slightly altering the chemical compound of a drug in order to renew a patent, functionally blocking the emergence of any generic drugs

Question 3

Relationship between trade and health

Answer 3

Patents (pharma)
o Decreasing affordability of pharmaceuticals, and therefore reducing their availability

Nutrition
o Trade may reduce the impact of seasonal food insecurity, smoothing consumption patterns
o Import of unhealthy, cheap, nonperishable food commodities (i.e., ‘fast food’)

Price
o For some commodities, price caps can ensure access/lower prices

Tobacco/alcohol

Regulations
o Accepting another country’s baseline of acceptability
o Harmonization of standards allows firms to sell their goods and services more cheaply around the world
o Easier to remove/weaken regulations than it is to agree upon a new standard

Labor standards
o Usually, one of the costliest parts of production is labor time/costs
o Lower labor standards in many countries we import clothing from – higher income countries may choose to build factories in places that will allow for lower labor standards

Distributional consequences
o Do trade agreements increase income inequality?
- Trade agreements cause some industries/sectors to grow and others to shrink, and because jobs/skillsets are not necessarily transferable, unemployment leads to greater income inequality
- When tariffs are lower, reducing them more leads to only small gains in GDP, but larger distributional consequences
- Reduced wages for those in some sectors

Migration (‘brain drain’)
o Benefits wealthier partner of the trade agreement, but lowers the quality of healthcare services in the country workers are leaving
o Migration into urban centers  flareup of infectious diseases (e.g., tuberculosis); overpopulation, unsanitary conditions

Environment (climate change / global warming)

Medical technology
o New technology, treatments spread faster than ever before, in part due to globalization
o ‘Telemedicine’

Question 4

Economic trade agreements: effective? Harmful?

Answer 4

Evidence to suggest that economic trade agreements are sometimes successful in accomplishing their economic objectives, but a lot of the hypothesized pathways between trade agreements and health outcomes remain at the level of theory, association

What is the net effect? Does harm exceed benefits?