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
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
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
Globalization
economic opening
goods, services,
capital, people,
ideas, information
cross-border flows
international
rules and
institutions
national economy and
health-related sectors
risk
factors
household
economy
HEALTH
health
services
Globalization and Risks for
Health
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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
Emerging/re-emerging infectious
diseases 1996 to 2003
Legionnaire’s Disease
Multidrug resistant
Salmonella
Cryptosporidiosis
E.coli O157
SARS
BSE
E.coli non-O157
Typhoid
Malaria
E.coli O157
nvCJD
Lyme Borreliosis
Venezuelan
Equine Encephalitis
Dengue
haemhorrhagic
fever
West Nile Virus
Reston virus
Lassa fever
Yellow fever
Diphtheria
West Nile
SARS
Influenza (H5N1)
Fever
Echinococcosis
W135
Nipah Virus
Cholera 0139
Buruli ulcer
Ebola
haemorrhagic
fever
Cholera
RVF/VHF
O’nyongnyong fever
Reston Virus
Dengue
haemhorrhagic
fever
Human
Monkeypox
Cholera
Equine
morbillivirus
Ross River
virus
Hendra virus
E P I D E M I C
A L E R T
A N D
R E S P O N S E
Some WHO-facilitated
epidemic response in the field,
1998–2003
Microbes are unpredictable!
Globalization and Opportunities for
Health
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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
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
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.
Public health issues and
WTO rules
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Infectious disease control
Food safety
Tobacco
Environment
Access to drugs
Health services
Food security and nutrition
Emerging issues (biotechnology….)
WTO rules and Public health
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Goods: GATT
Technical barriers to trade: SPS, TBT
Intellectual property and trade : TRIPS
Services: GATS
Specific Health Issues and
Most relevant WTO Agreements
WTO RULES
HEALTH ISSUES
 Infectious Disease Control
 Food Safety
 Tobacco Control
 Environment
 Access to Drugs
 Health Services
 Food Security
Emerging Issues
 Biotechnology
 Information Technology
 Traditional Knowledge
SPS
TBT
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TRIPS GATS
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• Much common
ground between trade
and health
• Health concerns can
take precedence over
trade issues
Trade in Health Services and
GATS
• Trade in health
services: risks and
opportunities
• GATS - a public health
perspective
• WHO work; products
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
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
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
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
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
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
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
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
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
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)
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
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
Health implications of movement
of personnel
Opportunities
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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
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
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
“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
GATS and Health Sovereignty:
Significant Overlap
Scope
of
GATS
Health
Professional
Environmental
Distribution
Financial
Business
R&D
Health-related services
Scope of health
sovereignty
Entering the House
that GATS Built
GATS
(Services)
The House that GATS Built
Trade Liberalization
Preservation of the Right to Regulate Services
Multilateral Framework
Side Wall:
Market Access
Commitments
Back Wall:
Exceptions
GATS
(Services)
Front Wall:
General
Obligations
and
Disciplines
Side Wall:
National Treatment
Commitments
GATS Council
Floor:
Dispute Settlement
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
Distribution of commitments
across sectors
(Number of WTO members)
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50
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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.
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?
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 healthrelated 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
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 healthrelated 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.
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.
Globalization, Trade and Health
WHO’s role, activities, products
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 crossborder risks to public health security in the context of globalization.
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
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)
Macroeconomic and
trade environment
Macroeconomic and trade environment
State of domestic health care system
Mode 1
Current status
TIHS
GATS
Mode 2
(as mode 1)
Infrastructure &
regulatory capacity
Health
Policy
Capital
infrastructure
Mode 3
(as mode 1)
Mode 4
(as mode 1)
Current data/info
& evidence
Human
resources
Impact of
current trade
GATS TIHS
Data sources and
availability
Tourism/Courier
Transportation
Others
Culture & sport
Health & Social services
Education
Finance
Construction
Distribution
Environment
Telecommunication
Business
specific commitments
Scope of analysis
National treatment
Market access
Cross-industrial commitment
1. CB
2. CA
3. CP
4. PN
1
2
3
4
1
2
3
4
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