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Thursday, December 30. 2004 4:18 AM
[AIDS-INDIA] Action Committee Against Amendment of the Indian Patents Act
Joint Action Committee Against Amendment of the Indian Patents Act
Declaration
It now seems certain that the UPA government will give effect to the
Third Amendment to the Patents Act through the promulgation of an
ordinance. The Amendment is ostensibly intended to introduce a
full-fledged product patent regime to make our patent legislation
compatible with TRIPs. The ultimate undoing of the Patents Act 1970
is thus sought to be accomplished in a non-transparent manner
without any deliberations in the Parliament.
Such a complex legilsation of far reaching importance should have
been a subject matter of a thorough, public examination by an
Independent Commission. At the minimum, it should have been referred
to the deliberative bodies of the Parliament such as a Joint
Parliamentary' Committee or the relevant Standing Committees of the
Parliament for their considered views and recommendations.
Government seems to be deliberately avoiding such a course of action.
What are the arguments put forward in justification of this ■
extraordinary attitude on the part of the Government and how valid
are they? It is stressed that the TRIPs obliges us to introduce the
product patent regime with effect from 1.1.2005 which leaves little
time for any other course. It is also being argued that thequota
regime restraining our textiles and garments exports will be coming
to an end on 31.12.2004 under another Agreement of WTO viz.;
Agreement on_Textiles..and.Clothing(A TC) and there is linkage
between TRIPs and ATC agreements; in other worlds, if we do not
implement the requirement under TRIPs, the developed countries (USA
and EU, in particular) would go back on their commitment to end
quotas on textiles and garments exports.
Both the arguments are ill conceived and misleading. The WTO can not’
circumscribe the sovereign right of our supreme legislative
authority to deliberate and decide upon such an important piece of
legislation. The dissolution of the earlier Lok Sabha, the General
Elections that followed and the short time at the disposal of the
present Lok Sabha since the inception of the UPA government are but
normal features of the functioning of our democratic polity which
12/30/2004
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sometimes result in delayed passing of some pieces of legislation.
Moreover, it is always open to introduce legal provisions to give
retrospective effect to certain amendments where necessary. Indeed
in the case of the provisions relating to the introduction of the
exclusive marketing rights in our Patents Act, such a course of
action was followed in the recent past.
In the instant case, the option of prescribing 1.1.2005 as
the "priority date" for the proudct patents can also be used in
order to ensure compatibility with the TRIPs obligation. In this
background, it is unthinkable that any member of the WTO would
suggest punitive action against us for the alleged delay in
complying with the dateline prescribed by TRIPs. It is clear,
therefore, that the bogey of 1.1.2005 is being raised to obfuscate
the whole issue and preclude trasparent deliberations on the issue
involved.
As regards the so-called linkage of textiles and TRIPs, it should be
remembered that the abolition of the discriminatory regime of quotas
on textiles exports has been the major demand of developing
countries in GATT much before the WTO came into being.
The restrictive and discriminatory regime embodied in successive
Multi Fibre Agreements (MFAs) was recognised to be anti-GATT and,
therefore, no "price" or "quid pro quo" was ever contemplated in
order to restore the application of GATT law to textiles.
The mandate of the Uruguay Round of Negotiations finalised in
September 1986 included the goal of "eventual phase out of MFA",
while the substantive matters relating to Intellectual Property
Protection (IPRs) figured in this mandate only as late as April
1989.
Most important, the developed countries have recently tried their
best to seek extension of the quota regime of ATC beyond 31.12.2004
through some proxy moves but have failed and the meeting of the WTO
Council on Trade in Goods (CTG) held in October 2004 has
categorically rejected any reopening of the question.
It is, therefore, misleading to suggest that some developed
countries would resort to unilateral action against us by re
imposing quotas on our textile exports beyond 31.12.2004 only on the
ground that we need a little more time to fulfill our due process of
democratic deliberations on matters of far reaching importance in
regard to the Amendment of the Patents Act.
The last few years starting with the Seattle meeting of WTO in 1999
have witnessed a remarkable change in the world opinion on the issues
pertaining to IPRs, particularly where TRIPs regime threatens to
adversely affect the human rights in regard to health care.
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Academics have questioned the rationale of TRIPs having been made
part of the world trade order and recognised the unequal nature of
the bargain foisted on the peoples of the third world in the
process.
Activists and statesmen the world over have expressed concern about
the anti-people and pro-MNCs tilt to TRIPs. The spreading incidence
of HIV-AIDS. particularly in poor African countries, on the one
hand, and the tendency of the MNCs to profiteer out of the misery,
on the other, has stirred the conscience of the world and exposed
the inherent dangers of the IPR regimes constructed mainly to
enhance the profits of MNCs.
The need to fully exploit the niches of flexibility available in
TRIPs so as to redress the tilt in favour of the MNCs has now been
universally recognised. In sharp contrast to this changing
perception, the Government is adoptng a simplistic, conformist
approach of hurriedly "aligning" our Patent Law to the coercive
version of TRIPs.
The need of the hour is to follow a more creative and independent
approach, while still remaining within the broad contours of TRIPs.
With this end in view, a number of concrete suggestions have been
submitted to the Government. The amendments/modifications proposed
related to the vital matters of
(i) definition and scope of patentability;
(ii) the subejct matter that is under the mandatory review provided
in TRIPs;
(iii) eschewing retrospective protection to proudct patent rights not
visualised in TRIPs;
iv) ensuring continued availability, at affordable prices, of
medicines brought into the market with due approval of Government
during the transitional period between 1995 and 2005;
(v) the need to fully exploit the flexibility provided in TRIPs in
regard to issue of Compulsory Licenses and also the possibility of
exports thereunder;
prescribing
(vi)
a salutary ceiling for payment of royalty to the
right holders to avoid escalation of costs of medicines etc. to be
produced under Compulsory Licenses;
(vii) maintaining the provision in the Act allowing "Pre-Grant
Opposition" to avoid/minimize proliferation of non-serious claims
for patent rights; and finally,
(viii)
permitting "parallel imports".
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We regret that the response received from the Government is totally
disappointing. Not one of our proposals in the core areas mentioned
above seems to have found favour with the Government. It is a matter
of deep concern that the response of the Government shows little
awareness of the basic public interest issues involved.
It seems to be following the line of the previous NDA government
without any fresh thinking or reservation, whatsoever. It has
remained oblivious of the sea change that today characterizes the
world opinion in regard to the unequal global regime of TRIPs.
What is worse, it is reinforcing the tilt in favour of the MNCs by
refusing to avail itself of the niches of flexibility in TRIPs.
Worst of all, it is doling out untenable and misleading arguments to
support its course of action.
In the circumstances, we reiterate our resolve to oppose the Third
Amendment Ordinance. We appeal to all members of the Parliament to
consider the momentous issues at stake and join hands to defeat the
proposed Amendment to the Patents Act when the ordinance would
eventually come up before the Parliament for approval.
We appeal to all right thinking sections of our people, the working
class and the intellectuals in particular, to come forward to launch
the following massive protest actions against the non-transparent and
anti-people stance adopted by Government.
Action Programme:
1. Immediate joint demonstration at Delhi.
2. Joint Conventions at Kolkata, Mumbai, Chennai, Pune, Bangalore,
Hyderabad, Bhopal, Punjab and other places. These Conventions should
be completed by the end of January, 2005.
3. A Central Demonstration at Delhi (March to Parliament) on the
second day of the opening of the Budget Session in February, 2005.
Sd/- S.P. Shukla
(Former Member Planning Commission)
Sd/- Dr. Vandana Shiva
(Research Foundation for Science, Technology and Ecology)
Sd/- B.K. Keyala
(National Working Groupb on Patents)
Sd/- Dinesh Abrol
(All India Peoples Science network)
Sd/- S.R. Pillai
12/30/2004
Page 5 of 8
(President, All India Kisan Sabha)
Sd/- P.K. Ganguly
(CITU)
Sd/- A.K. Basu
(TUCC)
Sd/- T.K. Mitra
(FMRAI)
Sd- A.K. Bhatnagar
(AI1EA)
S
Sd/- Harish Sharma
(BEFI)
Sd/- M.K. Pandhe
President, CITU
Released to the Press
Joint Action Committee Against Amendment of the Indian Patents Act
Report of the meeting held at the CITU Central Office, 13-A, Rouse
Avenue (near ITO), New Delhi on 21.12.04.
The meeting was presided over by Com. Dr. M.K. Pandhe and attended by
the following:
M.K. Pandhe, President, CITU; Dr. Vandana Shiva (Research Foundation
for Science, Technology and Ecology); Mohanlal, General Secretary,
Delhi State CITU, Sudhir Kumar, President, Delhi State CITU; S.
Ramachandran Pillai, President, All India Kisan Sabha; P.K. Ganguly
(CITU); Basudev Acharya, MP, Lok Sabha; S.P. Shukla (Former Member,
^Planning Commission); B.K. Keayla (National Working Group on
Patents); T.K. Mitra (FMRAI); A.K. Basu (TUCC); A.K. Bhatnagar
(AREA); D.K. Abrol (AIPSN/DSF); Harish Sharma (BEFI).
The meeting discussed about the proposed Third Patents (Amendment)
Bill to allow product patenting. P.K. Ganguly gave the
introductions, Com. Pandhe briefed about the purpose of the meeting,
to prepare a joint front to oppose the amendment. The Govt, was
likely to promulgate an ordinance.
Sri SP Shukla explained about the situation and the danger of the
amendment. Two amendments were earlier made. The third amendment
would formally allow product patenting.
He exposed the misleading propaganda being made by the Govt, by
12/30/2004
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linking it to the Agreement on Textiles which would phase out the
Multi Fibre Agreement by 31st December, 2004 removing the quota
system for exports by the developing countries. He further exposed
the bogey of amending the Patents Act by 1.1.05. He suggested for
joint movements and opposition in Parliament by the MPs, so that the
bill cannot get through when brought in Parliament.
Dr. Vandana Shiva pointed out that not only pharmaceuticals, the
amendment of the Patent Act would severely damage agriculture. She
urged that joint movements by all mass organisations including the
peasantry, agricultural labour, students, youth and women are
necessary.
Sri B.K. Keayle briefed about the activities of the National Working
Group on Patents and the joint struggles ever since the Govt, started
amending the Patents Act.
Com. Basudev Acharya said that the Govt, had already planned to
promulgate the ordinance after the current session ended on 23rd
December. He assured to mobilise MPs to oppose the Bill when it
comes in the Parliament.
Com. S.R. Pillai informed about the ceaseless efforts being made by
the left to stall the move taken by the Govt, to amend the Bill.
Despite delegations meeting the Prime Minister, the Govt, remained
insensitive to the opposition. He suggested several action
programmes on an all India level to oppose the amendment.
Dinesh Abrol of All India Peoples Science Net Work suggested
formation of the Joint Action Committee to launch united movement
against the amendment.
Delhi State Committee of CITU suggested immediate demonstration at
Delhi if the ordinance is promulgated and assured to mobilise the
workers.
Decisions:
The meeting unanimously decided the following action programmes:
1. A demonstration will be organized at Delhi immediately after the
promulgation of the Ordinance, with a press conference.
2. Joint Conventions to be organized at Kolkata, Mumbai, Pune,
Chennai,
Hyderabad, Bhopal, Bangalore, Punjab and other places. All these
Conventions to be completed by January end.
3. The Conventions to mobilise for a central demonstration (March to
Parliament) at Delhi on the second day of the opening of the Budget
Session (in February, 2005).
4. Sri SP Shukla was given the responsibility to bring out a small
12/30/2004
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booklet on the Patents Act.
5. A Joint Action Committee was constituted with P.K. Ganguly as the
Convenor.
(P.K. Ganguly)
Convenor
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12/30/2004
Another Globalisation IS possible
With the prospects of 'revolution' receding during the nineties, efforts
towards various forms of solidarity and collective struggles received a serious
setback.
The turn of the century, however, saw a resurgence at Seattle, and subsequent ly
at various other meetings of international neo-con(servative) institutions like the
World Bank and WTO, and at other gatherings like the World Economic
Forum.
There has also been an impressive response in support ofthe World Social Forum
processes that attempt to broadbase the opposition to the type of globalisation
represented by 'neo-liberalism and domination ofthe world by capital'.
And recently the imperialist actions of the US in Iraq drew widespread protests
on an unprecedented scale.
These protests have kindled a new hope among those who have 'kept thefaith'.
Is thisfor real? Is there a real convergence?
Or are we seeing too much into these surges and waves of protest and
affirmation ?
Anti-War Upsurge
IC.ELDOC10708281
by Aijaz Ahmad, Fronlline, February 28, 2003
Excerpts
Anti-War Upsurge
By Aijaz Ahmed
Millions of people poured into the streets of the world in protest against the
United States' aggressive moves against Iraq, marking the convergence of the
global movements against corporate globalisation and imperialist war. Close
to a million people marched in Rome on February 15 to protest against their
government's collusion with the United States on the question of the imperial
blitzkrieg against Iraq; over a million marched in London on the same day, in
the largest public demonstration in British history. In between, 90,000
protesters had gathered in Glasgow outside the hall where Blair was
addressing a Labour Party conference. Meanwhile, a poll showed that 51 per
cent of Britons considered him "Bush's poodle" and a staggering 90 per cent
disapproved of his will to make war on Iraq.
Forty-one American Nobel laureates in science and economics issued a
declaration on January 27 opposing a preventive war against Iraq without
wide international support. These are, by no means, people who would
otherwise be identified with a peace movement. Among them are Hans A.
Bethe, an architect of the atom bomb; Walter Kohn, a former adviser to the
Defence Advanced Research Projects Agency at the Pentagon; Norman F.
Ramsey, a Manhattan Project scientist who readied the Hiroshima bomb and
later advised the North Atlantic Treaty Organisation (NATO), and others of
their kind.
This outpouring of humanity against an imperial war, which has not even
begun, on the scale at which it is being planned, is of course deeply
connected with the anti-globalisation movements, which have also become
global in scale over the years, doing their work in a thousand locales across
continents and periodically holding the various Social Forums which then
culminate in the World Social Forum. Indeed, it was at the time of the
European Social Forum (ESF) in Florence, Italy, that the first of the really vast
anti-war rallies had taken place; 40,000 attended the ESF but ten times that
many marched against the war. This convergence of movements against
42
POLITICAL MOBILISATION
01
corporate globalisation with movements opposed to imperialist war may
well prove to be the forerunner of an authentic anti-imperialist movement of
the 21 st century. A notable feature of these anti-war mobilisations, as in the
anti-globalisation movement, is that these consist overwhelmingly of young
people, or of older people who have never marched before in their lives. The
other equally important feature is the sheer breadth of the anti-war sentiment.
What may prove decisive in building a truly anti-imperialist movement is the
massive unrest and dissidence within the working class.
... the protesting multitude of 15 million people who poured into the streets of
the world in something of a global chain really was vast and unprecedented. It
began in Auckland, on the southeastern tip of the empire and gave to New
Zealand easily the largest anti-war demonstration in its history. Next was
Melbourne with 200,000 in the streets, and the centre of gravity in this human
wave kept shifting as the sun itself moved westward. The epicentre was in
Western Europe, especially the three countries of 'Old Europe' - the United
Kingdom, Italy and Spain - whose governments are identified with the U.S.;
Barcelona had seen nothing like this since the fall of General Francisco Franco
three decades ago. Fifteen thousand in Paris and close to half a million in Berlin
were a fraction of what the multitudes would have been if their governments
had not broken with Washington.
North America was in the next lime zone and 400,000 gathered in New York
even though the city government, backed by an extraordinary ruling by a Judge,
had banned a march. This was synchronised with protest marches in roughly
300 small and medium-sized towns across the U.S. A hundred thousand people
came out in Montreal and 80,000 in Toronto, in the largest peace
demonstrations in the history of the two cities. What had begun in Auckland
ended 48 hours later in neighbouring Australia, with a quarter million marching
in Sydney. The sun had gone full circle, and it was dawn of another day. War
against the planet had brought forth the first planetary rebellion against it.
This remarkable shift in the U.S. towards a fairly generalised anti-war
sentiment in labour unions, city councils and the populace at large - not just
in the larger and more cosmopolitan cities but deep into what Americans call
'middle America' - is taking place in the context of great scepticism among
intellectuals, opinion makers and professionals of various kinds.
Global Solidarity
43
Using the very tools and processes of communication and media management, of
the current dominant form of globalisation, these surges of dissent and of
affirmation for the need of a different world, signify a turningpoint.
Are we developing newer forms of international processes and institutions? Are
these appropriatefor what we want to achieve ?
There is something else that we in India need to look at.
The 'occidental developmental world-view' is lurking within us. How easily we
consider the rallies and protests that took place only in the developed world to
have taken place the 'world over'!
When these protests look place, India was quiet. There was the tired flailing of
fists, and the odd hoarse shouting, most of it from the usual suspects- the
organised, conventional left. Is it that we felt that anyway most of our country
people felt as we did, the war was and is wrong? Will that explain that just a
few of the converted, ogam mostly the conventional left, rallied in India at the
time of all those protests and rallies of the lastfewyears?
We were well represented at those events abroad, but where was the country
wide upsurge in support of ourpeople there?
The upsurge that A ijaz talks about is confined to the West, and to some extent to
Latin America.
There’s a lot ofground to cover before Another Globalisation is Possible!
44
POLITICAL MOBILISATION
> 01
Sustaining Localisation
Throughout the world, agriculture is in crisis. Farmers are going bankrupt while
international trade in food is booming. Every year, the distance between
producers and consumers rises, to the point where the average American meal has
now traveled more than 1,500 miles before it arrives on the dinner table. Is there
an antidote to this spreading agri-sickness ?
Globalisation of thefood economy enriches a small number of agri- 'businesses'.
In India we have the phenomenon where the state's granaries are spilling over,
while at the same time there are starvation deaths! And as the WTO rules come
intoforce the situation is getting worse...
These trends are directly linked to each other.
Helena Norberg-Hodge and Steven Gorelick give an overview of the political
economy of localisingfood in their article ■ Bringing the Food Economy Home.
Today, roughly half the world's people, mostly in the South, still derive a large
proportion of their needsfrom local economies. What can globalisation offer this
majority, other than unrealistic promises? Localisation not only entails far less
social and environmental upheaval, it is actuallyfar less costly to implement. In
fact, every step towards the local, whether at the policy level or in our
communities, brings with it a whole cascade of benefits.
Bringing the Food Economy Home, by Helena Norberg-Hodge and Steven
Corelick. International Society for Ecology and Culture, UK,
http://www.isec.org.uk/articles/bringing.html. (C.ELDOC6006689]
'Paryavarana Parasa', an invitation to Dharti Utsav, The Timbaktu
Collective,June2003 IC.ELDOC6007775]
'Community Crain Bank: An Alternative Public Distribution System' in
Institutional Development in Social Interventions by Vijay Padaki and
Manjulika Vaz. Sage, New Delhi, 2003. [B.Q80.P60I
Excerpts
Bringing the Food Economy Home
Hodge and Steven Corelick
Localisation is essentially a process of de-centralisation - shifting economic
activity into the hands of millions of small- and medium-sized businesses
instead of concentrating it in fewer and fewer mega-corporations.
Localisation doesn't mean that every community would be entirely selfreliant; it simply means striking a balance between trade and local
production by diversifying economic activity and shortening the distance
between producers and consumers wherever possible.
Where should the first steps towards localisation take place? Since food is
something everyone, everywhere, needs every day, a shift from global food to
local food would have the greatest impact of all.
What is 'global food'?
Global food is based on an economic theory which says that instead of
producing a diverse range of food crops, every nation and region should
specialise in one or two globally-traded commodities, which they can
produce cheaply enough to compete with every other producer. The
proceeds from exporting those commodities are then used to buy food for
local consumption. According to this theory, everyone will benefit.
The theory, as it turns out, is wrong. Rather than providing universal benefits,
the global food system has been a major cause of hunger and environmental
destruction around the world.
The environment has been hit particularly hard. The global system demands
centralised collection of tremendous quantities of single crops, leading to the
creation of huge monocultures. Monocultures, in turn, require massive
inputs of pesticides, herbicides and chemical fertilisers. These practices
systematically eliminate biodiversity from farmland, and lead to soil erosion,
eutrophication of waterways, and the poisoning of surrounding ecosystems.
18
BIO-REGIONALISM
2*
01
Since global food is destined for distant markets, food miles have gone up
astronomically, making food transport a major contributor to fossil fuel use,
pollution, and greenhouse gas emissions.
Social and economic costs
As farms have become larger and more mechanised, the number of farmers
has steadily declined. Further, most of what we spend on food goes to the
middlemen, not farmers. In the US, for example, distributors, marketers, and
input suppliers take 91 cents out of every food dollar, while farmers keep only
9 cents. As global corporations take over food marketing, small shopkeepers
are also being squeezed out.
In the South, the globalisation of food is driving literally millions of farming
families from the land. Dolma Tsering, a farmer in Northern India, described
what has happened in her village: "Whole families used to work on the land.
We grew almost everything we needed. Now imported wheat is destroying
our market. It's just not worth going to the trouble of producing food
anymore, and the village is being emptied of people." Thoughout the South,
most of those displaced people will end up in urban slums - without
community, without connection to the land, without a secure and healthy
food supply.
The declining quality of food
Because of the global food system, people around the world are induced to
eat largely the same foods. In this way, farm monocultures go hand in hand
with a spreading human monoculture, in which people's tastes and habits are
homogenised in part through advertising, which promotes foods suited to
monocultural production, mechanised harvesting, long-distance transport
and long-term storage. New additives and processes like UHT milk are
continual ly developed to extend storage time.
For harried consumers, food corporations also provide 'convenience' foods
that can be re-heated quickly in a microwave, and even items like 'macaroni
and cheese on a stick', which can be eaten with one hand. Nutritional
content? We're told not to worry, since some of the nutrients destroyed in
processing can supposedly be reinserted. Flavour? Hundreds of additives are
on hand to mimic the taste and texture of real food. Food quality? With
producers in a competitive race to the bottom, it's not surprising that food
Localise the food economy
19
poisoning cases are steadily increasing, and new diseases like BSE have
appeared.
Decades of government support for global trade have concentrated wealth
and power in ever larger corporations, which increasingly dominate every
aspect of the global food supply - from seed and feed to everything on
supermarket shelves. Today just two companies, Cargill and Archer Daniels
Midland, control 70 to 80 percent of the world's grain trade. One
agribusiness, Philip Morris, gets ten cents out of every American food dollar more than that earned by all US farmers combined.
Benefits ofthe local
Local food is, simply, food produced for local and regional consumption. For
that reason, 'food miles' are relatively small, which greatly reduces fossil fuel
use and pollution. There are other environmental benefits as well. While
global markets demand monocultural production, local markets give farmers
an incentive to diversify. Diversified farms cannot accommodate the heavy
machinery used in monocultures. Diversification also lends itself to organic
methods since crops are far less susceptible to pest infestations.
Local food systems have economic benefits. Most of the money spent on food
goes to the farmer, not corporate middlemen. Juan Moreno, a farmer in the
Andalucian region of Spain, told us, "When we used to sell our vegetables to
supermarkets we got almost nothing for them. Now, through the local co-op,
we're getting much more - three times as much for some vegetables."
Small diversified farms can help reinvigorate entire rural economies, since
they employ far more people per acre than large monocultures. In the UK,
farms under 100 acres provide five times more jobs per acre than those over
500 acres. Moreover, money paid as wages to farm workers benefit local
economies far more than the money paid for heavy equipment and the fuel to
run it.
Food quality
Local food is usually far fresher - and therefore more nutritious - than global
food. It also needs fewer preservatives or other additives, and organic
methods can eliminate pesticide residues. Farmers can grow varieties that are
best suited to local climate and soils, allowing flavour and nutrition to take
20
BIO-REGIONALISM
01
precedence over transportability, shelf life and the whims of global markets.
Animal husbandry can be integrated with crop production, providing
healthier, more humane conditions for animals and a non-chemical source of
fertility.
Even food security would increase if people depended more on local foods.
Instead of being concentrated in a handful of corporations, control over food
would be dispersed and decentralised.
More Food, LowCost?
Many believe that the global food system is necessary because it produces
more food and delivers it at a lower price. In reality, however, the global food
system is neither more productive than local systems nor is it really cheaper.
Studies carried out all over the world show that small-scale, diversified farms
have a higher total output per unit of land than large-scale monocultures.
Global food is also very costly, though most of those costs do not show up in
its supermarket price. Instead, a large portion of what we pay for global food
comes out of our taxes - to fund research into pesticides and biotech, to
subsidise the transport, communications and energy infrastructures the
system requires, and to pay for the foreign aid that pulls Third World
economies into the destructive global system. We pay in other ways for the
environmental costs of global food, which are degrading the planet our
children will inherit.
Localise the food economy
21
How do we go local?
Local food systems have immense advantages, but most policymakers - in the
belief that more trade is always better - systematically support the further
globalisation of food. As a result, identical products are criss-crossing the
globe, with no other purpose than enriching the corporate middlemen that
control the global food supply.
An immediate first step would be to press for policy changes to insure that
identical products are not being both imported and exported. If we eliminate
needless trade in everything from wheat, milk and potatoes to apple juice and
live animals, the reduction in transport alone would bring immediate
benefits. What's more, if people around the world were allowed to eat their
own bread and drink their own milk, giant corporations wouldn't profit every
time we sit down to eat.
Such a step would require a rethinking
of 'free trade' dogma. Trade treaties
need to be rewritten, reestablishing the
rights of citizens to protect their
economies and resources from
corporate predators.
At the same time, subsidies that now
support the global food system need to
be shifted towards more localised
systems. Governments have spent
tremendous sums of taxpayers' money
to prop up a costly food system which
pretends to provide 'cheap' food. If
even a fraction of that sum were
devoted to supporting local food
systems instead, the cost of local food would decrease substantially, and its
availability rapidlygrow.
Shifts in energy policy - which now heavily subsidise the large-scale
centralised energy systems needed for global trade and industrial
'development' of all kinds - are critically important. In the South, where the
energy infrastructure is still being built up, a shift towards a decentralised
renewable energy path could be easily implemented, at a fraction of the cost
22
BIO-REGIONALISM
________________________ 4 01
in dollars and human upheaval that huge dams, nuclear power and fossil
fuelsentail.
We also need to recognise the importance of local knowledge to maintain
existing local food systems, and to reclaim those that have been largely lost.
Today, a one-size-fits-all educational model is being imposed worldwide,
eliminating much of the knowledge and skills people need to live on their
own resources, in their own places on the earth.
Changes in tax policy would also help to promote food localisation. Now, tax
credits for capital- and energy-intensive technologies favour the largest and
most global producers. Meanwhile the more labour-intensive methods of
small-scale diversified producers are penalised through income taxes,
payroll taxes and other taxes on labour.
Re-regulating Global Trade, Deregulating Local Trade
As we've seen, the steady deregulation of global trade and finance has led to
the emergence of giant corporations whose activities are highly polluting and
socially exploitative. This in turn has created a need forevermore social and
environmental regulations, along with a massive bureaucracy to administer
them. That bureaucracy is strangling smaller businesses with paperwork,
inspections, fines, and the cost of mandated technologies. The regulatory
burden is too great for the small to bear, while the big happily pay up and
grow bigger as their smaller competitors die out. How many dairies have
gone out of business because they had to have stainless steel sinks, when
porcelain had served them well forgenerations?
Today, there is an urgent need to re-regulate global trade, by allowing
national and regional governments to control the activities ofTNCs. At the
same time, there is an equally urgent need to de-regulate local trade, which
by its nature is far less likely to damage human health and the environment.
Turning the tide
These policy and regulatory shifts would open up space for thousands of
community-based inititatives - many of them already underway - to flourish.
From CSAs and box schemes to farmers' markets, food co-ops, and buy-local
campaigns, people have already begun the hands-on work needed to rebuild
Localise the food economy
23
their local food systems. But these efforts will fall short if government policies
continue to tilt the playing field towards the large and global.
When government ministers blindly promote trade for the sake of trade while
at the same time discussing reductions in CO2 emissions, the possibility of
sensible policy shifts can seem remote. And so it is, unless activists and other
citizens unite behind the anti-global and pro-local banners, and exert
powerful pressure from below. Already, unprecedented alliances have been
created. Environmentalists and labour unionists, farmers and deep
ecologists, people from North and South - are all linking hands to say 'no' to
an economic steamroller that destroys jobs as quickly as it destroys species,
that threatens the livelihood of farmers while driving up the price of healthy
food in the marketplace.
Still more work is needed, however, including education campaignstoreveal
the connections between our many crises, to spell out the truth about trade
and the way we measure progress, and to graphically describe the
ecological, social, psychological and economic benefits of localising and
decentralising our economies.
Shortening the links between farmers and consumers may be one of the most
strategic and enjoyable ways to bring about fundamental change for the
better. How satisfying it is to know that by taking a step which is so good for us
and our families, we are also making a very real contribution to preserving
diversity, protecting jobs and rural livelihoods and the environment, all over
the world. i'
In India, many groups have started reviving the notion among the community to
grow local varieties, organically, and for local consumption, to beat this cycle.
From the semi-arid deccan region, we have the examples of the Paryavaran
Parsa, a celebration of local diversity and enduring tradition, and Community
Grain Banks, an initiative among women and dalits. These are but two of the
scores and hundreds of such initiatives that presage an essential step that will
make another world possible.
24
BIO-REGIONALISM
01
Paryavarana Parasa (Environmental Festival)
(Adapted from an invitation to the Dharti Utsav facilitated each year by
The Timbaktu Collective in the Rayalseema area of Andhra Pradesh)
This is a celebration
of (he commons and
the common peoples of our land
of Forest dwellers. Farmers,
Fisher folk and Healers
This is a celebration
The Timbaktu Collective has been striving to
rejuvenate and regenerate the natural
resources and the traditional genetic base of
this area and to revitalise the Traditional Art
forms - all three being in a state of degradation.
The Collective along with a number of local
Panchayats and peoples organisations
celebrate every Environment day, as
of how two thirds of our
population
"Paryavarana Parasa" (Environment festival).
meet their survival needs and
The intention, is to provide understanding and
help the rest of the nation survive
This is a celebration
of the commons and
the rich and abundant biodiversity
of Agriculture, Artisanry and
inspiration to (he common-people to regain
control over their natural resources and their
traditional genetic base in order to combat
drought and continue to live a sustainable
agricultural lifestyle.
The Exhibition & Food stalls have
Forests
ft
Traditional
seeds
-
both
crops
and
of all the commons and
indigenous tree and bush seeds are being
collected from the local farmers and forests.
the wisdoms on nurturing nature
and nature
of healing, growing, living and
Proper documentation is being done so that
we will be able to display the history of all the
seeds collected. Seeds will also be made
reciprocating.
available for sale. In an attached space, Mr.
Narayan Reddy, a well-known organic farmer,
This is an assertion of the rights
will conduct four workshops through the two
days for interested farmers;
This is a celebration
which predate that very word!
ft Traditional tools - tools used traditionally in household chores, agriculture, fishing
and traditional hunting are being collected for display;
Traditional herbal remedies - local mendicants have been contacted and they will
display a number of herbs, roots, leaves and flowers, with charts explaining
methods of preparing medicines and emphasizing certain diseases that are widely
prevalent in the region. The mendicantswill also be available for consultations.
To us this is another social forum, a bio-regional one.
Localise the food economy
25
Excerpts_______________________ _____ __________
'Community Grain Banks : An Alternative Public
Distribution Sytem'
by Vijay Padakiand Manjulika Vaz
Zaheerabad in Medak District of Andhra Pradesh is a dry region in the
Deccan. Traditionally, farmers in the region practiced rainfed agriculture
and the main crop was jowar (sorghum) interspersed with some pulses and
some greens. Recently, many of the rich landowners shifted to mono
cropping, preferring to grow cash crops. The poorer and smaller landowners
as well as the landless were wage labourers on the large farms. They paid
very little attention to their own few acres of land. They were highly
dependent on the landlords for both wage earnings as well as food security.
The shift to cash crops resulted in less employment, more land left fallow,
degradation of cultivated land due to ecologically unsound practices, and
threatened food security for the poor.
The Deccan Development Society (DDS) initiated programmes to develop
the neglected land of the small / marginal farmers. The programme was
initiated through village level organizations of women (sangams) from the
marginalized communities. They carried out earthworks (such as bunding,
water harvesting etc.) to break in this almost barren land. They also
encouraged employment of people on their own land. Most important they
revived traditional multi-cropping practices, which included legumes. This
helped the refertilization ofsoil. The impact of all this was manifold :
► Regeneration of the land which led to a three-fold increase in its
productivity.
► People regained confidence in the worth of their efforts.
> There were increased earnings per household.
► There was improved food security for every household.
This overall improved situation encouraged the sangam women to put more
land under cultivation. In the late '80s they negotiated collective leasing of
cultivable fallow lands from the larger, richer and mostly absentee
landowners. DDS helped with a loan for the lease money. The crop - raising
tasks were shared and managed by sangam women themselves. The
programme led to changes in the social organization of farming, including
the social status traditionally associated with farming. It was acknowledged
that there was a shift - from men to women engaged in farming, from higher
caste groups to dalits taking the lead.
26
BIO-REGIONALISM
01
A Setback
All this effort received a great setback in the early '90s from a statewide
politically initialed programme introducing rice through the Public
Distribution System at Rs.2 per kilogram. What was the need now for farmers
to till their own lands, expend time, energy and resources when there was
such an easy, cheap and attractive substitute? This step was hugely
detrimental for the local region on many counts - agricultural, ecological,
nutritional and cultural.
> Rice is produced in resource-rich irrigated belts at a distance from this
region, thus supporting the big farmers, the transport lobbies and the
nexus of middlemen.
► Rice is culturally alien, and not part of the daily diet. Il is also a 'seductive'
cereal, white, shiny, easy to cook, requiring no processing. The real
problem, however, is that in comparison with the traditional staple diet of
coarse grains rice is very low in nutritional value, if it is not complemented
adequately with pulses, milletsand beans.
A Return To Local Alternatives
It took a few years for the women of Zaheerabad to see the damaging impact
of rice on their lives. Among other things, their families felt weaker, they were
getting anaemic, and were not strong enough to do their hard jobs. The
sangam women deliberated over these issues during their meetings. DDS
animators facilitated the thinking with information on the situation - almost
100,000 hectares of land had been left fallow as a direct result of the PDS rice
scheme. About half a million woman-days of wages were being lost. Fodder
for their cattle, fencing material for their field and roofing for their houses was
reduced. There was quite some pressure to get the Rs.75 per month to
purchase the PDS rations which would come to the village for only two days.
The women knew that they had to reclaim their fallows, work on
regenerating it, and produce their traditional grains. This is when the idea of
not only producing but also collectively storing and distributing the local
produce was born.
It started off as an experimental project in one village in 1993. They needed
finance of Rs.2500 per acre. No bank would offer them a loan for a dryland
crop. They approached the Ministry of Rural Development through DDS with
a project proposal for an alternative PDS through a Community Grain
Fund. That was ini 994.
In each village the women identified 100 acres of fallow land belonging
mostly to marginal farmers. The modalities of the project were worked out
Localise the food economy
27
with the farmers as project partners. The
required money was advanced over a
three year period to the farmers for
ploughing, manuring, sowing and
weeding in a timely manner. The money
was Io be repaid in the form of grain. Rates
were fixed in advance for the grain to be
repaid over the three years, thus avoiding
the influence of market fluctuations.
Repayment schedules were worked out, and formal agreements were drawn
up and signed. Committees of women were set up to look after all the
activities of the project in each village. In turn they selected about 20 acres
each, which they supervised personally. The women became the managers
of the scheme, and handled complex management tasks.
Operations
The grain was collected by the village committees. This constituted the
Village Crain Bank. The collection is done in a decentralized way. (Storage of
sorghum in bulk is difficult.) Natural and indigenous storage and pest control
methods were employed.
The next step in the system was a method of grain distribution. An innovative
democratic process was followed to arrive at a wealth ranking within the
community. The objective was for the grain bank to cater differentially to the
needs of the poorer families. The criteria for assessing rural poverty were
evolved in a participatory exercise by the villagers themselves. An
assessment of every household in the village was done on a five-point scale.
Each level of ranking was identified with a different colour. In the large village
map drawn up, each house was marked in a specific colour after much
deliberation. The households selected for grain distribution at the end of this
open and transparent process received a sorghum card from the sangam with
the colour coding for the ranking clearly indicated.
The card entitled the household to 25 kilograms of sorghum per month at a
subsidized price of around Rs.2 per kilogram for six months starting from the
rainy season. This is when wage earnings are low and food is scarce. The
proceeds from the sale of the grain were deposited in a bank as the
Community Grain Fund, which goes towards reclaiming more fallows, and
extending the reach of the food security scheme. it*
For more see : Food Security (or Dryland Communities, By P V Satheesh, Director, Deccan
Development Society, http://www.ddsindia.com/toodsec _dryland.hlm |C.ELDOC6007488|
28
BIO-REGIONALISM
By Radha Sharma
The Tinies of India, Ahmedabad
Times News Network
• February 5: Father Salim
Sheikh throws his five daughters,
all aged between 3-9 years, into the
Narmada river in Bharuch. He lat
er confesses to the killings citing
poverty and constant strife with his
wife as the reasons.
• February 9: Debt and domestic
problems drive yet another man,
Jayanti Nanji, to kill his wife and
two young daughters in a remote
village in Halvad taluka of Surendranagar. Later, he attempts suicide.
• February 11: Naltcar Moti stran
gulates his son and daughter with a
chain. He then commits suicide by
hanging himself from a tree near
Jambusaron Thursday.
Ahmedabad: In the last two weeks
itself, Gujarat has witnessed three
cases of parents killing their chil
dren and committing suicide in fits
of depression, mainly driven by
huge debts and family discord.
Experts say people wiping out
their families indicates the col
lapse of the social system that has
been on the edge since the earth
quake of 2001.
“Where is the ‘feel good’ factor?
The social system has collapsed,
governance has collapsed, the
economy has collapsed, law and or
der has collapsed. You may pull
wool over the world’s eyes by hyp
ing the state as 'Vibrant Gujarat’
but the reality is that a big per cent
of the state populace is snapping
under the unbearable socio-eco
nomic burden. What else can a
man do but kill those he cannot
feed?," quizzes co-ordinator of the
Ahmedabad Women’s Action
Group (Awag) Ila Pathak.
“The frustration of being help
less is manifesting as aggression
where a father is ready to kill his
children and free himself of all
miseries," says psychiatrist Dr
Mrugesh Vaishnav.
Mass suicides or homicide fol
lowed by suicide has also been on
the rise since the communal riots
in Gujarat. .At least five families
committed suicide after riots
ebbed in Ahmedabad. Poor eco
nomic condition led Meenaben
Panchai (32) of Ghatlodia to kill
herself and all her three children
— twin daughters Disha and Devrishi and son Darshan—by dousing
them with kerosene and setting
them and herself on fire on June
25,2002.
A similar reason forced Naren
dra Patel and his family to end their
lives in room number 1 of Awkar
Guest House in the Gita Mandir
area.
A failing book-binding business
led Popatbhai Prajapati (37) to com
mit suicide with his wife Kamud
and two sons Chetan (18) and
Mayur (15) at their residence on
Kathwada road in Naroda area.
Earlier, Saraswati Govind (65)
and three members of the same
family residing in the Goyal Inter
city complex, committed suicide
by consuming poison.
“It was never this bad in Gujarat
where people are known to brave it
out with the help of community
support. Mass deaths at such fre
quent intervals indicates the state
of mind of the people and immedi
ate intervention is necessary to
bring the people back from the
brink of hopelessness,” says psy
chiatrist Dr Hansal Bhachech.
Bhachech, who is also mental
health advisor to the state govern
ment, feels that the state should ini
tiate mental health screening in
primary health care centres to pre
vent depressed people from resort
ing to killing to escape from misery.
Tuesday, February 17, 2004
Killer parents signal collapse of social support system
Hl
n
i
■ PATENT ISSUES
A costly prescription
The United Progressive Alliance government's promulgation of an ordinance amending the Patents Act
of 1970, a model piece of legislation hailed around the world for checking exploitation by
pharmaceutical MNCs, draws international criticism.
SIODHARTH NARRAIN
■ z. New Delhi
ceuticals and agro-chemical products.
This enabled rhe growth of a strong local
generic drug industry, which produced
do same drugs as the MNO-' a-, •Marive'y
low prices (sec Table . When Indian
generics such as C-p:?. Ranbaxy ana
H.:?ero began manufacajing drugs, es
pecially for Human Immunodeficiency
Virus/Acquired Immune Deficiency
Syndrome (HIV/Al DS), at much lower
prices, the demand for these drugs grew
in countries that could not afford to buy
these drugs from MNCs.
on Tariffs and Trade (GATT) negotia
tions which began in Uruguay in 1986.
This international regime, given a final
shape in the TRIPS agreement in 1994,
was to control and govern almost all as
pects of intellectual property rights.
TRIPS had no caveats and no member
country could withdraw from it. The on
ly concession given to developing and
least developed countries (LDCs) was an
initial discretion in implementing die
provisions, which were to be progressiv
ely eliminated.
However, the derailment of the
WTO’s Seattle Ministerial Conference
in 1999 by anti-globalisation activists'
forced a rethink. The Doha Ministerial
Conference in 2001 adopted the Doha
NDIA’S patent legislation, hailed as a
1 model all around rhe world for its far
reaching provisions, is on the verge of
being amended. The Union Ministry of
^^mmerce has promulgated an ordi^Kice amending the Patents Act, 1970,
to fulfil India’s obligations under rhe
World Trade Organisation’s Agreement
on Trade-Related Aspects of Intellectual
Property Rights (TRIPS). The ordi
nance, promulgated in December 2004,
makes wide-ranging changes to the Act
EVELOPED countries first linked
and paves the way for a product patent
intellectual property rights with the
regime to replace the process patent sys development of trade, investment and
tem. A process patent only protects the services during the General Agreement
method or process that the patent holder
uses to manufacture a drug. This allows
other pharmaceutical companies to make
the same drug using a process different
from the one that is patented. The differ
ent versions of the medicine thus pro
duced are called generic drugs.
The British-framed Patents and De
signs Act (1911), which was in force un
til the 1970 Act was legislated, provided
for a product patent system. Prior to
.-l^fe, 85 per cent of medicines available
iiWndia were produced and distributed
by multinational corporations (MNCs)
and the prices of drugs in the country
were among the highest in the world.
The Parents Act was framed after
years of deliberation and on the basis of
the recommendations made by the Jus
tice Rajagopal Ayyangar Committee
(1958). The report of the committee,
which was constituted by the Central
government to revise the law relating to
patent and design, said: “[T]he monopo
ly created by patent and the reward to
the inventor by the grant of such mo
nopoly offer advantages which have been
claimed for the system only in highly
industrialised countries which have az
large capital available for investment in
industries and a high degree of scientific
and technological education.” The Act
Ciprofloxacin being manufactured at a factory of the German multinational Bayer
provided for process patents for pharma
A.G. A file picture.
D
FRONTLINE, FEBRUARY 25. 2005
97
Declaration in which countries agreed to
implement the TRIPS agreement in a
manner supportive of the WTO mem
bers’ right to rake measures to protect
“human, animal, plant life or health or of
the environment ar the levels it considers
appropriate”. India, along with Brazil
and South Africa, played a crucial role in
bringing together developing countries
on the issue (Frontline. December 7,
2001).
According to TRIPS, while develop
ing countries (which includes India) had
time until January 1, 2005, to enact do
mestic legislation to conform with the
agreement, LDCs were given time until
Comparison of drug prices, Indian and international
(in Indian rupees)
India
Drugs, dosage
and package details
Pakistan
Indonesia
United
Kingdom
SRB
United
States
Anti-infectives
Cirprofloxacin
500 mg. 10 tablets
29.00
393.00
1,185.70
2.352 3-i
Norfloxacin
400 mg, 10 tablets
20.70
1
130.63
304.78
• .843.68
Ofloxacin
200 mg. 10 tablets
40.00
<•'<••• JO
204.34
818.30
Cefpodoxime Proxetil
200 mg, 6 tablets
114.00
264.00
773.21
1,576 58
674.77
Anti-ulcerants
Diclofenac Sodium
50 mg, 10 tablets
3.50
84.71
59.75
60.96
Rantidine
150 mg, 10 tablets
6.02
74.09
178.35
247.16
863.59
Omeprazole
30 mg. 10 capsules
22?50
578.00
290.75
870.91
2,047.50
Lansoprazole
30 mg, 10 capsules
39.00
684.90
226.15
708.08
1,909.64
Cardiovasculars
Atenolol
50 mg, 10 tablets
7.50
71.82
119.70
N.A.
I
753.94
Amlodipine Besylate
5 mg, 10 tablets
7.80
200.34
78.42
338.28
1
660.21
Zidovudine
100 mg, 10 capsules
77.00
313.47
331.65
996.16
895.90
Zidovudine
300 mg, 10 capsules
274.00
N.A.
NA
4,767.02
4,988.62
6.00
35.71
57.50
262.19
I
Anti-viral/fungal
Anti-histamine
Caterizine
10 mg, 10 capsules
927.29
Anti-anxioltics/psychotics
Alpramazoo
0.5 mg, 10 tablets
7.00
160.57
31.05
N.A.
1
446.81
Fluoxetine
20 mg, 10 capsules
25.80
444.53
143.40
395.79
!
I
1,416.42
190.00
554.69
242.90
1,217.43
I
6,210.30
39.00
N.A.
565.95
537.74
210
N-A'
782.65
1,628.25
|
N.A.
48.00
N.A.
1,356.93
1,614.89
I
1,744.93
Antl-cancer
Boposide
100 mg, injection
Cholesterol reducer
Atorvastatin
10 mg, 10 tablets
1,102.92
Anti-asthmatic
Salmeterol
25 mcg
Urology
Sildenafil Citrate
50 mg, 4 tablets
Conversion rate of exchange considered
U.S. dollar - Rs.45.50, British pound Rs.83.51, Pakistani rupee - Rs.0.84, Indonesian rupiah - Rs. 0.005
Sources for prices: U.S. prices - Red Book 2002; U.K. prices ■ U.K. MIMS February 2004
Pakistan ■ Pharmaguide, June 2002-03
India - IDR November/December 2003
98
2016. Since the Indian patent regime did
not provide product patents for pharma
ceuticals and agro-based products, it be
came obligatory to provide for a “Mail
Box” facility for filing patent claims tq
protect these products with effect from
January 1, 1995. Similarly, those “Mail
Box” patent applications that satisfied
certain conditions were entitled to re
ceive exclusive marketing rights (EMRs)
for five years. The date of application of
TRIPS provisions, other than product
patents, was January I, 2000. The Indi
an government introduced the Patents
(Second Amendment) Bill in December
1999 in order co implement TRIPS pro
visions
r than product patent provi
sions. This BT was referred to a Joint
Parliamentary Committee. It was
amended on rhe basis of the recommen
dations made by the committee and
acted in December 2002. The Nariol^P
Democratic Alliance (NDA) govern
ment tabled a Bill in December 2003 to
introduce the product parents regime in
all fields of industrial economy. The Bill
lapsed when general elections were called
in March 2004. The United Progressive
Alliance (UPA) government’s ordinance
has made only minor changes to the Bill.
The amendment expands the scope
of what can be patented. Vandana Shiva,
director of the Research Foundation for
Science, Technology and Natural Re
source Policy, said: “The second amend
ment of the patent law opened up
agricultural patenting. It deleted old ex
ceptions; for example, plants were not
patentable earlier. With the third
amendment they have now brought
product patents. In agriculture, a prod
uct patent could mean that a company
may take the gene of a salinity-resi^fc\
rice variety, put it into a variety ofWR
through genetic engineering, and rake a
patent on it. But since the product pat
ent is on the trait or salinity resistance, it
means that any occurrence of that trait
without paying a licence fee is an in
fringement, and there are cases to this
effect. So, in the Basmati rice case, if we
had not defeated Rice Tech, there would
have been several cases of Rice Tech
claiming a patent and then having that
monopoly on the aroma and the size of
the grain.”
Vandana Shiva said: “While the gov
ernment was preparing to table the ordi
nance, it tabled another totally
unnecessary law called the Seed Act. The
Seed Act of 1966 was doing its job fine.
It provided for quality and reliability in
seeds. The farmer’s varieties were not
regulated. The new Seed Act undoes the
FRONTLINE, FEBRUARY 25. 2005
ucts and compete at the global level will
be hit hard by this amendment.
“Invention”, as defined by the ordi
nance, is too broad and could lead to
“ever-greening”, that is, filing parent ap
plications for new forms of older patent
ed drugs and of new uses of older drugs,
thereby blocking the entry of generic
drugs into the market. B.K. Keayla, con
vener of the National Working Group
on Patent Law, said: “China and the
United States define ‘invention’ broadly
in their patent laws and have to deal with
over three lakh claims annually. This
kind of volume will create chaos in In
dia.” The ordinance prohibits “mere new
use” for a known substance, which does
not clarify whether polymorphs, hy
drates, isomers, metabolites and so on are
patentable, which can lead to “ever
greening”. D.P. Shah, secretary of the
Indian Pharmaceutical Alliance, said: “A
good example is Aventis, which in 1979
obtained a patent for fexofenadine hy
drochloride. In 1996, Aventis obtained a
second patent for the same compound
claiming that it was a substantially pure
drug-”
Gajanan Wakankar, executive direc
tor of the Indian Drug Manu
facturers’ Association, said: "The
compulsory licensing provisions
are adequate only as far as the
conditions are concerned. But
g the procedures are extremely
’ lengthy and we feel that these
procedures will defeat the pur
pose. The procedures are such
that the patent holder has the up
per hand and can thwart the ap
plication of a compulsory licence
by delaying it.”
The ordinance reduces the
grounds for pre-grant opposition
and says that henceforth it will
only be treated as a representa
tion and not as a part}- to the
proceedings. It has a provision
for post-grant opposition direct
ed against the Controller who
grants the patent. Ironically, the
Controller will finally dispose of
the post-grant opposition. The
weakening of pre-grant opposi
tion makes it tougher to prevent
the filing of frivolous patents.
Commerce Minister Kamal
Nath described rhe ordinance as
an interim measure to fulfil InA pharmaceutical worker with a new antidia’s obligations within the stip
HIV/AIDS medicine, dubbed by government
ulated time. He stated that it
officials as the “world's cheapest anti-AIDS
would be discussed in detail in
cocktail”, at a laboratory In Bangkok,
the Budget session of Parliament.
Thailand. A file picture.
While justifying the provisions of
1966 Act. It now requires compulsory
registration of all farmers, which means
that any farmer growing his or her own
traditional varieties will be treated as illegal. This is the way this compulsory seed
registration has been used in other coun
tries to shut down the farmer’s seed sup
ply alternatives. Therefore I would say
that the implications for agriculture are
huge.”
The ordinance also makes patentable
computer software, which has technical
application in any industry or which can
be incorporated into hardware. This
could impede the development of soft
ware in the country. Richard Stallman,
the co-developer of the Linux/GNU op
erating system and proponent of free
software, said: “Ever}' programme is full
of implementations of various methods
how to do things. If each of those
Jnnputational methods could be patent
ed, then writing a programme can mean
infringing hundreds of patents.” Accord
ing to him, moving from a copyright to a
software patenting regime is a mistake
and will increase the cost of developing
new software. Indian software companies
which want to develop their own prod-
FRONTLINE. FEBRUARY 25. 2005
the ordinance, he claimed that the fear
that prices of medicines will spiral is un
founded because 97 per cent of all drugs
manufactured in India are off-patent and
will remain unaffected.
D.G. Shah said: “We have been told
a number of lies consistently by the gov
ernment. Our estimate is that drugs
The share of patented
drugs in the Indian market___
Therapeutic group
Under patent
[
(in per cent)
Antibiotics
40.23
Antibacteriols
98.80
System antifungals
25.66
Anti-leprotics
69.96
Cardiovascular
40.18
Non-steroidal anti-inflammatory
drugs (for conditions like arthritis)
22.16
Tranquilisers
74.12
Anti-convulsants
65.93
Anti-peptic ulcer drugs
65.92
Oral diabetics
55.30
Anti-asthmatics
47.53
Anti-histamines
21.34
Cytostatics and
anti-leukemic
32.41
Contraceptive
hormones
88.79
Source: ‘Indian Pharmaceutical Industry and Patent
Regime for Drug Security" by B. K. Keayla and Biswajit
Dhar, National Working Group on Patent Lans.
September, 1993.
worth Rs.3,000 crores will have to be
withdrawn from the market. Our total
market is worth $4.5 billion. PhRMA,
the association representing the U.S.
pharmaceutical industry, claims that its
members are losing $1.8 billion worth of
revenue lor 40 per cent of the total Indi
an drug marker] because there is no pat
ent regime in the country. If the U.S.
pharmaceutical industry is saying that 40
per cent of the market is eligible for pat
ent, on what basis is the Minister saying
that only 3 per cent will be eligible?” (see
Table 2).
There are an estimated 9,000 appli
cations for drugs pending in the “Mail
Box”. The government, in reply to a
question raised in Parliament, said that
there were 5,636 applications for drugs
in the “Mail Box”, of which 4,398 were
filed by foreign corporations. With 78
per cent of the patent applications for
drugs having been filed by foreign na
tionals and with the danger of “evergreening”, the prices of medicines are
likely to rise. I'hc government’ has said
that the prices ol life-saving drugs will
nor rise. But details of which drugs are in
the “Mail Box” have not been made pub
lic. “How docs one classify a disease like
cancer? Can one say cancer drugs are not
life-saving? If a drug is not listed as essen
tial medicine in the Drug Price Control
Order, does that mean it can be priced at
exorbitant rates?” asked Leena Menghaney, who is part of the Affordable Med
icines and Treatment Campaign
(AMTC), a coalition of non-governmen
tal organisations (NGOs), patient
groups and health care workers that cam
paigns for sustained accessibility and af
fordability of medicines in India. A
comparison of the generic and paten red
drug prices shows how drug prices me
likely to rise exponcmialiy (see Tab':? 3).
The government has to pass the =: refi
nance in the Budget session ■-LtLa
ment. While the NDA has. said
it
will oppose the ordinance, the j
ey
ries arc against it in its preseia rorm. D.
Raja, national secretary’ of the Commu
nist Party of India, said: “We have told
the government that we will oppose the
ordinance as it is not in the national
interest. It will have serious implications
for the pharmaceutical industry, agricul
ture and biodiversity. The government
will have to amend it drastically keeping
in mind the national interest. This is
bound to come up in rhe coming Budget
session and the Left parries will take up
the issue clause by clause.”
A detailed discussion on the contents
of the legislation with such far-reaching
impact is essential. Wakankar said: “It is
an important piece of legislation and
should be considered by either a joint
committee or a standing committee of
Parliament.” A.D. Damodaran, former
Director of the Council of Scientific and
Industrial Research’s (CSIR) Regional
Research Laboratory in Thiruvanthapuram, said: “Patent law is a techno-legal
document. It must be given to an expert
committee for consideration and the re
port of the committee should be made
At a retail medical outlet in Kochi, Kerala.
public.”
T INTERNATIONAL reaction to the
.1 ordinance has been critical. Indian ge
neric companies brought down the pric
es of antiretroviral therapy for
HIV/AIDS from $12,000 to $140 a
year. Bill Haddad, chairman and chief
executive officer of Biogenerics Inc., the
largest generic drug company in the
U.S., said: “Two-thirds of the world’s
population will be systematically de
prived of life-saving drugs as of January
1, 2005. Countries in Africa dependent
on Indian generic products, the WHO
[World Health Organisation] and AIDS
organisations worldwide have written to
the Indian Prime Minister asking him to
reconsider the ordinance.” Activists have
organised demonstrations against the or
dinance in front of Indian embassies
across rhe world. Olivier Brouant of the
Medecins Sans Frontieres said: “ARV
treatment is given to 25,000 HIV/AIDS
Prices ot cancer drugs that are already In the "mall box"
Active
pharmaceutical
ingredients
Therapeutics
Gefitinib
Anti-cancer
Brand
name
1 Package
details
Indian
generic
MRP
Patented
drug price
Astra Zeneca Iressa
250 mg,
$222.00
$1,802.00
$500.82
$1,835.00
$64.00
$873.00
S6.82
$224.30
$150.00
$254.00
Innovator
30 tablets
Temozolomide . Anti-tumour
Scheming
Temodar
Zoledronic acid
Anti-cancer
Novartis
Zometa
Letrozole
Anti-cancer
Novartis
Femara
250 mg,
5 capsules
1 4 mg,
1 vial
2.5 mg,
30 tablets
Ganciclovir
CMV infection j Roche
Cytovene
250 mg,
60 capsules
Source: National AIDS Control Association
100
patients worldwide. The Indian govern
ment has a big responsibility to the rest
of the world to ensure that these drugs
remain affordable.”
The New York Times said in an edi
torial on January 18 that the ordinance
was heavily influenced by multinational
and Indian drug-makers eager to sell pat
ented medicines to India’s huge middle
class. Describing the decree as “a double
hit that will cut off the supply of affor
dable medicines and remove generic
competition that drives down rhe cost of
brand-name drugs”, the newspaper said
that the ordinance was so tilted towards
the pharmaceutical industry that it did
not even take advantage of the rights
countries enjoyed under the WTO re
gime to protect public health.
There are options in TRIPS allov^^
countries to meet public health goals.
For instance, Article 31, or the compul
sory licensing provision, enables govern
ments of member-countries or third
parties authorised by these governments
to use the subject matter of the patent
without the permission of the patent
holder. Article 8 stipulates that “in for
mulating or amending the national pat
ent laws and regulations, members may
adopt measures to protect public health
and nutrition and to promote public in
terest in sectors of vital importance to
their socio-economic and technological
development . The ordinance contra
dicts the L'PA’s Common Minimum
Proeram;
which promises that the
government will “take all steps to ensure
availability of life saving drugs at affor
dable prices”.
FRON CLINE, FEBRUARY 25, 2005
DYING FOR TRADE:
Why Globalization Can Be
Bad for Our Health
Ronald Labonte, Ph.D.
°uno4
CZ
for.
RESEARCH
& EDUCATION
5 | i°K
SOCIAL
^JUSTICE
•?
'"“RESEARCH
^EDUCATION
The CSJ Foundation For Research and Education
conducts original research, produces training programs, and publishes
reports and educational materials on social and economic issues.
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CSJ Foundation for Research and Education
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This pamphlet is part of the Social Justice Series published by the
CSJ Foundation for Research and Education.
Other titles in the series include:
The Terrain of Social Justice
by Sam Gindin
And We Still Ain’t Satisfied: Gender Inequality in Canada
by Karen Hadley
Canada’s Democratic Deficit:
Is Proportional Representation the Answer?
by Dennis Pilon
Poverty, Income Inequality, and Health in Canada
by Dennis Raphael
From Poverty Wages to a Living Wage
by Christopher Schenk
Making It Your Economy: Unions and Economic Jusitice
by Charlotte Yates
Gimme Shelter! Homelessness and Canada’s Social Housing Crisis
by Nick Falvo
^ouN0-v/o
'"“RESEARCH
& EDUCAT I ON
Dying For Trade:
Why Globalization Can Be Bad for Our Health
by Ronald Labonte, PhD
The CSJ Foundation for Research and Education
Toronto
September 2003
Correspondence to:
Ronald Labonte, PhD
Director, Saskatchewan Population Health and Evaluation Research Unit
Professor, Universities of Saskatchewan and Regina
e-mail: Ronald.labonte@usask.ca
web: www.spheru.ca
ISBN 0-9684032-5-5
Layout and Cover Design:
Visualeyez creative
email: alanpinn@cogeco.ca
Disclaimer:
The contents, opinions, and any errors contained in this paper are those of
the author and do not necessarily reflect the views of the CSJ Foundation
for Research and Education.
© 2003 Ronald Labonte, PhD and The CSJ Foundation for Research and
Education
ounda>,
"^research
& Education
Contents
Introduction......................................................................................... 1
Globalization and Health: The Pros and Cons ............................... 2
Globalization and the Health Scorecard:
Unfulfilled Promises and Increasing Threats ..............................3
Poverty and Income Inequality ............................................. 4
The Environment and Sustainable Development..................6
Health Care, Privatization, and Trade Agreements ..........................8
NAFTA ................................................................................... 9
GATS.......................................................................................9
TRIPS (Agreement on Trade-Related Intellectual Property Rights)...................... 12
WTO Agreements and Health Determinants ............................... 13
What Can Be Done? ......................................................................... 16
Protect Our Health Through Promoting Public Services ... 16
Discriminate in Favour of Developing Countries................ 17
Reverse the Burden of Proof................................................. 18
Fines, Not Sanctions............................................................. 18
Human Rights Oversight..................................................... 18
Conclusion......................................................................................... 19
Endnotes............................................................................................. 21
References........................................................................................... 23
Figures and Tables:
Figure 1: Rising Global Inequalities: Income Ratio of the World’s
Wealthiest To Poorest 20% of Population, 1820 - 1999..................... 5
Box 1: The “Brain Drain” ............................................................... 11
Table 1: Commitments to Liberalize Health Services.................... 12
Acknowledgements:
I would like to thank the Centre for Social Justice, Greg Albo and John
Peters for their editorial assistance, and for their helpful comments on
my arguments and analysis.
DYING FOR TRADE:
Why Globalization Can Be Bad for Our Health
Introduction
Globalization - the increasing interconnectedness of people and
nations through economic integration, communication and cultural
diffusion — is not new. Jared Diamond, in his book, Guns, Germs
and Steel (1997), recounts how the history of most humankind has
been one of pushing against borders, expanding, conquering and
assimilating. Today’s globalization, many argue, is simply capi
talism’s attempt to complete this global colonization process. As
before, globalization may bring new benefits to societies. But such
expansionary processes also carry many risks, particularly for health.
These risks arise through globalization’s largely negative impacts on:
• Poverty and inequality— poverty being the single greatest
determinant of disease.
• The environment — the disease perils of over-consumption,
pollution and climate change are well known.
• The capacities of national governments - binding trade rules
and multi-lateral institutions like the World Trade
Organization limit the social and environmental ‘regulatory
space’ of national governments, and undercut institutions that
support public health and social well-being.
It is globalization’s impact on national authority that cause health
activists the greatest concern, since it can prevent governments from
enacting policies that lead to health and equity at the local levels
where people live, work and play. A concern for many health
activists is the impact of the General Agreement on Trade in Services
(GATS) on the growing trend towards health care privatization.
This paper examines the impact of trade agreements on our health
and health care system, and what governments can do to ensure that
health and human development are not sacrificed at the altar of‘free
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health.
trade.’ It begins with a discussion of how globalization affects our
global health through changes in economic growth, poverty,
inequality and the sustainability of our environment.
Globalization’s harshest impacts have yet to be fully experienced by
Canadians. But for the poor living in Africa, the former Soviet
republics, and much of Asia and Latin America, the adverse impacts
of globalization are lived daily. As Toronto’s recent scare with SARS
teaches us, our own health is increasingly threatened by ‘Diseases
without borders’. In this globalized world, we are posed with the
challenge of protecting not just the health of all Canadians, but the
health of everyone on the planet.
j
Globalization and Health: The Pros and Cons
First, let’s acknowledge that there are several potential health bene
fits of today’s globalization. The diffusion of new knowledge and
technology, for example, can aid in disease surveillance, treatment
and prevention. The globalization of gender rights and empower
ment can have tremendously positive health effects. In some poorer
countries, when women gain control over household income, they
usually invest it in their children’s health and education, which bene
fits the larger community as well as their own family. But these
benefits do not stem from free trade policies or from governments
attending ever more closely to the needs of big business.
There is also an oft-made economic argument linking globalization
with improved health. Liberalization, proponents claim, increases
trade. This, in turn, increases economic growth, which increases
|
wealth, which decreases poverty; and any decline in poverty auto
matically improves peoples’ health (Dollar, 2001; Dollar and Kraay,
2000). Improved health, particularly amongst the world’s poorer
countries, also increases economic growth (Savedoff and Schultz,
2000; CMH, 2001) and so the pro-liberalization, pro-globalization,
pro-health circle virtuously closes upon itself.
Sound in theory, this virtuous circle has, in fact, a vicious undertow.
This includes the increased adoption of unhealthy‘Western’
lifestyles, which underpins our growing global pandemic of obesity
I
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
(Lee, 2001). It has also worsened epidemic diseases in developing
countries. The World Health Organization estimates that almost
25% of disease and injury worldwide is connected to environmental
decline attributable to globalization, with 90% of malaria deaths
caused by rainforest colonization and large scale irrigation schemes,
which increase exposure to mosquitoes (WHO, 1997a). The diffu
sion of new health technologies to developing countries, in turn,
usually benefits the wealthy, often at the expense of already under
funded and fraying public health care systems for the poor.
As for ‘gender empowerment,’ there is emerging evidence of a global
‘hierarchy of care.’ Women from developing nations employed as
domestic workers in wealthy countries send much valued foreign
currency back home to their families. Some of this is used to
employ poorer rural women in their home countries to look after
the children they have left behind. These rural women, in turn,
leave their eldest daughter (often still quite young and ill-educated)
to work full-time caring for the family they left behind in the village
(Hochschild, 2000). Health gains increase for those higher up the
hierarchy; health risks accumulate for those lower down.
More fundamentally, trade and financial liberalization does not
inevitably lead to increased trade or economic growth. And even
when it does, such growth does not inevitably reduce health
damaging poverty, and almost always leads to health-damaging
inequality (Cornia, 2001; Weisbrot et al, 2001; UNDP, 2000).
Increased trade in goods also means increased use of fossil fuels,
more exploitation of already scarce environmental resources, and
more toxic pollution. The health damaging effects of all of these are
‘inherently global,’ since contaminants, like diseases, do not respect
borders.
Globalization and the Health Scorecard:
Unfulfilled Promises and Increasing Threats
Much remains to be understood about how globalization through
increased ‘free’ trade might harm or help peoples’ health. But we
now have twenty years experience of increased liberalization and
n
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
market integration through World Bank and International Monetary
Fund (IMF) ‘structural adjustment’ policies of liberalization and
privatization imposed upon poorer countries as loan conditions;
and ten years experience of enforceable trade rules in which
wealthier countries voluntarily agreed to essentially the same poli
cies. With respect to trends in two fundamental health-determining
pathways (poverty/inequality, and the environment), the impacts
have been largely negative.
Poverty and Income Inequality
The past decade has seen a reduction in global poverty rates at the
$I/day level, but a worsening in such rates at the $2/day level (BenDavid, Nordstrom and Winters, 1999).1 We might cynically
conclude that our recent era of globalization has successfully trans
ferred income from the extremely poor to the absolutely destitute.
Free trade promoters counter that this is simply because poor coun
tries have insufficiently globalized. If they had liberalized more, they
would have benefited more. But the empirical evidence doesn’t
support this claim, at least for poorer nations. A 1999 study of forty
developing and least developed nations found that trade openness
(liberalization) actually increased poverty. Those countries liberal
izing most rapidly fared worst (Rao, 1999).
This is not true for all countries, however, and there is still much
debate whether trade liberalization will eventually succeed in
reducing health-damaging poverty. But there is less disagreement
that trade liberalization is increasing inequality (see Figure 1).
.
Whether income inequality is the root of disease remains a
"
contentious topic amongst population health researchers (Deaton,
2001). Yet, as much recent evidence makes clear, across the world
inequalities are associated with declines in social cohesion, social
solidarity and support for strong states with strong redistributive
income, health and education policies that have been shown to buffer
liberalization’s un-equalizing effects (Deaton, 2001; Global Social
Policy Forum, 2001; Gough, 2001). The developing countries expe
riencing the greatest economic growth (China, Vietnam and India) are
also the ones experiencing the sharpest increases in income inequality.2
F
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
FIGURE 1: Rising Global Inequalities:
Income Ratio of World’s Wealthiest to Poorest 20% of the World’s
Population, 1820 - 1999.
160
140 -
120 -
■■ 1820
■i 1913
100 -
M 1960
lZO
80 -
1990
CO 1997
r::a 1999
60 -
40 -
20 -
0-
1820-1999. (Source: UNDP, 1999)
A recent ‘scorecard’ provides more evidence that globalization has
been far from equal in distributing its benefits. This scorecard
compares health, economic and development indicators for the‘pre
globalization’ (1960-1980) and ‘rapidly globalizing’ (1980-2000)
periods (Weisbrot et al, 2001). During the globalizing period,
economic growth per capita declined in all countries, but declined
most rapidly for the poorest 20% of nations. The rate of improve
ment in life expectancy declined for all but the wealthiest 20% of
nations, indicating increasing global disparity. Infant and child
mortality improvements slowed, particularly for the poorest 40% of
nations. The rate of growth of public spending on education also
slowed for all countries, and the rate of growth for school enrol
ment, literacy rates and other educational attainment measures
slowed for most of the poorest 40% of nations.
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
A study by Branko Milanovic, a World Bank economist (2003),
reached a similar conclusion: In the pre-globalization period, two
out of four of the world’s poorer regions grew faster than the
wealthier nations of Western Europe, North America and Oceania
(Australia and New Zealand). During the globalization era of the
last twenty years, this was reversed with growth in rich countries
outpacing that of any other region. The greatest beneficiaries from
the policies of today’s globalization have been the wealthy nations
largely responsible for creating its rules.
The Environment and Sustainable Development
There are two primary pathways linking globalization to the envi
ronment: (1) the liberalization-induced effects of growth on
resource depletion and pollution, and (2) increased transportation
based fossil-fuel emissions. Ecological limits to growth and
consumption are rarely considered in economic growth models, yet
if all countries ‘developed’ to the same consumption patterns found
in Canada and the US, our species would require four more planets
to exploit ((Footprints of the Planet Report, n.d.). There are also
numerous examples where trade and investment liberalization have
increased the pace of environmental damage.
The combined effects of deregulation, privatization, and weak
governmental controls on the Indonesian logging industry, imple
mented to increase economic growth through increased trade, have
lead to the loss of more than one million hectares of forest per year.
Health effects range from short-term and widespread respiratory
disorders associated with extensive burning to long term ecosystem
disturbances and potential climatic change (Walt, 2000). In
Uganda, trade liberalization in the form of industrial privatization
and tariff reduction on fishing technology contributed to over
fishing of the Nile perch in Lake Victoria, and a degradation of the
lake’s ecosystem and water quality (UNEP, 2001), with potentially
severe health impacts - about 20% of all deaths in children under 5
in developing countries are caused by unsafe or insufficient water
(WHO, 1997b).
B
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
Mauritania, a poor sub-Saharan African country, has sold fishing
rights to factory-ships from Europe, Japan and China to earn the
foreign currency it needs to pay back liberalization-induced foreign
loans. Meanwhile, fish, the staple protein for the country’s poor, has
largely disappeared from local markets (Brown, 2002). Child
malnutrition and health, previously improving, is now worsening
(Social Watch, 2002, 2003). In Argentina, trade liberalization and
promotion of fisheries exports led to a five-fold growth in fish
catches in the decade 1985-95. Fishing companies gained an esti
mated US $1.6 billion from this growth. But depletion of fish stocks
and environmental degradation has produced a net cost of US $500
million (UNEP, 2001). Loss of fish stocks increases food insecurity,
and public investments to rebuild stocks come at the cost of funding
essential health care or educational services.
There are also indirect climate change effects due to de-regulation of
foreign investment. A recent example of this was the Brazilian
currency crisis of 1998, precipitated by the greatest inflow and
outflow of speculative capital ever experienced by a developing
country (UNDP, 1999; de Paula and Alves Jr., 2000). The govern
ment lacked sufficient foreign reserves to stabilize its currency and
was forced to borrow from the IMF. The rescue package called for
drastic public spending cuts, including a two-thirds reduction in
Brazil’s environmental protection spending. This led to the collapse
of a multi-nation funded project that would have begun satellite
mapping of the Amazonian rainforest as a first step in stemming its
destruction. The loss of this program combined with ongoing
logging will have a profound impact on climate change, with long
term and potentially severe health implications for much of the
world’s populations (Labonte, 1999). Hopefully the Brazilian
government’s more recent commitment to set aside large tracts of
the remaining Amazonian rainforest will begin to change this bleak
assessment (Mitchell, 2002).
Most empirically-based projections of the environmental impacts of
trade liberalization show severe ecological damage (Labonte and
Torgerson, 2002). Especially damaging are agricultural and fisheries
subsidies, which go primarily to wealthier producers within wealthy
T]
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
countries, and wreak havoc on local production in poorer countries
by flooding the market with below-cost commodities that severely
damage the environment. WTO members in 2001 committed them
selves to “reductions, with a view to phasing out, all forms of [agri
cultural] export subsidies; and substantial reductions in trade
distorting domestic support” (WTO, 2001a). But the EU and Japan,
which heavily subsidize their domestic farmers, have been slow to
comply; and the US Bush Administration in 2002, despite the 2001
agreement, signed into law the largest increase in domestic farm
subsidies in American historyA There will be no winners from such
policies, and the biggest loser will continue to be the environment.
Health Care, Privatization, and Trade Agreements
Of course, our health is determined by much more than our envi
ronmental and economic conditions. Above all, our health care
systems determine the care we receive when sick. The concern for
many of us with globalization is how trade agreements affect the
increasing privatization of our public health care system. The
problem with increased privatization, alongside a ‘public’ system, is
that it leads to inequalities in access. As private health care expands
for those who can afford it, the higher salaries and better working
conditions it offers pulls health care professionals away from the
public system, leading to the public system’s slow decline or collapse.
In Brazil, for example, private health care currently provides 120,000
physicians and 370,000 hospital beds to the richest 25% of the
population, while the public system has just 70,000 physicians and j
565,000 hospital beds for the remaining 75% (Zarrilli, 2002a).
Another effect of increased health care privatization is a decline in
support for universal public programs by higher-income earners in
favour of‘user pay’ private insurance and private health care
systems.
Trade agreements are not the cause of today’s health care privatiza
tion. But trade agreements ‘lock in’ current levels of privatization
and can prevent any future expansion (or re-creation) of the public
system. There are three trade agreements with a direct bearing on
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
Canada’s public health care: NAFTA (North American Free Trade
Agreement), GATS (General Agreement on Trade in Services) and
TRIPS (Agreement on Trade Related Intellectual Property Rights).
NAFTA
NAFTA’s negative impacts on public health care arise from its
Chapter 11 provisions that permit private foreign companies to sue
democratically elected governments if their regulations result in
‘expropriation’ of real or potential earnings. Canada, for example,
withdrew its intent to legislate ‘plain packaging’ for cigarettes when
American tobacco companies threatened to sue our government for
‘expropriation’ of their intellectual property, i.e., their trademarks.
NAFTA does allow governments to expropriate foreign-owned
investments, but only if it is for a public purpose.
The problem for Canada is that because the provinces have allowed
health care privatization to increase in recent years, it is hard to
argue that our health care system is administered strictly for a public
purpose. This opens the door to NAFTA claims that measures to
expand public health insurance in Canada to prescription drugs,
home care and dental care, or to restrict private for-profit provision
of health care services, amount to expropriation and that compensa
tion must be paid to American or Mexican investors who are
adversely affected. Article 15 of the Free Trade Area of the Americas’
(FTAA) Chapter on Investment similarly allows investor-state suits.
It is currently “bracketed” text, meaning there is as yet no agreement
amongst the nations negotiating the FTAA on its content. Canadian
FTAA negotiators, however, are not calling for its removal.
GATS
The General Agreement on Trade in Services (GATS) is a WTO
agreement. There is considerable pressure from commercial services
groups, particularly in the US and European Union (EU), to use
GATS to open up government services for commercial and foreign
provision (Sinclair, 2000). European negotiators are urging greater
service liberalization because they see China as a lucrative market, as
I
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
that country dismantles its previous state welfare infrastructure
(Pollock and Price, 2000). Private US health care providers regard
GATS as the main vehicle for overcoming market access in countries
where public funding and provision currently predominate.
Health services liberalization, proponents claim, can lead to new
private resources to support the public system, introduce new tech
niques to health professionals in developing countries, provide such
professionals with advanced training and credentials, and introduce
new and more efficient management techniques (Zarrilli 2002b).
But there are powerful counter-arguments to each of these points. .
Private resources disproportionately benefit the wealthy and increase'
the regressive privatization of health systems. Private investments in
health services concentrate in services for the affluent that can afford
to pay for them (Lethbridge, 2002), undermining support for
universal, public provision of health services. Liberalization in the
movement of health professionals can worsen the already critical
‘brain drain’ from under-serviced poor countries to wealthier
nations (see Box 1). Finally, there is nothing preventing countries
from trading in health services in any of these modes without
making any commitments under the GATS agreement. The only
effect of such commitments is to make it extremely difficult for
countries to change their minds in the future.
To date, 54 WTO members have made commitments to liberalize
some health services under GATS (Adlung and Carzaniga, 2002).
(See Table 1) The number of health-liberalized countries grows to
78 if one includes private health insurance. The GATS agreement
has a built-in requirement for “progressive liberalization” meaning I
that countries can only liberalize more, not less. Once a service
sector has been committed under GATS, there is no cost-free way of
reversing it (Canadian Centre for Policy Alternatives, 2002). Canada
committed private health insurance under GATS in 1994. Should
Canada wish to extend its public system into areas that are privately
insured, and so reverse the current trend away from privatization,
this commitment could trigger trade penalties.
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
Box 1: The “Brain Drain”
Each year the global “brain drain” of trained health professionals
from developing to developed countries gets worse. Developing
countries are estimated to lose over US$500 million each year in
training costs alone of doctors and nurses who migrate to
wealthier nations (Frommel, 2002). The problem is most acute
for African countries, but also exists for many Caribbean coun
tries. Several Canadian provinces, such as Alberta and
Saskatchewan, have actively recruited health professionals from
South Africa to fill their own vacancies in rural communities
(Bundred & Levitt, 2000). The South African government in
2001 formally complained to the Canadian government over the
number of its physicians being allowed to take up practice in
Canada, yet in 2002 the number of South African-trained physi
cians in Canada increased by another 174, to total 1,738
(McClelland, 2002).
The problem is not simply active recruitment by wealthier coun
tries - a result of their own poor health human resource plan
ning - or even the “pull factors” of higher earnings and greater
opportunities available in other countries. There are also the
“push factors” of low salaries, lack of positions and little infra
structure for research or advanced training, problems that are
rooted in the under-development of public health systems in
poorer countries.
The GATS agreement offers an exception for “a [government]
service which is supplied neither on a commercial basis, nor in
competition with one or more service suppliers” (Article 1:3b). This
is often cited as evidence that concern over privatization is
misplaced. This clause, however, may collapse under an eventual
challenge, since most countries allow some commercial or competi
tive provision of virtually all public services (Sinclair, 2000; Pollock
and Price, 2000).
TT|
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
Table 1: Commitments to Liberalize Health Services
Service Category
Total WTO Members
WTO Developing
Country Members
Medical and dental services
54
36
Hospital services
44
29
Nursing and midwifery services
29
12
‘Other’ health services
17
15
(Source: Adlung & Carzaniga, 2001, 2002).
Health care is not like other commercial services. It is essential to
the creation and maintenance of a public good. Public systems for
health care arose in most countries because private systems proved
inadequate and inequitable. Whatever problems exist with health
care provision today, increased privatization and private sector
involvement is not the solution. Whatever forms of cross-border
exchanges in health services we might want to engage in, for all of
the positive reasons cited in favour of GATS, let us be clear on this:
Trade treaties — which are intended to promote private commercial
interests - are no place to negotiate international rules for health,
health care and other essential public goods such as education and
water/sanitation.4
TRIPS (Agreement on Trade-Related Intellectual Property Rights)
Unlike other WTO agreements, TRIPS does not ‘free’ trade, but
‘protects’ intellectual property rights, almost all of which are held by^
companies or individuals in rich countries. The TRIPS agreement ”
requires WTO members to legislate patent protection for twenty
years, although least developed countries don’t have to do this until
2016. One effect of the TRIPS agreement has been to increase
sharply drug costs in most countries, including Canada. This
decreases the amount of public funding available for primary health
care or other public programs in first world countries, where 75% of
prescription drug costs are publicly or privately insured. But it is
particularly hard on persons living in poor countries where the
health portion spent on drugs is already much higher and often a
direct personal cost.
n
J
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
The TRIPS agreement does allow countries, in cases of public health
emergencies, to issue compulsory licenses to generic drug manufac
turers. The Doha Declaration on the TRI^S Agreement and Public
Health (WTO, 2001b) strongly affirmed these provisions. But the
Doha Declaration failed to solve the problem of developing coun
tries that have to ‘parallel import’ these drugs from other countries
such as Brazil or India, something the TRIPS agreement currently
does not allow.
Last December, the US scuttled a complicated WTO deal that some
thought already watered down the Doha declaration (WTO, 2002).
After insisting on even more measures to prevent cheap generics
from entering rich country markets, and pleas from African coun
tries reeling from AIDS, a new compromise deal was struck. But
groups like Doctors Without Borders claim the new restrictions will
still price generics out of the reach of poor countries. The deal is a
far cry from the promise made in Doha, and many developing coun
tries view it only as stopgap.
WTO Agreements and Health Determinants
The risks that trade agreements pose to public health care systems
are real and need urgent attention. But health care is only one
determinant of our health. Other important determinants include
income, education, safe water and sanitation, healthy lifestyles,
employment, workplace and environmental health, and supportive
social relationships (what is sometimes today called “social capital”
or “social inclusion”). Each of these determinants is affected by
domestic public policies that, in turn, are increasingly affected by
trade agreements.
Some of these health-damaging effects are general in nature. Trade
liberalization lowers tariffs (taxes) on imported goods. This reduces
the amount of revenue that governments have to spend on health,
education, and environmental protection. Tariff reduction hasn’t
meant much for wealthy countries, such as Canada, which collect
less than 4% of their public revenue from tariffs (World Bank,
2000). But it has been hard on developing countries, which get
TH
M DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
much of their revenue from tariffs. Between 1980 and 1997, for
example, tariffs as a percentage of total national taxes fell from 48%
to 23% in Jordan, 50% to 16% in Sri Lanka, and 39% to 12% in
Botswana. In the past decade, the Congo Republic saw its interna
tional tariff share of tax drop from 21% to 6%, and Mauritius from
46% to 26% (World Bank, 2002). Few countries experiencing these
declines have been able to institute alternative revenue-generating
sources, and have not experienced sufficient growth in trade to offset
the drop (Hilary, 2001). This seriously reduces these countries’ abil
ities to provide public health, education and water/sanitation
services essential to health.
Trade liberalization can also damage the more fragile domestic
economies of developing countries. In return for World Bank and
IMF loans, Zambia opened its borders to cheap, often second-hand
textile imports. Its domestic manufacturing, inefficient by wealthier
industrialized nation standards, could not compete. Within eight
years, 30,000 jobs disappeared and 132 of 140 textile mills closed
operations, which the World Bank acknowledges as “unintended and
regrettable consequences” of the adjustment process (Jeter, 2002).
Huge numbers of previously employed workers rely on precarious
street vending. User charges for schools have led to increased
dropout and illiteracy rates. The Zambian government is now
seeking to undo most of these policies. But this is proving difficult
because of the extensive economic and social damage now existing.
Finally, liberalization of financial markets (investment) has led to
‘tax competition’ which, by one estimate, costs developing countries
over US$50 billion in foregone corporate taxes each year (OXFAM, (
2000). This is more than the estimated additional annual costs of
ensuring adequate health care for every women, man and child on
the planet.
Several WTO agreements specifically restrict the right of govern
ments to regulate for health and environmental protection. The
WTO Agreement on Sanitary and Phytosanitary Measures requires
that a country’s food and drug safety regulations be based on a
scientific risk assessment, even if there is no discrimination between
[74
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health ■
domestic and imported products (Drache et al, 2002). Canada
joined the US and Brazil in a WTO dispute to force the EU to accept
imports of hormone-treated beef. The EU does not allow the use of
these hormones on its cattle. There is also evidence that these
hormones may cause cancer in animals. But the WTO dispute panel
(which did not include any scientists) concluded that the EU failed
to conduct a proper scientific risk assessment proving that
hormones were a human health risk.5
The Technical Barriers to Trade Agreement requires that all domestic
regulations be “least trade restrictive,” and treat “like products” the
same. Domestic regulations can be higher than international stan
dards only if they can be justified. Canada used this agreement to
argue that France’s ban on the use of asbestos products was discrim
inatory since asbestos was “like” the glass fibre insulation France
allowed. Canada lost this case - the only such instance where the
WTO ruled in favour of health over trade - partly because of the
enormous amount of scientific data proving the cancer-causing risks
of asbestos (WTO, 2000)6. This certainty of proof is rarely the case
with most human or health hazards.
The Agreement on Trade-Related Investment Measures prevents coun
tries from placing performance requirements (such as requiring
local content) on foreign investment. Such requirements have been
used to benefit corrupt government officials or their families. But
they have also proven useful in the development of a viable domestic
economy, partly by ensuring health-promoting employment and
income adequacy for marginalized groups or regions. Similarly the
Agreement on Government Procurement requires governments to take
into account only “commercial considerations” when making
purchasing decisions, banning preferences based on environment,
human or labour rights. Currently a voluntary agreement to which
few developing countries have signed on, wealthy countries,
including Canada, are pushing to make this agreement mandatory
and binding on all WTO members.
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
What Can Be Done?
Governments have had a hand in creating today’s globalization by
negotiating multi-lateral trade agreements. They can also play a
major role in changing these agreements, and in shifting the trajec
tory of globalization away from purely economic objectives that
benefit elites, towards health and human development goals that
benefit everyone, especially the poor. If they are seriously
committed to social justice, governments - including our own must make the following policy changes.
Protect Our Health Through Promoting Public Services
There should be a full “carve out” from trade agreements of public
services essential to our health (health care, education, water/sanitation, occupational and environment health). To its international
credit, Canadian trade negotiators have listened to this repeated
argument from health and social policy activists, and have put their
trading partners on notice that Canada will not commit any of our
health, education or social services under GATS, nor ask that any
other WTO member do so. But our private health insurance
commitments remain a weak link and, more importantly, GATS
negotiations are ongoing with the intent to progressively liberalize
more services. Many observers believe that pressures to liberalize
health and other essential public services will continue to build
unless stronger and internationally agreed upon exceptions for such
services are created. There are at least two ways this can be done:
1. Negotiate a general exception in the GATS agreement freeing
any services related to health care, water/sanitation or educa
tion from the requirement for progressive liberalization; or a
full “carve out” of these services from any of the GATS “disci
plines” (trade penalties). A country could then withdraw
GATS commitments in these services at any time without
invoking a trade penalty.
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
2. Create international agreements on exchanges, including
trade and investment, in these services, outside of the WTO
structure and under the goal of achieving improved and
greater equity in health outcomes. The Canadian govern
ment is working on a similar agreement to protect cultural
diversity rights. Are essential health-promoting public
services any less important?
Discriminate in Favour of Developing Countries
Countries need strong domestic economies to create the income and
employment necessary to fund the public services essential to health.
As the Zambia story showed, today’s weaker economies cannot
become strong if they are forced to compete with goods and services
from already well developed economies. The WTO in its founding
documents recognized the need of developing countries for “special
and differential” (S&D) exceptions to trade rules that might other
wise damage their domestic economy or for which they lacked the
domestic capacity to comply. A ‘level playing field’ (one set of rules
for everyone) only becomes fair when all of the players can equally
play the game. WTO members at the Doha meetings affirmed the
need for different rules for poorer nations when they declared that
the WTO should review “all Special and Differential
provisions...with a view to strengthening them..." (WTO 2001a;
emphasis added). But negotiations at the WTO to do just this have
failed to produce any tangible results because many of the wealthier
WTO member-nations, including Canada, object to this necessary
double standard.
Wealthier member-nations of the WTO need to accept developing
countries’ requests for stronger S&D exceptions even if these may
have negative economic impacts for wealthier member-nations in the
short term. Developing countries should be able to use such excep
tions for purposes of health and human development (in particular,
to fulfill their obligations under the ‘right to health’), and for
domestic economic development. Their right to do so should be a
core, non-negotiable principle of the WTO, and should be based not
on a given time period (as is the present case), but on when they
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
attain a certain level of economic development (as has been urged
by many UN agencies, developing countries, international develop
ment organizations and the European Union).
Reverse the Burden of Proof
The burden of proof in health and environmental protection
disputes argued under the exceptions in GATT XX(b) and the
Sanitary and Phytosanitary Agreement should be reversed.
Countries claiming that another nation’s domestic standards are
unnecessarily trade restrictive need to prove that they were not
imposed for health reasons, and that changing the standard would
not create a health risk.
Fines, Not Sanctions
The WTO has the option to levy fines instead of trade sanctions, but
rarely does. Fines, especially if tied to a country’s Gross Domestic
Product, would create a much fairer penalty system. Part of the
fines could even go to global funds for health, education and social
development, allowing the dozens of countries now lagging behind
in reaching the Millennium Development Goals for infant and child
health, maternal health, gender empowerment and universal educa
tion to start catching up. 7
Human Rights Oversight
Finally, existing agreements must continually be assessed for their
impacts on internationally-agreed human rights, human develop
ment, health and environmental sustainability goals, with changes
made when WTO agreements conflict in any way with their accom
plishment. The WTO as an institution should be judged for how it
contributes to accomplishing these goals, rather than on the degree
to which it succeeds in trade and investment liberalization.
p8
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
Conclusion
The above suggestions focus on reforms at the WTO, an organiza
tion that is only nominally democratic (one country, one vote). The
economic clout of wealthier nations, and the larger and much better
funded teams of negotiators they have at the WTO, means that most
of our global trade rules so far have disproportionately benefited
rich countries, often at the expense of poor ones.8 There are signs
this is changing, as developing countries increasingly organize
around their interests, often supported by evidence from indepen
dent UN agencies, researchers and development agencies, and by
activism from civil society groups around the world. This hasn’t yet
resulted in fairer trade rules, but it has ground WTO negotiations to
a near-halt.
Some activists urge the complete elimination of the WTO, and the
two other institutions - the World Bank and IMF - that are most
responsible for today’s global economic rules. Others call for their
reform, particularly for the WTO. At this juncture, reform may be
the best option, as simply eliminating the WTO will mean the return
to bilateral trade agreements (those between two countries) and, as
experience has shown, these invariably benefit the more powerful
nation. Currently, the US, in its trade negotiations with individual
developing nations, demands that they give up some of their rights
under WTO agreements, including their right to avoid patent legis
lation under existing TRIPS provisions. The WTO at least allows
developing countries to unite against the self-interests of wealthier
.countries.
For the moment, WTO reform is a necessary but insufficient global
reform. Whether the United Nations and its various agencies can
regroup after the assault on its credibility by the US/UK invasion of
Iraq is a hotly debated question. But we desperately need effective
multilateral institutions that are democratic, transparent, equitable
and guided by goals of health and human development, including
commitments to the global redistribution of wealth and power.
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
We live in perhaps the most important historical moment of our
species. Our planet is dying amidst excessive affluence and poverty.
Once far-away conflicts and diseases imperil global health and secu
rity. Thirty years ago social justice activists around the world rallied
to the idea of a ‘global village’. But what dominates today is a ‘global
market’. The challenge we face is how to re-regulate economic prac
tices that governments have allowed to slip beyond their own
domestic control. We know the global policy options that will work
to promote health. Just as we know that the new rules must be
shaped to the differing needs of rich and poor countries, and subor
dinated to health, human rights and environmental objectives. The .
problem we must solve is how to create a system of global gover- ’
nance for our common good. Our health depends on it.
[20
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health ■
EndNotes
1
The $! and $2 a day figures refer to the average income earned by indi
viduals in poorer countries. The calculations are made by the World Bank,
and have been criticized for faulty assumptions that substantially underesti
mate global poverty rates. Nonetheless, they are still useful benchmarks for
comparison over time.
2
Economic growth is important to improving peoples’ health but, in itself,
is insufficient. First, there is little gain in average life expectancy once per
capita income approaches US $5,000 (Wilkinson, 1986; World Bank, 1993).
Second, much depends on how the wealth of economic growth is shared or
• invested. There are high growth/low health countries (Brazil) and low
growth/high health countries (Sri Lanka, the Indian State of Kerala, Cuba).
Many of the low growth/high health countries have policies supporting
social transfers to meet basic needs, universal education, equitable access to
public health and primary health care, and adequate caloric intake (Werner
and Sanders, 1997) - pro-poor policies that are now being eroded by trade
liberalization.
3
The US Trade Representative, Robert Zoellick, subsequently proposed
global reductions in such subsidies, including those in the US (BRIDGES
Weekly Trade News Digest 6(38) 7 November 2002). This is a common ploy
by wealthier countries in the WTO. Before agreeing to reduce trade
distorting tariffs or subsidies in sectors important to their own economies,
they first dramatically raise them.
4
Some trade agreements may even violate the ‘right to health’ guaranteed
under the Universal Declaration of Human Rights and the International
Covenant on Economic, Social and Cultural Rights, to which Canada is a
‘State party.’ In 2002 the UN Commission on Human Rights created the
position of a Special Rapporteur to recommend measures to promote and
I protect this right. In his first report (Hunt, 2003) the Rapporteur noted
that “States are obliged...to ensure that no international agreement or
policy adversely impacts upon the right to health, and that their representa
tives in international organizations take due account of the right to health”
(28), specifically citing the GATS and TRIPS Agreements as potentially
violating this right. Over 100 countries recognize a right to health in some
form in their constitution, and all but a few countries have ratified human
rights conventions that include the right to health (Blouin, Foster and
Labonte, 2002). The exact standing of the right to health in Canada is not
as clear as it is for countries where this right has been written into their
constitutions.
21 I
■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
5
The EU still does not allow hormone-treated beef into its countries, and
is paying millions of dollars each year to the complaining countries in
compensating trade sanctions.
6
Article XX(b) of GATT (the WTO’s General Agreement on Tariffs and
Trade) permits exceptions to WTO rules “necessary to protect human,
animal or plant life or health.”
7
A related idea, though outside the WTO ambit, is to create a 'Tobin Tax’
on currency exchange. Such a tax, named after the Nobel economist who
first proposed the idea, would impose a small tax each time foreign curren
cies were exchanged. This will dampen tremendously damaging specula
tion and, based on 1995 data, would raise about US $150 billion annually.
Such a tax could be split three ways, with a third going to each national
government whose currencies were being traded, and the remainder to an
international development fund.
8
A recent and important book, based on interviews with WTO staff and
delegates, shows the many ways in which an ostensibly democratic system
is subverted to ensure that the ‘agreements’ that are reached are those the
major powers - primarily the US and the European Union - want, irrespec
tive of the views or interests of most developing countries, who form the
great majority of the membership (Jawara and Kwa, 2003). The problems
it identifies suggest precisely how the WTO might be reformed to be more
democratic in fact, and not just in principle.
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health J
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Class and Health: Research and Longitudinal Data. London: Tavistock.
World Bank. 1993. World Development Report 1993: Investing in
Health. New York: Oxford University Press.
^^World Bank. 2000. 2000 World Development Indicators. Washington:
World Bank.
World Bank 2002. 2002 World Development Indicators. Washington:
World Bank.
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Sustainable Development: Five Years After the Earth Summit. Geneva:
WHO.
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■ DYING FOR TRADE: Why Globalization Can Be Bad for Our Health
World Health Organization. 1997b. World Health Report 1997:
Conquering Suffering, Enriching Humanity. Geneva: WHO.
World Trade Organization. 2000. European communities - Measures
affecting asbestos and asbestos containing products: Report of the Panel,
WT/DS/135/R. http://www.wto.org (accessed May 27, 2003).
World Trade Organization. 2001a. Ministerial Declaration,
WT/MIN(01)/DEC/l. Geneva: Author, November 20;
http://www.wto.int/english/thewto_e/minist_e/min01_e/mindecl_e.
htm (accessed May 27, 2003).
World Trade Organization. 2001b. Declaration on the TRIPs
Agreement and Public Health, WT/MIN(01 )/DEC/2. Geneva:
Author, November 20; http://www.wto.org/english/
thewto_e/minist_e/min01_e/mindecl_trips_e.htm (accessed
September 18, 2002).
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the Doha Declaration on the TRIPS Agreement and Public Health,
Note from the Chairman, Council for TRIPS, WTO; JOB (02)217.
Geneva: Author, December 16.
Zarrilli, S. 2002a. The case of Brazil, pp. 143-155 in C. Vieira, & N.
Drager, eds., Trade in health services: global, regional and country
perspectives. Washington, DC: Pan-American Health Organization;
http://www.paho.org/English/HDP/HDD/19Zarr.pdf
(accessed May 27, 2003).
Zarrilli, S. 2002b. Identifying a trade-negotiating agenda, pp. 71-81
in C. Vieira & N. Drager, eds., Trade in health services: global, regional
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Organization; http://www.paho.org/English/HDP/HDD/! lZarr.pdf
(accessed May 27, 2003).
DYING FOR TRADE: Why Globalization Can Be Bad for Our Health ■
Ronald Labonte, Ph.D., is Director of Saskatchewan Population
Health and Evaluation Research Unit (SPHERU), where he is leading
development of a multi-year research program on the health
impacts of globalization. He is a Professor in the Department of
Community Health and Epidemiology at the University of
Saskatchewan.
Some of his recent global health publications include: Fatal
Indifference: The G8, Africa and Global Health (with Schrecker, T.,
Sanders, D. and Meeus, W., 2003, University of Cape Town Press/Zed
Books); Setting Global Health Research Priorities (with Spiegel J.,
British Medical Journal, 2003); and International Governance and
World Trade Organization Reform (Critical Public Health, 2002).
He consults to the World Health Organization on globalization and
health, is a Board member of the Canadian Society for International
Health, a member of the executive of the recently formed Canadian
Coalition for Global Health Research, and a research associate with
the Canadian Centre for Policy Alternatives. He was also one of the
authors on the CCPA’s research paper on globalization, trade, and
health care undertaken for the Romanow Commission (2002).
■^1
G c- M •
GLOBALIZATION,
WORKPLACE AND HEALTH
Gerd Albracht
The 6th Global Conference on Health Promotion
Bangkok, Thailand, 7-11 August 2005
OUTLINE:
1.
Introduction.................................. ..................... .................................................................................... 3
2.
Safety and Health as a Basic Human Right: Legal Framework ........................................................... 4
Effects of Globalization on the Workplace............................................................................................. 7
3.
3
1.
External Context......................................................................................................................... 7
3.2.
Organizational Context................................................................................. ................................ 7
3.3.
Work Context............................................................................................................................... 10
Effects of Globalization on Forms of Work.......................................................................................... 10
4
4.1.
Safety and Health in Export Processing Zones......................................................................... 11
4.2.
Safety and Health of Migrant Workers....................................................................................... 11
Holistic Approaches for OSH and WHP............................................................. .................................. 12
5.
1.
5
Public Private Partnerships..................................................................................................... 12
5.2.
The ILO-GTZ-Volkswagen Project................................................................................. ............ 13
5.3.
Corporate Social Responsibility................................................................................................. 16
5.4.
The 3M Business Conduct Manual. ........................................................................................... 17
6.
Conclusion............................................................................................................................................ 20
7.
Literature................................................................................................................................................ 21
2
1.
Introduction
World trade has risen rapidly over the past two decades (Metzler 2004). The production of information,
knowledge, and technology increased vastly, so that the global gross domestic product at market
exchange rates is now USD 36892.9 billion (IMF 2005), implying the average person produces about USD
5675 annually. Nevertheless, not all are benefiting from this change. Global statistics show that
globalization under liberalized markets has mainly benefited the strong industrialized economies and
marginalized the weak. The average gross national product per capita, for example, varies by a factor of
about 12 between high- and low-income countries, and between 1960 and 1990 the poorest countries’
share of world trade fell from 4% to 1%. Further, investment flows have concentrated in only few countries
instead of benefiting the broad majority. Poor countries have been marginalized from investments and
markets and have not developed the capacity or exposure to engage in investment or trade. Instead, they
compete against each other for a small share of the market, which drives down the returns to trade
through economic and labour-market concessions. Increasing debt burdens can then consume a
mounting share of scarce domestic resources, further reducing the possibility of development. Not
surprisingly, income has declined for a quarter of the world's people, many of them in sub-Saharan Africa
and even within regions and countries there are widening disparities in wealth and economic opportunity.
In southern Africa, for example, globalization has produced mixed employment outcomes and the highest-
paid 20% of the population controls 10-20 times the income of the lowest-paid 20% (Loewenson 2001).
It is evident that globalization has contributed to the spread of human rights and the development of equity
in employment law; wider employment in nontraditional spheres of employment has brought more people
into the workforce. New information technology, and chemical, biotechnological, and pharmaceutical
production processes have also widened industry options for low-waste, low-energy, and recycling
strategies, which has generated new types of work organization and a shift from "blue-collar” to “white
collar" employment. However, for the large majority of workers in the less-industrialized countries,
liberalized trade has been accompanied by transfer of obsolete and hazardous technologies, chemicals,
processes and waste, including asbestos and pesticides which are no longer produced or used in many
industrialized countries. Globalization has also been associated with an increase in assembly line, low
quality jobs, with minimal options for advancement, and a growth of insecure, casual employment in a
small-scale informal sector. The International Labour Organisation (ILO 2005) estimates that the number
of people unemployed or underemployed in the world today exceeds 800 million, or nearly one third of the
labour force. Globalization has also freed capital from many of its historic and nowadays obsolete
boundaries: National workplace standards, collective bargaining as well as supervisory state agencies and
courts, instruments that became an indicator for development, an institution to secure and humanize
wqrking conditions. Hence, the economic benefits and social costs of globalization are not evenly
distributed. A logical outcome of these facts is that people in uncompetitive enterprises are adversely
affected. A weaker role of the state has led to cuts in government expenditures, which resemble a vital
3
element for the poor in terms of health systems, education, social safety nets, agricultural extension
services and poverty reduction.
Occupational safety and health (OSH) as well as Work health promotion (WHP) are more than
newsworthy topics in this context Due to the ongoing movement of capital to regions and countries with
low standards in OSH and WHP, these vital issues for workers’ health and safety need strong advocates.
Manufacturers in high-income countries have increasingly shifted their operation and production to low
and middle-income countries where workplace health and safety conditions and standards are
comparatively lower. Furthermore, production and many hazardous procedures are being transfered from
North to South causing an important impact on the nature and type of occupational exposures, as well as
on the labour force. The current process of globalization especially influences women's health at work.
The effects of globalization are considered to contribute to the high numbers of workplace-related fatalities
and accidents every year. The ILO found that a total worldwide amount of about 6000 fatalities is being
reported from workplaces every day. This implies that work kills more people than wars. Every 15 seconds
a human dies because of an occupational accident or disease. Work-related fatal accidents and diseases
add up to 2,2 million cases annually. There have been 270 million occupational accidents and 160 million
work-related diseases reported in 2004. Taking into account that the global gross domestic product (GDP)
reached about 30.000 billion USD in 2004, the loss due to occupational accidents and diseases adds up
to an annual 4% of the global GDP, which underlines the economic importance of OSH and WHP (ILO
2005).
The multidimensional framework according to Landsbergis (2003) and being extended in this paper
provides a good understanding of the complex issues related to globalization and its impact on the
workplace and brings up comprehensive examples how stakeholders can tackle present and the future
challenges in order to provide and ensure decent work for all.
2.
Safety and Health as a Basic Human Right: Legal Framework
Recent developments show that the global distribution of capital follows its idiosyncratic characteristic to
detect and exploit the most economical environment available to produce goods and services for the
global marketplace. Cost of capital is lower in places where workers health is a secondary issue and
costly occupational and safety regulations are omitted. Many critics argued that the global distribution of
work and capital, according to the logic of the economic goal of efficient production would lead to a global
"Race to the Bottom" in labour standards (Sight / Zammit 2004).
These trends led to an international consensus to find global versions of national regulative institutions by
establishing universal minimum standards of work, international inspectorates and courts to monitor and
enforce them. A pivotal effort in the field has been taken by the introduction of the ILO's Core Labour
4
Standards, which mark the furthest reaching international agreement in securing Decent Work as a basic
human right (see table 1). Standards, risk control, and compensation systems are outcomes of both
scientific evidence and workers' struggle The systems thus vary across countries and institutions such as
ILO have played a prominent role in promoting policy convergence. For example, ILO conventions have
set norms for safe work and for managing occupational health and safety, including ILO Conventions 155
(tripartite occupational health systems, rights, and responsibilities), 161 (occupational health services),
170 (chemical safety), and 174 (prevention of major industrial accidents). The ILO Tripartite declaration of
principles concerning multinational enterprises and social policy requires common standards across all
branches of multinational enterprises, and the Code of practice on safety, health and working conditions in
the transfer of technology to developing countries requires technology exporting states to inform importing
states about hazardous chemicals or technologies (Singh / Zammit 2004).
Table 1: ILO Core Conventions
Year
Convention
Forced Labour
Freedom of Association
and Protection of
the Right to Organize
1930
1948
No. 29
No. 87
Number
of Countries
Ratifying
168
144
Right to Organize and
Collective Bargaining
Equal Remuneration
Abolition of
Forced Labour
Discrimination
Convention
(Employment and
Occupation)
Minimum Age
Worst Forms
of Child Labour
1949
No. 98
154
1951
1957
No. 100
No 105
162
164
1958
No. 111
162
1973
1999
No. 138
No. 182
140
156
Source: ILOLEX2005
The core labour standards are those embodied in the various ILO Conventions (see Table 1). Freedom of
association and collective bargaining (Nos. 87 and 98), freedom from forced labour and discrimination
(Nos. 29, 105, 111) and abolition of child labour (No. 138, subsequently amplified by the Convention
Concerning the Elimination of the Worst Forms of Child Labour, Convention No. 182), are regarded as the
basic principles of the ILO. At the 1998 International Labour Conference, the Member States unanimously
adopted the Declaration of Fundamental Principles and Rights at Work, embodying the eight core
conventions in Table 1. By doing so, the nations of the world accepted the obligation to implement the
core conventions by virtue of their membership of the ILO, whether or not they had ratified the conventions
themselves (Singh / Zammit 2000).
5
Convention 81 (1947; Ratified by 134 Countries) on Labour Inspection was officially declared to be one of
the fundamental Conventions of the ILO, which significantly assists in implementing the core labour
standards of the Organization. The objective of Convention No. 81 is the establishment of a system of
labour inspection responsible for securing the enforcement and bringing to the notice of the competent
authority any possible loopholes in existing legal provisions relating to conditions of work and the
protection of workers in industrial workplaces, from which mining and transport enterprises may, however,
be excluded. Convention No. 129 proposes the establishment of a system of labour inspection for the
agricultural industry in general. The Conventions lay down the main rules governing the setting up,
organization, means, powers and obligations, functions and competence of the labour inspectorate as an
institution responsible for ensuring respect for the protection of workers in the exercise of their duties, and
for promoting legislation adapted to the changing needs of the world of work (ILO/SafeWork 2005).
The Conventions and Recommendations forming the legal framework on labour standards are an
essential pillar for promoting and ensuring safety and health at the workplace. Nevertheless, globalization
requires increasingly creative and holistic approaches, taking into account the changes in the world of
work. The prevention of occupational accidents and diseases, the promotion of employees health,
workplace security and the investment in a preventative culture will become competitive advantages which
will allow companies and countries to compete in a globalized world. As one important element in
enforcing compliance with the above mentioned legislative subjects as well as promoting a heath and
safety culture at the workplace, labour inspectors play a vital role in making decent work a reality. In a
holistic approach Work Health Promotion (WHP) and Occupational Safety and Health (OSH) have to work
hand in hand. After taking a closer look at the impacts of globalization on the workplace and worker’s
health in chapter 3 and 4, best practices of Corporate Social Responsibility (CRS) and ways of developing
sustainable strategies will be pointed out in order to protect and enhance the health of workers in the
worldwide economy. The pivotal role that labour inspection plays in a preventative approach for better
health and the reduction of diseases and accidents at the workplace will be illustrated and practical
solutions for better governance will be worked out (Singh / Zammit 2004).
6
3.
Effects of Globalization on the Workplace
Direct effects of globalization on the actual workplace can be illustrated in a three-dimensional model, in
which the main variables consist of the external-, meta- and internal sphere. The influential factors for the
external sphere can be found in the external working context, the meta-sphere is the organizational
context and the internal sphere is resembled by the actual working context itself (Landsbergis 2003).
3.1.
External Context
Various factors and changes due to globalization come into play by analyzing the external working
context. The legal and political framework, demographic trends as well as technological innovations at all
levels contribute to the external framework conditions of the world of work. Trade and regulatory policies
and aging societies heavily influence the workplace itself. Shifts in the distribution of high- and low-skilled
labour following manufacturing prices, labour costs and skilled workers mainly contribute to an increasing
North-South gradient. While working conditions improve in certain industrial countries, examples of slavery
and exploitation of labour are being reported from other parts of the world. The role of Labour Inspection in
this context is of vital interest, not only for safety and health issues concerning the workplace but also for
the enforcement and monitoring of fundamental human rights. Labour inspectors have the ability to freely
enter any workplace and therefore act at the inception of the value chain. There they can actively promote
labuor standards at the workplace and act as a vector for development by acting as an mediator between
employers and workers and by providing technical assistance, advice and expertise. This way labour
inspectors can mainstream decent work into all their functions, programmes and activities (ILO/SafeWork
2005).
3.2.
Organizational Context
Due to international sharing and spreading of management tools and practices, the organizational
globalization is evolving quickly. Restructuring, downsizing, quality and process management initiatives,
telecommuting and variable compensation systems have become common practices all over the world.
The effects on workers safety and health are ambiguous. Downsizing has been found to have a negative
effect on the safety of workers in the US (Richardson/Loomis 1997) Fatal accidents increased in the study
after companies downsized their workforce in the construction and manufacturing sector. Also in hospitals,
the accidents among nurses rose due to understaffing and stressful working climate. Overtime work and
lack of concentration is considered to be one of the main causes for severe accidents at the workplace. In
contrast to these figures, recent research has shown that there is a negative correlation between the
empowerment of the workforce, good relations between management and workers and the risks of severe
accidents. Factors like autonomy, efficacy, delegation of control and low grievance rates were found to be
sound indicators for the prevention of occupational accidents and injuries (Landsbergis 2003).
To make the organizational changes clear, the ILO found that working hours per person have been
declining in Japan and many parts of Europe during the 80s and 90s, while the trend is being reversed in
7
the last years. In contrast, there has been a constant increase in working hours in the US, nowadays
resembling one of the longest average working hours in the developed world (1820 hours per worker in
2002). A number of surveys conducted between 1977 and 1996 show dramatic increases in "time
constraints”, i.e. the time pressure and workload demands on workers. The increasing pressure on
workers and related stress exposure lead to the evolvement and spreading of occupational diseases and
disorders. Clearly a phenomenon, which is not entirely new to the world of work, but which has been
shifting form primarily physical to more and more psychosocial illnesses.
Even though today’s highly competitive business environment increasingly demands extended working
hours and overtime, its important to keep in mind that it is the human resources - the workers - that
frequently hold the key to the company’s competitive advantage (Messenger 2004).
8
Graphic 1
f I
If
I I
If
Annual hours worked per person, selected developed economies, 1990-2001
Source: ILO: Key Indicators of the Labour Market 2005
9
3.3.
Work Context
Job climate as well as job culture are considered to undergo massive changes in the context of a
globalizing world of work. Social relations at work and worker's role in the organizational context are
considered to be important indicators for the well-being and psychological health of the workforce.
Increasing demands on workers' quantity and quality of labor and less time to compensate their stress
levels in terms of free time is causing job strain. Job strain is defined as the combination of high job
demands and low job control. These issues are considered to be an important risk factor for the
evolvement of stress related diseases, such as hypertension and the cardiovascular disease.
The following graphic illustrates the influential factors on worker’s health in a three-dimensional model.
The three different contexts and especially the changes undergoing in these spheres have a dramatic
influence on the well-being of the worker in physical as well as psychosocial terms. This illustration clearly
focuses on the direct links to the workplace and leaves further external issues such as social and family
background apart. These issues would be subject for further research.
Picture 1: Three-dimensional Model on the Effects of Globalization on Worker’s Health
2. Organizational
Context
•Restructuring
-downsizing
-quality and process management initiatives
■telecommuting and variable compensation
systems
Affecting:
Worker’s Health
1. External
Context
-legal and political
framework
■demographic trends
■technological
innovations
3. Work
Context
•Job climate as weB as job culture
-increasing demands
-Less time
•Job strain
(Source: Landsbergis, 2003, modified)
4.
Effects of Globalization on Forms of Work
It is an acknowledged fact, that workers health and safety is exposed to external-, organizational- and
work-related factors, which are certainly undergoing constant changes, not only due to globalization.
Although the issues discussed above seem to refer mainly to the industrialized world, they are present all
10
around the globe. Globalization not only implies changes in the workplace itself, but also brings along
entirely new forms of work and contributes to the expansion of existing working models. The transfer of
low skilled manufacturing and processing jobs to less developed countries with generally lower standards
of work lead to the formation of export processing zones, informal sectors and the need for workers to
travel over long distances. Migrant workers, people who are the prototype of the on-demand workforce,
have become one of the most prominent features of globalization (ILO/SafeWork 2005).
4.1.
Safety and Health in Export Processing Zones
Examples of occupational health under liberalized tax and trade regimes can be seen in export processing
zones (EPZs). EPZs have been associated with high levels of machine-related accidents, dusts, noise,
poor ventilation, and exposure to toxic chemicals. Job stress levels are also high, adding further risk. It
has been reported that accidents, stress, and intense exposure to common hazards arise from unrealistic
production quotas, productivity incentives and inadequate controls on overtime. These factors create
additional pressure to highly stressful work, resulting in cardiovascular and psychological disorders. With
young women, the stress in EPZs can affect reproductive health, leading to miscarriage, problems with
pregnancies, and poor fetal health. Some EPZ companies were even reported to offer prizes to women
undergoing sterilization, to avoid losing time from maternity leave.
In the dormitory-style hostels of EPZs hygienic conditions have been described to commonly be in poor
state. Also sexually transmitted infections including HIV/AIDS, for example, are a prevalent phenomenon.
These side effects are usually not classified as occupational, but are certainly work-related
The ILO recently introduced a handbook for Labour and Factory Inspectors to deal with the issue of
HIV/AIDS in their work. In particular, it will help inspectors apply the ILO Code of Practice on HIV/AIDS
and the world of work, which was adopted in June 2001. The Code provides guidance for governments,
employers and workers, as well as other stakeholders, in formulating and implementing national action
plans and workplace policies and programmes to combat HIV/AIDS. To this end the Guidelines aim to
make it clear why HIV/AIDS is also a labour issue and a development challenge to discuss the ways it
concerns labour/factory inspectors. Further they aim to help inspectors understand and apply the ILO
Code of Practice on HIV/AIDS and the world of work to examine the links between HIV/AIDS and the
principles and practice of labour inspection, with particular reference to occupational safety and health to
develop practical tools for use during inspection and help inspectors integrate HIV/AIDS into their future
activities (ILO/SafeWork 2005).
4.2.
Safety and Health of Migrant Workers
Production systems across the south have long used migrant workers, but increased trade and financial
flows have added new waves of migrants, including informal sector traders. Migrant workers may be found
in various industries, notably construction, agriculture and manufacturing (in "sweatshops") but in other
11
sectors of employment as well. They are often exposed to poorer working conditions and may be further
disadvantaged by a limited knowledge of the language in their host country and a lack of understanding of
their legal rights. This poses a number of cross-boundary problems when trying to locate migrant workers
who were exposed to severe shortcomings in working conditions at former employers. Studies in
Botswana and South Africa, for example, signal the potential size of the problem, in the thousands of
undetected or unreported cases of occupational lung diseases in former mineworkers in the rural areas of
southern Africa.
There are several international Conventions and other instruments on migration and migrant workers.
While it is for Governments to ratify such Conventions, labour inspectors have a key role to play in
promoting compliance with national standards for migrant workers, monitoring conditions of work and
enabling migrant workers to lodge complaints and seek remedy without intimidation, in 2004, the
International Labour Conference agreed to a Multilateral Framework for Migrant Workers in a Global
Economy. Among other things this promotes the strengthening of labour inspection as a means by which
national standards on migrant workers can be effectively applied. Therefore the activities of labour
inspectors in the field of migrant work have the potential to fill a crucial gap in the reporting line of national
authorities, to identify fundamental drawbacks at their roots and to ensure social justice. Further, labour
inspectors can play a vital role not only at the end of the trafficking cycle, when a migrant is already in the
position of a victim, but also at the beginning of the trafficking cycle, i.e. the recruitment stage. Monitoring
and inspecting can also be extended to recruiters and thus be used during the prevention phase.
Recruiters fall under the term agency as defined by the ILO Private Employment Agencies Convention No.
181, 1997 (ILO/SafeWork 2005).
5.
Holistic Approaches for OSH and WHP
The effects and consequences of globalization on the workplace face local authorities as well as policy
makers with new challenges, which demand further measures than traditional, unilateral approaches,
focusing only certain elements of the socio-economic working context. Globalization requires increasingly
integrative and holistic approaches, taking into account the changes in the world of work and the advent of
new risks and opportunities merging the traditional technical and medical with the social, psychological,
economical and legal areas. To protect and enhance the health of people in the workplace in the
worldwide economy, practical strategies have to be worked out to make Decent Work become reality. A
main pillar of the mutual efforts is based upon the understanding that a preventative culture at the
workplace has to be developed in order to promote a sustainable decrease of occupational accidents and
diseases.
5.1. Public Private Partnerships
The ILO and the WHO participate in a number of global public-private partnerships (PPP). These
collaborative relationships transcend national boundaries and bring together at least two parties, a
12
corporation (or industry association) and an intergovernmental organization, in order to achieve a goal on
the basis of a mutually agreed and explicitly defined division of labour. The proliferation of public-private
partnerships is rapidly reconfiguring the international safety and health landscape. There are various
factors, which have led to the convergence of public and private actors (Buse I Walt 2000). Generic
factors such as globalization and factors specific to the safety and health sector, as well as market failure
in product development for special diseases and'missing commitments to higher safety standards, are
brought forward by researchers This relatively new trend in global cooperation is demonstrating
significant possibilities for tackling problems that formerly seemed intractable, particularly those requiring
increased research and development (R&D) on drugs and vaccines for diseases disproportionately
affecting the poor or modern safety as well as health regulations where investments have to be made
before measurable financial ease is being produced. Partnerships with the private sector have also
demonstrated an ability to advance public messages, serving as positive examples to demonstrate that
economic benefits can be reached by implementing sustainable practices, which promote a modern and
adequate health and safety culture. Industry incentives for the development of safer and healthier
products are being generated. Further companies feel the need to follow the advancing competitor in the
field of profitable safety and health strategies. Through collaboration, the United Nations (UN) have the
opportunity to gain access to resources and expertise so as to further its mission, while the commercial
sector may, through an improved corporate image, among other things, attract new investors and
establish new markets. Many benefits, therefore, including the immediate health-related ones, favor the
continued development of public-private collaboration for safety and health.
5.2.
The ILO-GTZ-Volkswagen Project
In 2004 the ILO started a PPP project with the Gesellschaft fur technische Zusammenarbeit (GTZ:
German technical cooperation agency) and Volkswagen AG, which has agreed upon a Declaration on
Social Rights and Industrial Relationships including the affirmation to assure the principles of core labour
standards within the company and even beyond, by setting standards for their suppliers. The overall
objective of the project was to establish and implement a national SafeWork action programme in 3
countries based on ILO standards, focusing on occupational health and safety and a pilot implementation
of a prevention culture at enterprise level in each partner country.
The project strongly emphasizes on the new linkages and the possible knowledge exchange that can be
established by including a multi-national company in the project. VW has a strong interest to improve the
social performance of their suppliers, as it does not only result in more job-satisfaction for the workers and
the suppliers enterprises, better quality of the products or higher economic performance, but it also
increases the overall corporate social responsibility (CSR) standards for Volkswagen. The project is
drawing on the experience of the BMZ/GTZ with Private-Public partnership arrangements in the field of
technical cooperation.
13
The project is based on the idea to implement social standards of Decent Work through establishing a
health and safety culture at both, national and enterprise level to prevent accidents to happen and new
poverty to arise ("good health is good business”). In June 2002, VW has defined a Codex for social rights
and industrial relations in a Social Charter, the first one in the automobile industry. The Federal German
Ministry for Economic Co-operation and Development strongly supports activities, which aim at
implementing ILO's Core Labour Standards. The strong'common interests of all project partners in the
field of social standards have born the idea of a joint OSH and CSR project.
The Global Compact, a UN initiative aiming at poverty alleviation and making globalization more stable
through enterprise commitment, is a new approach for sustainable development. Launched in 1999, it is
based on three major principles encompassing human rights, labour standards and environmental
sustainability. The Global Compact is challenging enterprises to pursue these principles. The project will
contribute to implement the global compact programme by providing a sustainable and lasting approach to
face the challenges of globalization at the workplace. Through its far-reaching impact, targeting upstream
business activities at the supplier level, it sets an example for corporate social responsibility beyond
company boarders.
At enterprise level, VW will provide guidance to their suppliers on how to improve the social performance
of the company. This will be done through enterprise audits or other forms of assessment. As a follow up
action of the audit, the supplier will have to implement the recommendations given and adjust their
standards to the relatively high VW OSH standards. The suppliers will have to designate a person
responsible for the follow up of the audit recommendations. This person could also become a first contact
person for labour inspectors while conducting inspections.
By establishing a health and safety prevention culture, the enormous economic losses due to accidents,
incidents, early retirement or sickness benefits can significantly decrease and these unspent budgetary
funds can easily be invested to increase the enterprises performances and to create new jobs, allowing
the poor to be able to escape the vicious circle of poverty in the long run. Policy makers, labour
inspectors, safety and experts, etc all play an important role in the prevention process and initiation of a
shift from short-term profits towards long-term investments in safety and health.
14
Reduction of
1 Implementation
of Prevention
Policies at
National and
Enterprise Level
2. Reduction of
economic losses due
to accidents and
incidents (hours lost)
3. Economic
Growth
Picture 2: The strategic outline for the ILO/GTZA/olkswagen-project (Source: ILO)
According to the national needs, a national OSH programme could be established or further developed.
This implies assistance in drafting national OSH strategies or labour inspection policies. A mini profile on
OSH could be introduced to better assess the current situation and find means and ways for improvement.
The national OSH programmes aim at promoting a health and safety culture, strengthening the national
OSH system and it also implies targeted action on specific subjects (e.g. high-risk sectors, HIV/A1DS;
SME's, etc.).
Establishing and implementing a health and safety prevention culture at national level requires the active
participation of the labour inspectorates. Labour Inspectors are the only state enforcement agents who
actually have access to the enterprises and who can bring the health and safety messages across. It is
therefore crucial to increase the labour inspectorates’ capacities in terms of organizational structure,
frequency and quality of inspections, knowledge on its advisory role, competency, etc. in a sustainable
approach. This shall be achieved through a range of proposed activities, such as policy analysis and
policy reform, the development of training modules, the training of national labour inspection trainers, the
setting up of a competency network and the development of international guidelines on supply chain
management.
15
Based on a training needs analysis, specific modules will be developed for training of labour inspectors.
The subjects are to be defined according to the national needs. Training could also be set up for the
responsible OSH experts at enterprise level. If training needs of the labour inspectors are in coincidence
with the needs of the VW suppliers joint training workshops could be organized.
The project also intends to set up an internet-based system that can provide the basic information on
potential accidents and health hazards in certain working environments This database could be accessed
by anyone who needs advise on occupational safety and health, including small and medium sized
enterprises. The project will bring on board the Internet technology and experts to set up such a system at
national level. It will be adapted to the national content and the system would need maintenance from a
dedicated and motivated national expert.
Through this project it has been practically made clear that OSH resembles a cornerstone for corporate
social responsibility (CRS) and promotes decent work through various channels. Through the integration
of suppliers and associated partners the programme is a far reaching vector to raise social and economic
capabilities of the countries and institutions participating. Not only the workplace itself, but also the
surrounding spheres, such as the well-being of workers' families and their social and economic
perspectives experience sustainable improvement. In the context of globalization, merging traditional
technical, social, psychological, economical and legal areas, workers’ health increasingly relies on strong
partnerships. Commitments by companies to follow a preventative path in order to increase the social and
economic capabilities in global competition, play a vital role in promoting and securing safety and health at
the workplace. Therefore this example can be seen as a prototype for further PPP-Projects, leading the
way to a comprehensive approach, integrating all major stakeholders and ensuring sustainable
development.
5.3.
Corporate Social Responsibility
In the modern commercial era, companies and their managers are subjected to well publicized pressure to
play an increasingly active role in society - so called "Corporate social responsibility". Corporate social
responsibility (CSR) has recently been the subject of increased academic attention. While social
responsibility has figured in commercial life over the centuries, in the modern era increasing pressure has
been placed on corporations to play a more explicit role in the welfare of society.
Over the past decade the concept of sustainable development has expanded to include the simultaneous
consideration of economic growth, environmental protection, and social equity in business planning and
decision-making. Many multinational enterprises engage in corporate citizenship programs to promote
sustainable development. Corporate citizenship programs are often defined narrowly, however, as
philanthropy or external relationships with stakeholders to address social problems.
16
In the 1970s international organizations, such as the International Labour Organization, the Organization
for Economic Co-operation and Development and the United Nations already tried to introduce
international codes of conduct, which were rejected at that time. Fortunately the interest in such measures
has increased again in the course of the 1990s. These days, interest in codes of conduct is primarily the
result of actions by consumer groups and other non-governmental organizations, and by managers of
transnational corporations themselves. These actors'have started to think about social responsibility and
self-regulation in a more proactive fashion. Social and financial performances seem to be linked. More
recently, governments and international organizations have also become involved again.
A study published by Kolk; van Tulder and Welters in 1999 examines 132 codes of conduct drawn up by
four different actors: social interest groups, business support groups, international organizations and firms.
The contents of the codes and their capacity to address the regulatory void left by processes of
globalization is assessed. Complementary to the literature on codes of business ethics their article's
analytical framework centers on specificity and compliance mechanisms. The likelihood of compliance not
only depends on the contents of the code, but is also heavily influenced by the interaction of various
stakeholders in its formulation and implementation. The content analysis of a large number of codes
drawn up by the four different actors, supplemented by two case studies, improves understanding about
the dynamics and likely policy implications of codes of conduct. Voluntary transnational company (TNC)
codes are showing clear potential in addressing unstable socioeconomic relations provided other actors
do not step aside.
5.4.
The 3M Business Conduct Manual
Although 3M has business operations in more than 60 countries, the company has only one set of
Business Conduct Polices that apply globally. It sets a high standard of conduct for every employee. The
Business Conduct Manual helps define everyday ethical and lawful business conduct and is available to
employees electronically and in print.
All 3M employees, supervisors, managers and other leaders are responsible for understanding the legal
and policy requirements that apply to their jobs and for reporting any suspected violations of the law or
3M's Business Conduct Policies. Training is provided to help employees understand their responsibilities
and the resources available to them. Executives and managers also are accountable for creating and
promoting, by sound leadership and good example, a workplace environment in which compliance and
ethical business conduct are expected and encouraged. A number of policies and management systems
are in place to guide the company and its employees in continuous improvement in the areas of
environmental protection, social responsibility and economic progress (3M 2005a).
According to the company, the 3M Environmental, Health and Safety Management System is a key
element for sustainability. It builds on activities that are already occurring in facilities around the world.
Policies and management systems supporting a socially responsible workplace are described in the
17
"Business Conduct Manual" and "Ethics in Employment" sections of the report. Policies and management
systems supporting community involvement are described in the "Stakeholder Interaction" section of the
report.
Ethical behavior includes acting in a socially responsible way towards potential, current and former
employees. As an ethical and law-abiding company, 3M complies with government regulations around the
world concerning human rights, employees and employment laws and expects ethical behavior from
employees in accordance with their global Business Conduct Manual. The conduct goes beyond
obligation to include policies that help support a challenging, productive and enjoyable work culture (3M
2005b).
As part of the Business Conducts, the company implements security measures and practices crisis
preparedness. Further it is auditing against the ILO Core Labor Standards in which the company ensures
that its operations adhere to the ILO Core Labor Standards through self-audit checklists and annual ethics
audits. Managing Directors responsible for 3M's operations in countries outside of the United States
complete self-audit checklists each year to confirm compliance with the standards. In addition, in 2005 3M
is expanding its ethics audits to include the labor standards. These audits are conducted annually for
each of 3M's country subsidiaries.
Various Initiatives, such as the Corporate Safety and Health Policy, Global Safety and Health Plan, Global
Safety and Health Plan Self Assessment and Employee Health and Safety (EHS) Management System
work together to help maintain the safety and health of employees and provide a safe and healthy
workplace worldwide. The goal is to implement sustainable Health and Safety systems to bring about
continuous improvement towards zero incidents. The company invests in safety and health worldwide in a
number of ways, including providing EHS resources, safety and health training, personal protective
equipment, and capital investments to improve safety and health. The investment in personal protective
equipment, including items such as safety eyeglasses and safety shoes, amounted to $4.8 million in the
year 2002. Over the past five years, 3M has spent over $172.4 million in capital to improve safety and
health (3M 2005c).
The company reports, that it has been their experience that incorporating good ergonomics into the
manufacturing and administrative processes is effective in reducing the number and severity of
musculoskeletal disorders (MSDs). The ergonomic efforts not only benefit employees, but can precipitate
increased productivity and make good business sense. 3M has increasingly focused on identifying and
preventing illnesses and injuries related to ergonomic factors. Fifty-eight percent of recordable incidences
in the company now are related to ergonomics factors. The top two causes of injury are due to manual
material handling and repetitive motion.
In 2001, 3M rolled out an expanded ergonomics program consisting of a management system for hazard
awareness, assessment and implementation of ergonomic solutions. As we increase the effectiveness of
18
3M's ergonomic programs and employees are educated on the signs and symptoms of musculoskeletal
disorders, the seventy rate of ergonomics injuries has improved significantly.
The company recently introduced a new EHS Scorecard, as an important part of the EHS Management
System, which also tracks the safety and health progress at the facility, division/subsidiary and corporate
levels. In the EHS Scorecard, health and safety metrics cover all critical performance issues of their
operations For some of these, the company sets targets to drive safety and health improvements. The
following table shows 3M's progress on the safety and health front in terms of recordable and lost time
incidents and workers' compensation from the early 1999 through 2004. The Global Safety and Health
Plan, along with self-assessments, are driving continuous improvements in this area. All are part of the 3M
EHS Management system (3M 2005c).
Table 2: Annual Comparison of Safety and Health Data
3M U.S. Recordable
Incident Rate
U.S. Bureau of Labor
Statistics Recordable
Incident Rate for
Manufacturing
3M Worldwide
Recordable Incident
Rate
3M U.S. Lost Time
Incident Rate
U.S. Bureau of Labor
Statistics Lost Time
Incident Rate for
Manufacturing
3M Worldwide Lost
Time Incident Rate
Worldwide Fatalities
2002
2003
2004
5.16
4.27
3.56
3.35
9
8.1
7.2
6.8
N/A
2.83
3.11
3.12
2.74
2.35
1.70
0.8
1.06
1.14
1.04
.93
.92
2.2
2
1.8
1.7
1 6
N/A
0.86
o
0.81
0
0.57
1
1999
2000
2001
4.54
5.19
9.2
|
■
0.63
1
0.79
1
0.82
o
Source: 3M Public Homepage (3M 2005c)
19
6.
Conclusion
Fair rules for international trade, investment, finance and the movement of people, which take into account
their differing needs and capabilities, have to be agreed upon. This requires an intensified dialogue
process at all levels bringing the key actors together to work out ways of handling major global issues and
putting them into practice. Fair globalization also calls for more emphasis at national level, for improved
governance, an integrated economic and social agenda and policy coherence among global institutions.
After all for every individual worker globalization is a workplace issue. Along those lines, national policy
makers should make use of the available resources of Public Private Partnerships, Corporate Social
Responsibility Guidelines and labour inspectorates to strengthen the capacities of every individual
company, institution and at the bottom line the worker’s well being. These measures have been identified
as useful tools to promote and secure employees heath, workplace security and the investment in a
preventative culture. The paper makes clear, that a preventive approach for better health and the
reduction of accidents and diseases at the workplace must be linked to labour inspection services. They
have a pivotal role in promoting compliance with core labour standards, in giving advice and in providing
information on how those standards can be implemented in daily work. Labour inspectors are the
controlling authority for OSH and many work- related activities such as preventative measures. The effects
of globalization changed the role of labour inspectors who should also exercise the role as a facilitator, an
advisor and a net-worker. Strengthening labour and health inspection is crucial for ensuring a high
standard in the labour protection and health promotion, thus contributing to overall economic stability. A
number of recently conducted studies and publications point out the positive effects of combining
workplace health promotion and occupational safety and health to provide sound and sustainable
solutions and interventions for present issues and future challenges in the world of work.
20
7.
Literature
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World Health Organ. 2000;78(4);549-61
ILO, InFocus Programme on Safety and Health at the Workplace and the Environment (2005): World Day
for Safety and Health at Work 2005: A Background Paper,
http://www.ilo.org/public/enghsh/bureau/inf/download/sh_background pdf, Geneva.
ILO, Key Indicators of the Labour Market (2005), to be found at:
http7/www.ilo.org/public/english/employment/strat/kilm/trends.htm#figure%206c , accessed on July 28,
2005.
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http://ilolex.ilo.ch: 1567/english/newratframeE.htm.
ILO/SafeWork (2005): Convention 81 and 129; Brochure on Labour Inspection; International Labour
Office, Geneva.
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People: A Commentary, Journal of occupational and environemental medicine, Vol. 45, No. 1, New York.
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Responsibility: Can Transnational Corporations Regulate Themselves?, Transnational Corporations, Vol.
8,
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Messenger, J. (2004); Working Time and Workers' Preferences in Industrialized Countries - Finding the
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Singh, A.; Zammit, A. (2000): International Capital Flows: Identifying the Gender Dimensions; World
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and Workers Rights from Developmental and Solidaristic Perspectives; ESRC Centre for Bussiness
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Washington D.C.
3M (2005a): Governance & Systems; to be found under
http://solutions.3m.eom/wps/portal/lut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLN4g3NPIBSYGYx
qb6kWhCjhgivkEQId9gmlilO4YiP2OlkJ8JXFslVMQAbpujK0TI2DEIIeaOleZtARHytoSJGBp5l2z09cjPTdU
21
PSs2LDw3W99YP0C_IDYWBiHJHR0UAbeRigA!!/delta/base64xml/L0IJYVEvd05NQUFzQURzQUVBLzR
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22
Trade liberalisation and the diet and nutrition transition:
public health response
Geof Rayner
Corinna Hawkes
Tim Lang
Walden Bello
The 6th Global Conference on Health Promotion
Bangkok, Thailand, 7-11 August 2005
Abstract
The liberalisation of trade, including of agriculture and food, remains at the forefront of
debates about globalisation, not least because it is viewed as a model of progress economic growth through market liberalisation - that can help address poverty and deliver
public health improvement. In debates about trade, insufficient attention has been paid to its
implications for health and nutrition, and, in particular, dietary health. Yet the WHO's Global
Strategy for Diet, Physical Activity and Health (2004) provided a powerful warning that the
future health burden will be increasingly determined by dietary health in the form of dietrelated chronic diseases. This article thus examines the “diet and nutrition transition" in the
context of liberalising trade and commerce, with the objective of providing to the public health
and health promotion community an awareness of the importance of food trade in their efforts
to promote healthy diets worldwide. We first describe the evolution of trade agreements,
noting those particularly relevant to food trade. We then briefly review the association
between trade liberalisation and health and the changing global dietary and disease profile.
We then show how trade liberalisation is linked with the diet and nutrition transition through
the food supply chain from foreign direct investment and food cultural change, such as
supermarketisation and advertising. We propose three discernable scenarios for change,
presenting the case for public health professionals and advocates to become centrally
engaged national policy making in the food and agriculture arena.
Key words: Globalisation, trade, commerce, economic development, epidemiological
transition, diet, nutrition, food governance, public health.
2
Background
World Trade Policy, Agriculture and Food
The last half-century has witnessed the massive growth in international trade. The volume of
global merchandise trade has increased 17-fold, more than three times faster than the growth
in world economic output.12 Agricultural trade has grown around the same rate as world
economic output but accounts for less than ten percent of world merchandise exports. The
World Food Summit in 1996 made the case that international trade permits food consumption
in a country to exceed production and to iron out national and local fluctuations in supply, but
it was also noted that trade, through competition, might produce harmful effects, such as the
disruption of traditional food production systems or deleterious environmental consequences.
Since 1994, world trade policy has been managed by the World Trade Organisation (WTO), a
supranational body dedicated to liberalising (i.e. opening up) commercial interactions between
nations. Member States of the WTO negotiate trade deals in a series of "Rounds”, addressing
international trade issues such as protectionist mechanisms (tariff and non-tariff barriers),
subsidies, intellectual property, foreign investment, food safety and other matters once solely
the province of nation states or international trade groupings (Box 1). Given this breadth of
scope, trade policy should be understood not simply in terms of the movement of goods
across borders, but commerce in the broadest sense.
Until 1994, trade policy was subsumed by the loose trade 'club ' of member nations known as
the General Agreement on Tariffs and Trade (GATT). The final GATT Round, the Uruguay
Round (1987-1994), established the WTO, and for the first time brought agriculture and food
into the negotiations, leading to the Agreement on Agriculture (AoA).
As a result of the work in the GATT, the average tariff on non-agricultural goods fell from
around 40% in 1947 to 4.7% by the end of the Uruguay Round in 1993. In contrast the
average level of protection for agriculture, despite fluctuations, has risen in both percentage
and volume terms. Producer support in OECD countries was an estimated $US 279 billion in
20043 while total world trade in agriculture in 2003 was SUS 674 billion.45When it assumed
the responsibilities of GATT, agricultural liberalisation was high on the WTO agenda but it
made little headway. Such protectionism is thought to in part explain the decline of food
exports from developing countries from about 50% of total world exports in the early 1960s to
less than 7% by 2000. s
Addressing protectionism in agriculture thus remains high on the agenda of the current Doha
Round of WTO negotiations, which aims to create "substantial improvements in market
access".6 WTO negotiations on agriculture have, however, proved painfully difficult (the 1999
talks held in Seattle collapsed, as did the Cancun talks in 2003). So while agricultural trade
has unquestionably increased since the AoA, numerous barriers still exist and, arguably, far
greater agricultural trade liberalisation is yet to come.
Food is also affected by other trade agreements. The WTO Agreement on Technical Barriers
to Trade (TBT) applies to food quality standards and labelling (e.g. of nutrients), and the
Trade Related Intellectual Property Rights Agreement (TRIPS) to seed patents. The
Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) has been
notably important in food trade, applying to any trade-related measure taken to protect human
health from unsafe food. SPS recognises the standards set by another important trade-related
text: the Codex Alimentarius (the joint WHO/FAO international food code). Reflecting the
considerable emphasis placed on food safety in trade, SPS notifications to the WTO
1 Food and Agriculture Organisation of the United Nations, World agriculture: towards 2015/2030: An FAO perspective, Rome: Earthscan, 2003
2 Food and Agriculture Organisation of the United Nations, Paper No. 5 Food security and the WTO trade negotiations: key Issues raised by
the World Food Summit.
Agriculture, trade and food security: issues and options in the WTO negotiations from the perspective of
developing countries, Report and papers of an FAO Symposium held at Geneva on 23 - 24 September 1999, Rome, FAO, 2000
3 OECD, Agricultural Policies in OECD Countries: Monitoring and Evaluation, Paris, OECD, June 2005
4 WTO, International trade statistics,Table iv.3 Geneva. WTO 2004
5 Committee On Commodity Problems Sixty-Fifth Session Rome, Italy, 11-13 April 2005 Food Security In The Context Of Economic And Trade
Policy Reforms: Insights From Country Experiences. FAO 2002
6 Information on the Doha Development Agenda mandate can be found at http://www.wto.org/english/tratop_e/dda_e/dda_e.htm
3
increased from 196 in 1995 to 855 in 2003.7 Nutrition, in contrast, has received negligible
attention.
Trade policy is also set through "regional trade agreements", such as NAFTA (the North
American Free Trade Agreement between the US and Mexico), MERCOSUR (between
Brazil, Argentina, Uruguay and Paraguay), and the EU (the European Union is a free trade
zone). Such agreements are becoming critically important in the face of tensions at the WTO,
as are what are known as “bilateral agreements”, such as the recent US - Australia Free
Trade Agreement and the new Central American Free Trade Agreement (CAFTA), a series of
bilateral agreements between the US and each of the five Central American countries and the
Dominican Republic.
Box 1: Definitions of Trade Terms
Agreement on Agriculture (AoA): The AoA, part of the document founding the World Trade
Organisation, provides the rules governing international agricultural trade and, by extension,
production. It bans the use of border measures other than tariffs, and it puts tariffs on a
schedule of phased reduction.
Foreign Direct Investment (FDI): Foreign direct investment is investment of foreign assets
into domestic structures, equipment, and organisations
GATT: General Agreement on Tariffs and Trade, superseded by the WTO
GATS: The WTO's General Agreement on Trade in Services.
Multilateral, regional and bilateral trade agreements: Multilateral trade agreements
(MTAs) require that reductions in trade barriers should be applied on the same basis to all
WTO members. Under Regional or Bilateral trade agreements (RTAs, BTAs) reductions in
trade barriers apply only to parties to the agreement. They must be consistent with the WTO
rules governing such agreements, which require that parties to a regional trade agreement
must have established free trade on ‘substantially all' goods within the regional area within ten
years, and that the parties cannot raise their tariffs against countries outside the agreement.
Non-tariff barriers (NTBs): Non-tariff measures which pose barriers to trade, such as
quotas, import licensing systems, sanitary regulations, prohibitions, etc.
Quotas: Quantitative restrictions (commonly known as import quotas) are used to control the
number of foreign products that can enter the domestic market.
SPS: Agreement on the Application of Sanitary and Phytosanitary Measures (1995). Sanitary
and phytosanitary measures are those to protect human, animal and plant life and health, and
to help ensure that food is safe for consumption.
Tariffs: Customs duties on merchandise imports.
Technical Barriers to Trade (TBT): Measures that countries use to regulate markets, protect
their consumers, and preserve natural resources, but which can also discriminate against
imports in favour of domestic products.
Trade liberalisation: The reduction of tariff and non-tariff barriers to trade and other forms of
commercial interaction
Subsidy: There are two general types of subsidies: export and domestic. An export subsidy
is a benefit conferred on a firm by the government that is contingent on exports. A domestic
subsidy is a benefit not directly linked to exports.
WTO: The World Trade Organisation WTO) is “the only global international organisation
dealing with the rules of trade between nations. At its heart are the WTO agreements,
negotiated and signed by the bulk of the world's trading nations and ratified in their
parliaments. The goal is to help producers of goods and services, exporters, and importers
conduct their business."
7 Regmi A. Gehlhar, M, Wainio. J., Vollrath, T., Johnston, P. and Kathuria, N. Market Access for High-Value Food. Agricultural Economic Report
Number 840. Washington DC: USDA, 2005
4
Codex Alimentarius The joint FAO/WHO international food code, managed by the Codex
Alimentarius Commission (CAC)
Sources: Based on WTO Glossary
(http://www.wto orq/english/thewto e/qlossary e/qlossary e.htm) and Shaffer8__________
Trade policy and public health
Underlying trade agreements is the postulate that trade liberalisation and economic
globalisation - defined here as the trend of economic integration and interdependence of
countries - benefits all societies, especially poor ones. The idea is that increased trade
lowers prices for consumer goods (notably food, which makes up a relatively larger proportion
of the expenditures of poor people), economic openness boosts the incomes of agricultural
producers (who comprise large segments of the populations of low-income countries), and the
resulting economic growth increases the relative demand for skilled labour, in turn raising the
demand for education and public goods. The result is a virtuous cycle of economic growth
and social and health improvement. According to Lant and Summers, 40% of differential
mortality improvements between countries could be explained by differences in national
income growth; if the income of people in developing countries rose 1% as many as 33,000
infant and 53,000 child deaths would be averted annually.9 Others have suggested that
liberalising markets extends life expectancy; 10 even where inequality is increased, positive
benefits outweigh the negative ones. 1112
13
In other words, economic growth via trade
liberalisation is ‘good for health’. 1213
Advocates of trade liberalisation present a powerful economic, indeed, moral case. However
their evidence is disputed since predicted outcomes, including poverty reduction, have often
not been borne out in reality. Some suggest that insufficient liberalisation is to blame, others
being more concerned that trade rules inevitably favour the powerful.14 According to the
former chief economist at the World Bank, the new trade rules, the adjudication process on
the rules, and the required domestic disciplines, reflect the priorities and needs of developed
countries more than developing countries. 15 It has also been alleged that advocates of trade
liberalisation confuse mechanisms with outcomes. For example, the Food and Agriculture
Organisation (FAO) of the UN, says that market openness should not be viewed as a policy
tool to achieve growth but primarily as an economic outcome;16 consequently globalisation
“does not automatically benefit the poor”. 17 Removing protective tariff barriers may produce
benefits for some groups but may also reduce state expenditure on public goods, such as
education or health services, which benefit the poor most.18 Some have also raised concerns
about trade policies, cautioning that health may deteriorate if the new patterns of economic
activity are more dangerous, general working conditions deteriorate, or trade facilitates the
transfer of disease or unhealthy consumer goods and practices across borders.19 20 21
8 Shaffer ER, Waitzkin, H.: Brenner, J., Jasso-Aguilar. R Global trade and public health. American Journal of Public Health (2005) 95,1.23-34
9 Pritchett, Lant, and Lawrence H. Summers (1996), "Wealthier is Healthier." Journal of Human Resources 31 (4). 842-68.
10 Owen. Ann L and Wu, Stephen. "Is Trade Good for Your Health?" (November 2001). Hamilton College Working Paper No 01-09.
http://ssrn.com/abstract=291055
11 Martin Ravallion 2004. “Pro-poor growth: A primer * World Bank Policy Research Working Paper # 3242. March Washington. D.C.. World
Bank.
12 Dollar D. Kraay A. Growth is good for the poor. J Econ Growth 2002;7:195-225.
13 Dollar D. Is globalization good for your health? Bull WHO 2001;79:827-833
14 Oxfam. Rigged Rules and Double Standards. Trade. Globalization and the Fight Against Poverty. Oxfam. 2002
15 Stiglitz, Joseph E and Charion Andrews (2004): "A Development Round of Trade Negotiations?" - Report prepared for the Commonwealth
Secretariat by the Initiative Policy Dialogue (IPD) in collaboration with the IPD Task Force on Trade Policy.
http://www0.gsb.columbia.edu/ipd/pub/CompleteCommonwealthRepor111_3.pdf
16 Food and Agriculture Organisation of the United Nations . World agriculture: towards 2015/2030: An FAO perspective, Rome: Earthscan,
2003
17 Food and Agriculture Organisation of the United Nations, The State of Food and Agriculture 2000, Rome, 2000
18 Tim Conway, Trade liberalisation and poverty reduction, London' Overseas Development Institute. October 2004
19 Owen, Ann L. and Wu, Stephen, "Is Trade Good for Your Health?" (November 2001). Hamilton College Working Paper No.
01 -09. http://ssrn com/abstract=291055
20 Shaffer ER, Waitzkin, H , Brenner, J., Jasso-Aguilar, R. Global trade and public health American Journal of Public Health
(2005)95,1.23-34
5
Amartya Sen has noted that the debate on globalisation has often taken the form of an
empirical dispute about whether the poor who participate in trade and exchange are getting
richer or poorer. The more fundamental question, he suggests, turns on the distribution of the
benefits of globalisation which in turn raises broader issues about the adequacy of national
and global institutional arrangements that shape global economic and social relations.21
22 A
similar point can be made more broadly in terms of global governance for public health and
more specifically with regard to food. In terms of the likely impact of trade policy as a driver of
dietary change, fundamental questions may need to be asked about how and in what way the
nation state and civil society can formulate effective systems of 'food governance’ both to
minimise the deleterious health consequences of expanding trade and commerce while
garnering its advantages. This question is considered in the final section.
To analyse the impact of trade policy on health, the WHO and WTO prepared a joint report on
the public health implications of trade in 2002.23 It noted that trade agreements do take some
account of health, permitting national trade-restrictive measures that protect human health but only those that are the least trade restrictive relative to any other measure. The report
concluded “there is common ground between health and trade” (p.137), but in the face of past
disputes between health and trade, it also argued for greater health and trade policy
‘coherence’. While the report covered matters as diverse as intellectual property rights, food
insecurity, infectious disease control and food safety, it failed to include an increasingly
important class of health threats, diet-related chronic diseases (DR-CDs).
Diet-related chronic diseases and the nutrition transition
Until recently public health concerns around food largely focused on undernutrition and food
safety. These remain important concerns. For example, while undernutrition decreased from
28% of the global population in the 1980s to 17% in 1999-2001, the rate of decline has since
reduced. The FAO’s recent estimates are that more than 800 million people in the developing
countries suffer from chronic undernutrition. However, it has also observed that the picture is
now considerably affected by new trends of globalisation, urbanisation, and changing food
systems.24 A fuller picture, therefore, is thus one of an increasing dual burden of malnutrition
and disease.
The burden of DR-NDs, such as obesity, diabetes, cardiovascular diseases, cancer, dental
diseases and osteoporosis, is rising fast worldwide.25 According to the WHO, chronic
(noncommunicable) diseases account for 60% of the 56 million deaths globally, with
unhealthy diets being a major contributor to key risk factors (high blood pressure, high
cholesterol, low fruit and vegetable intake, overweight and obesity).26 Over one billion people
worldwide are now overweight or obese. In the US and the EU the resultant health costs are
massive 27; in developing countries, these diseases promise to overwhelm far less well
resourced healthcare systems.
This changing disease profile was first predicted by Omran’s theory of the Epidemiological
Transition. He proposed that as societies economically developed, chronic diseases
increasingly substituted for infectious diseases.28 From this, Popkin and associates have
more recently developed a theory of “nutrition transition”, incorporating diet, nutrition and
lifestyle determinants in the explanation of the emergence of DR-CDs (figure 1).29 Popkin
21 Owen, Ann L. and Wu, Stephen, "Is Trade Good for Your Health?” (November 2001). Hamilton College Working Paper No. 01-09.
http://ssm.com/abstract=291055
22 Amartya Sen. "How to Judge Globalism," The American Prospect vol 13 no. 1, January 1,2002 - January 14. 2002.
23 WHO/WTO, WTO Agreements and Public Health: A Joint Study by the WHO and WTO Secretariat, WTO/WHO, 2002 p.74
24 FAO, The State of Food Insecurity in the World 2004: Monitoring Progress towards the World Food Summit and Millenium Development
Goals, Rome, FAO, 2004
25 WHO/FAO. Diet, Nutrition and the Prevention of Chronic Diseases. WHO Technical Report Series 916. Report of a Joint WHO/FAO Expert
Consultation, World Health Organisation. Food and Agriculture Organisation of the United Nations, WHO/FAO Geneva, 2003
26 World Health Organization. The 2002 World Health Report Geneva. WHO, 2002
27 Rayner, G and Rayner M, Fat is an economic issue: combatting chronic diseases in Europe. Eurohealth, 2003, 9(1, Spring): p. 17-20
28 Omran, Abdel R (1971). 'The epidemiologic transition: a theory of the epidemiology of population change', Milbank Memorial Fund Quarterly.
49, 4. p. 509-538
29 Popkin. B. M. (1998) 'The nutrition transition and its health implications in lower income countries'. Public Health Nutrition. 1 (1): 5-21 Popkin.
B. M. (1999) 'Urbanisation, lifestyle changes and the nutrition transition', World Development, 27 (11). 1905-1915.Popkin. B. M. (2002) 'An
overview on the nutrition transition and its health implications the Bellagio meeting'. Public Health Nutrition. 5 (1 A): 93-103. Popkin BM,
6
and others show that radical dietary change is occurring worldwide- traditional diets with a
more limited range of staples are being substituted by a diet more composed of livestock
products (meat, milk and eggs), vegetable oils and sugar. These three food groups together
currently provide 28% of total food consumption in the developing countries (in terms of
calories), up from 20% in the mid-1960s. Their share is projected to rise to 32% in 2015 and
to 35% in 2030.30
Figure 1 Popkin's Stages of the nutrition transition
Urbanization, economic growth, technological changes for work, I eisure,
and food processing, mass media growth
Pattern 3
Receding Famine
Pattern 4
Degenerative Disease
Pattern 5
Behavioral Change
• Starchy, low variety,
low fat.high fiber
• Labor-intensive
work/leisure
• Increased fat. sugar,
processed foods
• Shift in technology of
work and leisure
• Reduced fat, increased
fruit. veg.CHO.fiber
• Replace sedentarianism
with purposeful changes
in recreation, other activity ,
MCH deficiencies,
weaning disease,
stunting
Obesity emerges,
bone density problems
Reduced body fatness.
improved bone health
Slow mortality decline
Accelerated life expectancy,
shift to increased DR-NCD,
increased disability period
Extended health aging,
reduced DR-NCD
CHO: carbohydrates
MCH: maternal and child health
NR-NCD: nutrition-related non-communicable disease.
Source: Popkin BM, An overview on the nutrition transition and its health implications: the
Bellagio meeting, Public Health Nutrition 2002, 5(1 A), 93-103
The links between trade liberalisation and the diet and nutrition transition
The global disease profile has been changing at the same time as trade has been liberalisini
So are the two processes linked? Numerous researchers have suggested so,31 32 33 34 35 3637
3
Richards MK, Monteiro C. Stunting is associated with overweight in children of four nations that are undergoing the nutrition transition. J Nutr.
1996; 126:3009-3016
30 Jelle Bruinsma (ed) World Agriculture: Towards 2015/2030, Rome: FAO/Earthscan. 2003
31 Lang T. Diet, health and globalization ’ five key questions. Proceedings of the Nutrition Society (1999) 58. 335-343
32 Lang T. The public health impact of globalization of food trade. In Diet, Nutrition and Chronic Disease: Lessons from Contrasting Worlds. Ed
Shetty PS and McPherson K. Chichester. John Wiley &Sons, 1997.
33 Hawkes C. The role of foreign direct investment in the nutrition transition Public Health Nutrition (2005) 8,4:357-365
34 United Nations System Standing Commission on Nutrition (UN SCN) Fifth Report on the World Nutrition Situation. Nutrition for Improved
Development Outcomes. Geneva, UN SCN, 2004
35 Manuel Pena and Jorge Bacallao, Malnutrition and Povery, Annual Review of Nutrition, Vol. 22: 241-253, July 2002
36 Chopra M, Galbraith S, Darnton-Hill I. "A global response to a global problem: the epidemic of overnutrition." Bull World Health Organ
2002;80(12):952-8
37 Evans M. Sincalir, RC, Fusimalohi, C.. Liava’a, V Globalization, diet and health: an example from Tonga. Bulletin of the WHO (2001)
79,9:856-862
7
38 and the WHO Technical Report 916 stated that international trade issues “need to be
considered in the context of improving diets” (p. 140).38
39 Trade, in fact, proved one of the most
contentious issues during the negotiation of the WHO's Global Strategy on Diet, Physical
Activity and Health, suggesting a recognition that addressing dietary changes requires a
closer look at trade (contentious because this might threaten certain economic interests).
Yet global trade patterns are immensely complex. Trade policy acts at the macro-level,
affecting households and individuals through complex and poorly understood pathways with
potential for unpredictable and unintended effects, both positive and negative. There is,
moreover, enormous variation in the pace and style of dietary change worldwide. It is thus
difficult to trace the precise links between trade liberalisation and dietary patterns. Still,
considering the potential importance of trade for dietary health, a critical starting point is to
understand how trade liberalisation affects the food supply chain and what this implies for
diets.
Trade Liberalisation and the Food Supply Chain
Trade liberalisation affects the food supply chain at varying levels of complexity - all of which
require public health analysis and debate. The very large subsidies going to agriculture in the
richer OECD countries, given rising productivity, has meant that although the world's
population doubled between 1960 and 2000 and levels of nutrition improved markedly, the
prices of rice, wheat and maize - the world's major food staples - fell by around 60 percent.
The other consequence has been that food imports play an increasingly important role in
many national diets. In the case of the 49 Least Developed Countries (LDCs) by the end of
the 1990s, imports were more than twice as high as exports (See figure 2)
38 FAO. Globalization of Food Systems in developing Countries: Impact on Food Security and Nutrition. Rome. FAO. 2004
39 WHO/FAO. Diet. Nutrition and the Prevention of Chronic Diseases, WHO Technical Report Series 916. Report of a Joint WHO/FAO Expert
Consultation. WHO/FAO Geneva, 2003
8
Figure 2: Agricultural imports and exports of LDCs
Source: Food and Agriculture Organisation of the United Nations , World agriculture: towards
2015/2030: An FAO perspective, Rome: Earthscan, 2003, Section 9.2.1
Independent of the GATT and pre-dating the WTO, the role of food imports in the Pacific
Islands States present an historical example of dietary impacts. Pre-1945, each nation was
essentially self-sufficient, but during the subsequent era of "development” each country
became more reliant on imports, with impact on diets and local production systems. In Fiji, for
example, imports of rice, tinned meat and fish, wheat flour, mutton, pork, sweet biscuits and
sugary drinks increased rapidly after 1945, a trend associated with increased consumption of
bread and meat relative to the traditional dalo and fish.40 In Tonga, meat imports rose from
3389 tonnes in 1989 to 5559 tonnes in 1999, accompanied by a 60% increase in
consumption.41 More recent trade policies have had significant effects on imports, changing
the availability of specific foods: in the US, for example, fruit imports play a far greater role in
the diet than two decades ago.42 Globally, the most notable example is vegetable oils.
According to the US Department of Agriculture, oilseeds products are the most internationally
trade products when total exports are compared with global production.43 In China,
agricultural imports more than doubled between 2002 and 2004 due in part to a more open
trade regime. Soy oil, palm oil, and raw soybeans crushed to make vegetable oils (and animal
feed), accounted for nearly half of this import growth.44 Imports of soybeans increased from
1,107 to 20,416 thousand tons between 1996 and 2000, largely from the United States.45
Higher imports have led directly to greater availability of vegetable oils (i.e. they are not only
substituting for domestic production). Participation in the WTO is further predicted to lower
40 Schultz JT. Globalization, urbanization and nutrition transition in a developing island country: the case of Fiji. In
Globalization of Food Systems in Developing Countries: Impact on Food Security and Nutrition, pp. 195-505. Rome,
FAO, 2004.
41 Evans M, Sincalir, RC. Fusimalohi, C., Liava'a, V. Globalization, diet and health: an example from Tonga. Bulletin
of the WHO (2001) 79,9 856-862
42 Kantor LS, Malanoski, M. Imports play a growing role in the America diet. FoodReview (September-December
1997) 13-17.
43 Regmi A, Gehlhar, M, Wainio, J., Vollrath, T , Johnston, P. and Kathuria, N. Market Access for High-Value Food.
Agricultural Economic Report Number 840. Washington DC: USDA, 2005
44 Gale F. China's Agricultural Imports Boomed During 2003-04. USDA WRS-05-04. Washington DC, USDA, 2005
45 Hsu H-H. Policy changes continue to affect China's oilseeds trade mix. In: Hsu H-H, Gale F, editors.Washington
DC: USDA ERS; 2001. p. 30-6.
9
prices and increase demand for vegetable oils.46 47 Given the highly differentiated impact of
trade at a country level there is an urgent requirement to undertaken health impact analysis to
unravel this complex trade picture.
A second more complex effect of trade liberalisation is on the internal dynamics of the food
supply chain. While local factors remain critical, changes in the food supply chain appear to
be taking on an increasingly uniform character worldwide. Market liberalisation has the effect
of changing existing means of food production and distribution and substitution in increasingly
similar ways. In traditional societies, food supply chains are short and focused on products
grown locally and seasonally available Farmers typically sell their own produce through street
markets As the food supply chain develops in capital intensity and becomes more liberalised,
the task of moving food from farm to table becomes more complex and supply chains are
vastly lengthened. In the process, localism is displaced, scale increased, and investments
increasingly shifted from basic, fresh or seasonal commodities to 'value added’ processed
foods.48 These circumstances are driven by new market players, attracted by the more open
- and thus easier and more cost-effective - market operating conditions: thus the
considerable importance of trade policy. Also important are existing national groups (or co
operatives) reforming to combat the new players, often borrowing their food supply chain
technologies. A public health question is whether or not trade liberalisation discourages local
production and what health impact this has.
At a third level of complexity, trade regulations affect how much investment is made in the
food supply chain - and in which part it is made. Liberalisation of finance is part of trade
regulations, and encourages foreign direct investment (FDI). FDI has proved particularly
important in the spread of highly-processed foods.49 In fact, whereas growth in cross-border
processed food trade has remained minimal since the mid-1990s (in part because of high
tariffs),50 FDI has become increasingly important. In the decade 1988-1997, foreign direct
investment in the food industry increased from US$743 million to more than US$2.1 billion in
Asia and from US$222 million to US$3 3 billion in Latin America, outstripping by far the level
of investments in agriculture.51 In the case of US food companies these sell five times (SUS
150 billion) more through FDI sales than through export sales ($30 billion). FDI has also
stimulated the global spread of supermarkets, in turn a major sales driver of nontraditional
packaged foods The US has the highest concentration of supermarkets, but growth rates in
some regions, such as Latin America and China, have been extremely rapid, as shown in
Table 1. 2 53 The largest shopping malls in the world are now longer in the USA but in
China.54 The implications of the food supply chain and retail revolution over the last half
century has been assumed to deliver public health gain by widening the choice of foods and
lowering price. If nothing else the above analysis suggests that these assumptions are
questionable and too simple.
Table 1. Share of Food Sales for Retailers in Selected International Markets, 2002
46 Fuller F, Beghln J, De Cara S, Fabiosa J, Fang C, Matthey H. China's accession to the World Trade Organization: what is at stake for
agricultural markets? Review of Agricultural Economics 2003;25(2):399-414.
47 Diao X, Fan S, Zhang X. How China's WTO Accession Affects Rural Economy in the Less-Developed Regions: A Multi-Region, general
Equilibrium Analysis. Washington DC: IFPRI; 2002. Report No . TMD Discussion Paper No. 87.
48 Carol Whitton, Processed Agricultural Exports Led Gains in U.S. Agricultural Exports Between 1976 and 2002, FAU-85-01, USDA/ERS,
February 2004
49 Hawkes C. The role of foreign direct investment in the nutrition transition. Public Health Nutrition (2005) 8,4:357-365
50 Regmi A, Gehlhar, M, Wainio, J , Vollrath, T.» Johnston, P. and Kathuria, N. Market Access for High-Value Food Agricultural Economic
Report Number 840 Washington DC. USDA, 2005
51 FAO, The State of Food Insecurity in the World 2004: Monitoring Progress towards the World Food Summit and Millenium Development
Goals, Rome, FAO, 2004
52 Thomas Reardon, C. Peter Timmer, and Julio A. Berdegue, Supermarket Expansion in Latin America and Asia
Implications for Food Marketing Systems, in Anita Regmi and Mark Gehlhar (eds). New Directions in Global Food Markets, Markt/AIB-794
Economic Research Servlce/USDA. Feburary 2005
53 Euromonitor data sourced in Anita Regmi and Mark Gehlhar (eds). New Directions in Global Food Markets. Markt/AIB-794 Economic
Research Service/USDA, Feburary 2005
54 David Barboza. China, New Land of Shoppers. Builds Malls on Gigantic Scale, New York Times. 25 May, Section A , Page 1
10
Table 1—Share ot food sales lor retailers in selected international markets, 2002
Retail outlets
United
Slates
Western
Europe
Latin
America
Japan
Indonesia
Africa and
Middle East
World
Percent sales
S upe r markets/hyperma rkets
Independent food stores
Convenience stores
Standard convenience stores
Petrol'ga&'service stations
Confectionery specialists
Internet sales
Chemists/drugslores
Horne delivery
Discounters
Other
Total
62.1
10.0
7.5
5.7
1 8
55.9
10.0
3.8
2.5
1.2
0.5
0.2
0.2
0.4
7.4
12.0
100
2.0
0.1
0.3
0.2
10.3
17 5
100
47.7
33.0
3.1
1.8
1.3
1.7
0.1
0.2
0.0
0.2
14.0
100
58.0
11.3
18.3
18.2
0.1
29.2
51.1
4.8
4.8
0.0
36.5
27.1
10,0
9.5
0.5
52.4
17.8
7,5
6.4
1.1
0.3
0.4
0.4
0.0
2.2
9.0
100
0.1
0.0
0.2
0.0
2.7
11.9
100
1 3
0.0
0.3
0.0
6.2
18.6
100
1.2
0.2
0.3
0.1
5.7
14.9
100
Source; Euromonitor. 2004.
Source: Euromonitor / USDA ERS (2005)
Supermarkets may be the visible end point of the new supply chain, but in terms of products,
soft drinks provide a critical illustration of the complex market development process - and are
probably the best indicator of likely changes in overall diet, since increasing demand for soft
drinks indicates the likelihood of purchasing processed foods.55 Table 4 shows sales of soft
drinks worldwide by country income. These products use cheap constituents, the bulk of
which is acquired locally, some of which is imported from the company point of origin. They
typically require large investments in production facilities, distribution infrastructure, and
marketing The biggest brands already have global recognition although the products are
produced locally, vastly reducing transport costs. FDI sales for US soft drink brands were SUS
30 billion in 1999 (in a global market of SUS 393 billion) while US soft drink exports only SUS
232 million in 2001.
55 Bolling. Chris. "Globalization of the Soft Drink Industry," Agricultural Outlook. No. 297, December 2002. pp. 25-27
11
Table 2. Retail sales of soft drinks, 2002 and growth 19972002
Table 1-4—Retail sales of soft drinks
1997-2002 an. avg. growth
Market
2002
sales
Million liters
High-income countries:
France
Germany
Japan
Singapore
United Kingdom
United States
Share of
carbonated drinks
All
soft drinks
Carbonated
drinks
—— Percent ——
12,755
18,920
16,885
448
10,031
91,286
17.4
31.2
16.3
41.2
57.3
66.0
4.4
2.4
4.5
4.9
3.6
3.1
2.4
2.9
1.0
-0.9
1.9
1.4
High-middle-income countries:
Brazil
16,630
Chile
1,762
Czech Republic
2,524
Hungary
1,561
Mexico
34,874
South Africa
2,938
South Korea
3,737
Turkey
7,508
71.8
85.2
33.3
44.1
46.0
80.1
33.4
32.2
5.9
2.4
10.7
7.0
8.6
6.8
5.7
6.7
2.5
1.9
8.0
1.6
4.1
6.2
3.8
5.2
1,561
5,010
52.3
27.4
76.0
38.6
64.2
41.8
47.6
14.3
15.9
-0.1
3.5
12.0
13.5
7.9
10.4
8.8
3.3
2.8
8.4
9.9
2.7
3,272
9,017
1,378
539
60.3
8.9
47.7
58.4
13.9
21.7
7.9
4.8
7.9
7.8
6.0
-1.8
Low-middle-income countries:
Bulgaria
774
China
22,952
Colombia
3,484
Morocco
961
Philippines
4,998
Romania
Russia
Low-income countries:
India
Indonesia
Ukraine
Vietnam
Source: Euromonitor, 2003.
Source: Euromonitor / USDA ERS (2005) (Note correct attribution above table is Table 2)
Much has been written about the dietary and health impact of increasing consumption of
sugary drinks in western countries;56 57 58 like supermarkets, international brands often bring
with them powerful notions of modernity, with a particular appeal to young people.
The rise of personal income in urbanised middle income groups is associated with high
growth rates of packaged food products, which range from 7 percent in upper middle income
countries to 28 percent in lower middle income countries, compared to 2-3 percent in
56 Ludwig DS, Peterson KE, Gortmaker SL Relation between consumption of sugar-sweetened drinks and childhood obesity: a prospective
observational analysis. Lancet. 2001, 357 :505 -508
57 Popkin. B. M. and Nielsen, S. J (2003) ‘The Sweetening of the World's Diet', Obesity Research. 11: 1325-1332:
58 Committee on School Health, American Academy of Pediatrics. Policy Statement: Soft Drinks in Schools, Pediatrics, Vol. 113 No 1 January
2004, pp. 152-154
12
developed countries (Table 3).59 Concerns about diets high in fat, sugar and salt, found
increasingly in developed countries, may have no counterpart in many developing countries.
Consequently, many manufacturers which experience growing resistance to these product
ranges in their home markets look to developing countries for potential rapid growth.
Moreover, such investments are likely to be welcomed by developing countries as evidence of
modernisation, new foreign investment and employment. Another cross-border factor shaping
the impact of trade on public health is the rapid growth of sophisticated marketing and
advertising (see table 4)
Table 4: Worldwide growth in advertising - 1990-2003
WORLDWIDE AD GROWTH: 1990-2003
U.S.A.__________________ OVERSEAS___________TOTAL WORLD
BILLION
%
BILLION
%
BILLION
%
USS
CHANGE
US $
CHANGE
USS
CHANGE
1990
$130.0
+ 3.9%
$145.9
+ 11.8%
$275.9
+ 7.9%
1991
128.4
- 1.2
153.9
+ 5.5
282.3
+ 2.3
1992
133.8
+ 4.2
165.4
+ 7.5
299.2
+ 6.0
1993
141.0
+ 5.4
163.2
-1.3
304.2
1 -7
+ 1.7
88
1994
153.0
+ 8.6
179.0
+ 9.7
332.0
+ 9.1
—
1995
165.1
+ 7.9
205.9
+ 15.0
371.0
+ 11.7
1996
178.1
+ 7.9
212.1
+ 3.0
390.2
+ 5.2
1997
191.3
+ 7.4
210.0
-1.0
401.3
+ 2.8
+ 2.6
1998
206.7
+ 8.0
205.2
-2.3
411.9
1999
222.3
+ 7.6
213.8
+ 4.2
436.1
+ 5.9
2000
247.5
+ 11.3
226.8
+ 6.1
474.3
+ 8.8
2001
231.3
-6.5
209.6
-8.6
440.9
-7.9
2002
236.9
+ 2.4
213.6
+ 1.9
450.5
+ 2.2
2003*
247.7
+ 4.6
222.1
+ 4.0
469.8
+ 4.3
* In current local currencies
Future scenarios for trade and dietary health
In nineteenth century Europe, nutrition was a powerful driver for both improving population
health and industrial development.60 In the twenty first century, the health and economic
consequences of dietary change for developing countries may prove equally important. In
conditions of increasing inequality, a proportion of the population are likely to continue to be
undernourished while another section are likely to undergo massive changes in their diet, with
profound nutritional and health consequences.
What therefore is the future for trade policy and dietary health? In the past trade policy used
to be dominated by farm and commodity groups but from the 1980s multinational food firms
began to participate in the trade negotiations. Protectionism has been strong, but the balance
59 Euromonitor data sourced in Anita Regmi and Mark Gehlhar (eds). New Directions in Global Food Markets, Markt/AlB-794 Economic
Research Service/USDA, Feburary 2005
60 Fogel, Robert William. "New Findings on Secular Trends in Nutrition and Mortality: Some Implications for Population Theory," M. R.
Rosenzweig and O Stark. Handbook of population and family economics Handbooks in Economics, vol. 14. Amsterdam; New York and Oxford:
Elsevier Science North-Holland, 1997, pp 433-81
13
of power has now shifted. Much more liberalisation of the farming and food sectors is likely,
and food-related WTO, regional and bilateral agreements are likely to become more
important, along with the influence of non-farm food groups. Past experience of trade policies
suggest they result in a growing separation between agriculture, whose commodities are
dropping in value, and the food processing and retail industries, which take an increasing
share. From this, we discern three possible scenarios for how the relationship between food
trade and dietary health could develop:
o
o
o
Business as usual. Further development of global and national markets drawing on
globalised technology, supermarketisation and consumer dietary patterns, but retaining a
semblance of regional and national variations in dietary composition. This represents
what will happen in the absence of a public health or food industry response to concerns
about unhealthy diets.
Fragmentation. Development of processed 'niche' food products designed to contribute to
healthy diets, heavily packaged and advertised, but which do not fundamentally alter
existing farm and food systems, or how food is grown, processed or traded. This
represents what will happen if the dominant response to the problem comes from the food
industry. Stung by the obesity crisis worldwide, some international food companies are
already pursuing this scenario, hoping to highlight their products' health benefits.
Health at the centre of trade. Dietary health and nutrition becomes a key arbiter of future
food and farming, including trade. This represents what will happen if there is a strong
public health response to dietary concerns, integrated into a health-sector wide approach
to centralising health considerations into trade. Driven in part by recognition of immanent
drivers of change such as water shortage and climate change, this 'ecological public
health' approach to food and farming is beginning to emerge.61
We judge the first two as currently most likely in the short-term, but believe that public health
analysis will increasingly argue for the third. We now explore this further.
Putting health at the centre of trade: promoting health governance
In an increasingly globalised obesogenic culture, merely encouraging people to adopt
healthier lifestyles cannot work without tackling some of the upstream forces, such as
commerce and trade.62 Thus we propose that to move towards the “health at the centre”
scenario, dietary health needs to be incorporated into a cogent and consistent public health
approach of making health as a whole (e.g. under- and over-nutrition, infectious and chronic
diseases) a central consideration of commerce and trade. For this to happen, civil society
would need to take a strong advocacy role, and national governments integrate health
strategies across departments of state, involving business and civil society. One potential
model is that formulated through a consultation by WHO (see figure 3). Lessons could be
learned from attempts to inject sustainability / environmental protection into business
activity.6364
Measures must also address both the supply and demand side of economic activity,
for example by attempting to change the relative prices of healthy and less healthy foods.54
61 Lang T, Heasman M (2004). Food Wars. London. Earthscan
62 Chopra M, Galbraith S, Darnton-Hill I. "A global response to a global problem: the epidemic of ovemutrition." Bull World Health Organ
2002;80(12):952-8
63 T Lang, M Heasman (2004). Food Wars. London: Earthscan
64 Lawrence Haddad, Redirecting the Nutrition: What can Food Policy Do? In Food Policy Options Preventing and Controlling Nutrition Related
Non- Communicable Diseases November 20-21, 2002, pp 11-15, Washington, World Bank. 2003
14
Figure 3. Formulating a nutrition policy for the prevention of Non Communicable
Diseases: emerging concepts for a WHO 2002 consultation
Formulating a nutrition policy for the prevention of NCDs. Emerging concepts from WHO 2002 Consultation
WHO
I FAO, UNICEF, UNESCO, WTO, World Bank etc. |-
Ministry of health actions
National Information
Health statistics —
Dietary & risk fact.surveys —
Nutritional surveillance —
Food production—
Agricultural
Food production statistics
Market structure
Import/export policies
Food security measures
Public perception
Economic evaluation of
policy proposals—
Private sector
MINISTRY of HEALTH
(HEALTH POLICY
GROUP)
INDEPENDENT
NATIONAL
INSTITUTION
------- ►
1. Professional training
2 Health promotion
national networks (NGO, voluntary Orgs.)
national campaign
3. Regional and district food policy
4. Catering establishments
5. Priorities, research and surveillance
Actions
I-------------------------------------- 1 • school & postgraduate
—-H
Ministry of Education | education
• school meals
I———----- —------- - ----- 1 • coordinating
H Ministry of Information | educational materials
* re-evaluation of current
Ministry of
Agriculture/Environment] policies
I
Nongovernmental
organizations and
consumer
representatives
_____________________ • controls on food
Ministry of Trade
I industry
------------------------------------- 1 ■ licensing, cooperative
trade arrangements
Ministry of Finance I *
subsidy
------------------------------------- ' adjustments
Ministry of Foreign
Affairs_____
• policy on import I
export trade
* coordinating
regional actions
Source: Personal Communication, Amalia Waxman & Derek Yach
More specifically, we propose a spectrum of action by public health professionals and
advocates in international organisations, ministries of health and civil society organisations to
address trade-related diet issues, as follows:
o
Strengthen food governance and build capacity to address dietary health. A central
issue is the effectiveness of institutional frameworks for control and monitoring of the
food supply chain from a nutritional balance perspective, alongside food safety,
which, as shown, is the major focus of international and national food governance.
Globally, the Codex Alimentarius Commission is now beginning to discuss how they
could implement components of the WHO Global Strategy on Diet, Physical Activity
and Health. Nationally, developing capacity to address dietary health is a real
challenge, so drawing on existing frameworks - and using complementarity to
strengthen them - would be critical. Filling these capacity gaps is a necessary
precursor to further action.
o
Audit the impacts of commerce and trade on diets. While much has already occurred,
the liberalisation of food trade is still in its relatively early stages. Auditing emerging
trade liberalisation on diets is thus needed. Monitoring of food industry and
agribusiness responses to trade agreements - mergers across borders, growth and
marketing trends, and internal efforts to move to a healthier product mix - would be
one example. This is also of interest to investment banks, with their concerns about
the long run sustainability of the food sector.65
o
Consider the role of trade agreements and international agreements which affect
trade to address dietary health. There have been calls for trade agreements to be
made more sensitive to health issues,66 but realistically there are limits on what can
be done within international trade agreements: trade institutions view their agenda as
65 J.P. Morgan. (2003) Obesity The Big Issue, JP Morgan European Equity Research. 16 April
66 Ron Labonte (1993) ‘Healthy public policy and the World Trade Organisation, a proposal for an international health presence in future world
trade/investment talks’. Health Promotion International. 13. 3. 245-256
15
_
liberalising trade under the assumption it will generate health benefits, and WTO
agreements already have a “pro-health’' clause. But dietary health remains excluded
as food is considered only is so far as it is unsafe - not its nutritional quality. More
thinking is needed about how this gap can best be addressed. The Framework
Convention on Tobacco Control provides some lessons of developing a non-trade
treaty which nevertheless sets a pro-health standard in any trade dispute (The FCTC
does not specifically refer to trade, but uses language indicating that health should be
the prime consideration). The Treaty also contained potentially commerce-restrictive
consumer-oriented strategies, including taxes, labelling, advertising, product liability
and financing. Food is not tobacco, but concerns warrant a similar approach, such as
on food marketing to children, product labelling, or tax discrimination between
healthier and less healthy foods. There is a powerful case for consumer protection
strategies to protect or activate the most vulnerable. On marketing, these might range
from bans on advertising to decisions that schools or public institutions should be
commerce-free areas 6~Such regulations have trade implications, so public health
professionals must play a role in educating trade policy professionals about their
potential health benefits in order that health can be taken into account in any potential
adjudication process. Of note, however, the WHO Strategy includes the phrase:
“reaffirming that nothing in this strategy shall be construed as justification for adoption
of trade-restrictive measures or trade-distorting practices".67
68
o
Develop national supply side measures to build new markets for healthy foods. In
developing countries, traditional food markets are denoted by short supply chains and
high levels of contact between primary producers and consumers. Further
commercialisation is associated with the replacement of local markets by regional
and then national markets and patterns of ownership, often instigated by national and
local government.69 70 A way to maintain local patterns of ownership is the
encouragement of cooperatives linking suppliers, retailers and consumers. Building
markets for healthy foods could be a focus for such cooperatives, while also
benefiting local economies.
o
Financing public health capacity. The foregoing proposals have little hope of success
without adequate resourcing. In many countries the public health infrastructure professions, resources, facilities, influence and power - is already weak. One
potential means for resourcing capacity - including new social marketing efforts may be through industrial levies or special or hypothecated taxation, as has occurred
in the case of the former linked to developed countries tobacco legal settlements, or
potentially through marketing taxes or taxes on energy-dense foods.
Conclusion
The paper has pointed to the considerable complexity in the impact of commerce and trade in
food on public health. The solutions required to avert the negative consequences of the diet
and nutrition transition will neither be simple nor applied without considerable difficulty. At the
very least Departments of Commerce and Trade ought to have better public health input into
their deliberations and policy making and - vice versa - Departments of Health and the public
health movement need to become more sophisticated in their analysis of the health impact of
commerce and trade and in determining the potential entry points to achieve public health
gain.
67 Hawkes C (2004). Marketing Food to Children: the Global Regulatory Environment. Geneva: World Health Organisation
68 Fifty-seventh World Health Assembly. Geneva, 17-22 May 2004, WHA57.17 Global strategy on diet, physical activity and health
{OECD, 2005 #1)
69 Reardon T. Swinnen JFM. Agrifood Sector Liberalization and the Rise of Supermarkets in Former State-Controlled Economies- Comparison
with other developing countries Development Policy Review 2004; 22: 515-523
70 Hu D, Reardon T. Rozelle S. Timmer P. Wang H. The Emergence of Supermarkets with Chinese Characteristics: Challenges and
Opportunities for China's Agricultural Development. Development Policy Review 2004; 22: 557-586
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Acknowledgement
Our thanks to KC Tang and peer reviewers of this paper for their helpful suggestions.
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