The New International Trade Regime: Problems for Publicly Funded Healthcare in Canada?

By Ostry, Aleck | Canadian Journal of Public Health, January/February 2001 | Go to article overview
Save to active project

The New International Trade Regime: Problems for Publicly Funded Healthcare in Canada?

Ostry, Aleck, Canadian Journal of Public Health

Since the early 1970s and the demise of the Bretton-Woods agreement, economies have increasingly moved towards globalization as markets internationalize and deregulate a process that has been facilitated by the World Trade Organization (WTO), with new and historically unprecedented powers to enforce trade rules.1

Why should the process of globalization, in general, and the rise to prominence of the WTO in particular, interest health researchers and policy makers? First, because, "owing to the health consequences, good and bad, of the sanctioning of monopoly pricing of new drugs and medical products - and because of its influence over international trade in medical supplies, insurance, and health services - the World Trade Organization is likely to emerge as one of the most important international players in health."2' Pg.193

Second, as well as the direct impact of the WTO on the trade in medical products, globalization may also impact health by creating a "regulatory deficit", wherein national institutions are rendered less effective by the internationalization of markets.3 A key to understanding the regulatory deficit attendant on the internationalization of markets lies both in an appreciation of the indirect pressures brought to bear on the nation state by deregulated international markets as well as the direct powers of coercion the WTO can now apply to nations to open markets.

This paper discusses the potential for the WTO, through its influence on the trade in health and ancillary services, to directly impact publicly funded healthcare delivery systems.

Recent changes in the international trading regime

Most nations are bound by the rules of the General Agreement on Tariff and Trade (GATT), established in 1946 and superseded by the World Trade Organization (VETO) in 1995. The scope of the WTO is much larger than it was under GATT. In the past, trade agreements have largely involved trade in goods such as raw/natural products, manufactured products, and commodities. Today, international agreements have been extended to include trade in intellectual property and services (the fastest growing trade sector among developed nations).

The major impacts on healthcare services in developed nations will likely arise through WTO regulations governing the trade in services.

Potential for trade-in-services regime to impact healthcare delivery

The Trade-Related Intellectual Property Rights (TRIPs) agreement requires all WTO members to adopt US-style patent laws. Over the past several years, the Canadian government, under threat of patent law changes initially introduced via the Free Trade Agreement (FTA) between Canada and the United States, moved to expand patent protection for brand name drug companies at the expense of Canadian generic drug companies that had been supplying the Canadian market with low-cost generic drugs.4 Although Canada had cracked down on its own generic drug companies, the TRIPs agreement was used to force the Canadian government to extend drug patent protection to multinationals to the full 20 years required under US patent law.5

The implications for healthcare systems are potentially serious because enhanced patent protection, by allowing drug companies to protect themselves from competition for a longer time, will reduce the availability of cheap drugs. This is a major problem because drugs are the single fastest-growing component of healthcare budgets.

Another important agreement, the General Agreement on Trade in Services (GATS), covers not just cross-border trade, but every possible means of supplying a service. At present, nations have the right to keep sectors of their service economy outside the scope of GATS. However, while Canada has taken the position that its health and education services will not be included in GATS, both the European Union and the United States are in the process of volunteering these sectors for full inclusion under GATS.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

The New International Trade Regime: Problems for Publicly Funded Healthcare in Canada?


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?