Industrial News: July 2009

Free trade agreements and health services

Agreements between countries to reduce barriers and to increase trade have dramatically expanded over the last two decades. Free trade agreements (FTAs) have been developed on a bilateral basis between two trading countries or alternatively on a regional basis between a group of trading countries. Australia has been a strong advocate of free trade and has entered into agreements with a number of Asian countries, as well as the United States and New Zealand.

For the most part these agreements have been negotiated on the basis of reducing or removing restrictions on the import and export of goods and have excluded services such as education, transport and health care, acknowledging that the inclusion of these services may impact on equity and access to essential services as well as the right of a sovereign government to determine how services are provided.

Australia will shortly begin negotiations with a number of Pacific Island countries (PICs) for a regional free trade agreement that will not only include trade in manufactured and agricultural goods but also services like health and education.

Most PICs are defined as developing countries which means with citizens who are typically agricultural workers with a low standard of living and little access to essential goods and services. In these countries domestic governments fund and provide most of the country’s health services, which are normally funded by taxes and aid programs.

A number of PICs pursuing public health campaigns against poor nutrition and attempting to combat increased rates of diabetes, hypertension and obesity are being undermined by free trade agreements. Current regulations governing FTAs conflict with public health policy. A recent example led the Fiji government to overturn a decision to ban cheap and poor quality sheep imports from New Zealand after that country threatened to take action against Fiji in international courts. New Zealand claimed banning the cheap imports from their country could discriminate in favour of the US.

Free trade agreements also reduce the ability of governments to raise revenue through taxation. Recent independent reports indicate that free trade agreements may result in a number of PICs losing between 15% and 20% of annual government revenue, much of which would otherwise go to the provision of public health services.

Any reduction in an already scarce health services will dramatically affect the wellbeing and the economic stability of PICs, especially for poor people living in the rural and remote areas who already have difficulty accessing services in the major urban centres.

Nick Blake
ANF Federal Senior Industrial Officer