Viewpoint
Emerging threats to public health from regional
trade agreements
Deborah Gleeson, Sharon Friel
The decision by Australias High Court to uphold
the constitutionality of the countrys ground-breaking
tobacco plain packaging laws1 has been heralded as a
victory for national sovereignty over vested interests.2
However, the ability of governments worldwide to
introduce and implement public health policies and
laws is increasingly threatened by trade and investment
treaties that privilege investors over governments and
provide avenues for international corporations to chal-
lenge democratically enacted public health policies in
dierent countries.3,4
The risks are clearly shown by Philip Morris Asias
challenge to Australias plain packaging laws under the
investorstate dispute settlement (ISDS) provisions set
out in an investment treaty between Australia and
Hong Kong.3 The action by Philip Morris Asia seems to
be part of a global strategy by the tobacco industry to use
international trade and investment dispute mechanisms
to undermine tobacco control measures. Other such
disputes include investor-state actions by tobacco com-
panies against Uruguay and Norway and challenges
within the dispute mechanisms of the World Trade
Organisation (WTO) brought against both the USA and
Australia by other countries.5,6
Through the ISDS mechanism, Philip Morris Asia is
seeking the suspension of enforcement of Australias
plain packaging legislation, or millions of dollars in
compensation on the grounds that the value of its in-
vestment has been aected by the supposed expropri-
ation of its trademarks and related branding.7 Australia,
however, has a strong case, in part because Philip Morris
Asia acquired its holdings in Philip Morris Australia in
February, 2011, after the Australian Government had
announced its intention to introduce plain packaging.8
But the costs of such litigation can amount to millions of
dollars, the ISDS process is without many of the
safeguards and the transparency of domestic legal
systems, and the mere threat of legal action can have a
powerful deterrent eect on governments considering
the introduction of new laws to regulate industry in ways
that protect public health.3
On a global scale, the most recent trade-related threat
comes from the negotiations for the Trans Pacic
Partnership Agreement (TPP), a large regional trade
agreement consisting of 11 countries around the Pacic
RimAustralia, Brunei, Canada, Chile, Malaysia, Mexico,
New Zealand, Peru, Singapore, USA, and Vietnam.
Together these countries account for almost 10% of the
worlds population.9 They include some of the biggest
economies in the world, accounting for more than 30% of
the worlds gross domestic product (with a combined
www.thelancet.com Vol 381 April 27, 2013
value of US$20 734 billion in 2011),10 in a region that Lancet 2013; 381: 150709
represents 40% of global trade.11 More countries are likely Published Online
to accede in future: Japan, Thailand, and the Philippines March 1, 2013
http://dx.doi.org/10.1016/
have already expressed interest in potentially joining.
S0140-6736(13)60312-8
Arguably a geopolitical manoeuvre on the part of the
School of Public Health and
USAwhich is seeking to stake its claim in the region Human Biosciences, La Trobe
as a counter to Chinathe TPP might tilt the axis of University, Melbourne, VIC,
economic power towards this region of the world, and, by Australia (D Gleeson PhD); and
National Centre for
setting an ambitious precedent, reset global trade rules.
Epidemiology and Population
Negotiations for the TPP began in March, 2010, and the Health, The Australian National
16th negotiating round will begin on March 4, 2013, in University, Canberra, ACT,
Singapore. Negotiations are held under conditions of Australia (Prof S Friel PhD)
condentiality and draft texts are not publicly available. Correspondence to:
The agreement includes 29 chapters or negotiating Dr Deborah Gleeson, School of
Public Health and Human
areas,12 ranging from traditional trade issues such as Biosciences, La Trobe University,
trade in goods and technical barriers to trade, to areas in Melbourne, VIC 3086, Australia
which unprecedented commitments have been pro- d.gleeson@latrobe.edu.au
posed, such as regulatory coherence as well as stronger
intellectual property rights and investor protections than
those provided by previous trade agreements.
Regional trade agreements such as the TPP are
emerging in the context of countries being unable to gain
the terms they want through the multilateral trading
system generally overseen by the WTO. During the past
decade, the WTO has been progressively abandoned by
wealthy countries in favour of bilateral and regional trade
agreements, leading to multiple overlapping trade com-
mitments of increasing complexity.13
The capacity for regional agreements such as the TPP
to create and exacerbate health inequities derives, in
part, from their inherent power imbalances. Wealthy
countries have more bargaining power to negotiate
advantageous trade rules, and tend to use this power to
gain concessions that they are unable to obtain through
the WTO.13 Large corporations also hold disproportionate
power in such agreements, and are the beneciaries of
their rules, which they are able to enforce through new
dispute settlement mechanisms. These asymmetries are
compounded by the lack of accountability and trans-
parency measures compared with the formal rules
and dispute settlement procedures of the multilateral
system. Such power dynamics can exacerbate inequities
in the benets from trade.14
The TPP is a prototype of a new style of regional trade
agreement that presents profound new threats to global
health and health equity. Unlike older trade agreements,
21st century trade is no longer about selling goods
produced in one nation to customers in another: it is a
complex mix of trade in goods, services, and invest-
ments.15 The TPP will deepen global economic inte-
gration by reaching much further into the regulation of
1507
 Viewpoint
domestic policy than any other trade agreement, and
introduces new and much stronger intellectual property
and investor rights than previously experienced.16
Leaked negotiating documents show that the USA is
pursuing several provisions for this agreement that would
constrain domestic policy space for governments to
protect the health of their populations.3 Policy space refers
to the exibility available to governments to choose,
design and implement public policies to full their aims.4
We now describe two major ways in which the TPP is
likely to aect public health.
The rst way is that the TPP will reduce access to
medicines if the USA succeeds in implementing its
agenda in the negotiations. The USA is seeking to impose
very high levels of intellectual property protection that
would delay the introduction of generic drugs, and to
impose restrictions on the operation of domestic
pharmaceutical programmes that would undermine the
regulation of drug prices.17,18 These requirements are
likely to exacerbate problems with access to aordable
drugs in low-income and middle-income countries, and
to contribute to inequities within wealthy countries:
socially disadvantaged groups will be most vulnerable to
rising drug prices.
In high-income countries such as Australia and
New Zealand, rising drug prices would probably result in
the rationing of access to drugs (eg, restricted access to
new drugs), increased copayments from patients, or an
increased proportion of the health budget being allocated
for pharmaceuticals (or some combination of these out-
comes). Each of these potential consequences has equity
implications.
Expansion of intellectual property rights for drug
companies through regional trade agreements such as
the TPP is especially inappropriate in view of WHOs
Expert Working Group on Research and Development
2012 report.19 This report recognised the unacceptable
societal and health cost of strong intellectual property
rights and proposed a global research and development
treaty as a basis for alternative nancing of pharma-
ceutical research and development.
The TPP countries seem to be rejecting many of the
US proposals related to drugs, which has slowed the
negotiations, with discussion of drugs postponed until
later rounds.20 In view of the imbalances in negotiating
power, however, it is unclear how much the US demands
will be moderated. There are real risks that the other
countries in the TPP will concede to US demands
because of political pressure and the expectation of
economic gains in other sectors.
It is dicult for low-income and middle-income
countries to obtain an appropriate balance between
rights and obligations in the context of bilateral and
regional free-trade agreements, as opposed to more
inclusive multilateral platforms such as the WTO. The
outcomes achieved in the WTO Doha Declaration on the
Trade Related Aspects of Intellectual Property Rights
1508
(TRIPS) Agreement and public health, which armed
that governments had the right to prioritise public health
over intellectual property rights,21 stand in stark contrast
with the more extreme intellectual property rights in
many subsequent free-trade agreements negotiated
outside the WTO.22
The second way in which the TPP is likely to aect public
health is a reduction of the ability of states to regulate on
public health grounds. The TPP could restrict the ability
of governments to regulate industries that produce
goods that contribute to the growing burden of non-
communicable diseases, such as tobacco, alcohol, and
highly processed foods. Governments need to be able to
raise the prices of unhealthy goods, to restrict marketing
and advertising as well as sale and distribution, and to
regulate labelling of these products. It is vitally important,
for example, to retain the ability to put warnings on alcohol
products, or to introduce new rules around nutrition
labelling and advertising for food. But many parts of the
TPP could restrict the exibilityor policy spacefor
governments to be able to set and implement these
important public health policies.
One of the most concerning issues is the proposed
ISDS clause in the investment chapter of the TPP, which
is similar to the clause in the investment treaty between
Hong Kong and Australia being used to challenge
Australias tobacco plain packaging laws. Including an
ISDS clause would make the TPP countries vulnerable to
legal challenges not just by the tobacco industry, but also
by the pharmaceutical, alcohol, and highly processed
food industries. The eect of the threat of such challenges
would probably be most felt in low-income and middle-
income countries, which have the greatest burden of
non-communicable disease but which can least aord
expensive and protracted litigation.
Leaked negotiating documents23 suggest that Australia
is seeking an exemption to the ISDS provision proposed
for the TPP, consistent with its trade policy position,
adopted in 2011, not to agree to ISDS in trade and
investment agreements.24 Australias position could also
have been cemented by its experience with tobacco
industry litigation. To date, Australia seems to be alone in
rejecting ISDS in the TPP, and seems to be under
pressure from other countries and from domestic
business interests to renege on this commitment.25
Regional trade agreements such as the TPP pose new
and great challenges to public health. The unequal
distribution of power within the TPP and the imbalance
between economic and health objectives threaten to
undermine any health benets for communities that
might potentially arise from free trade.
In 2008, the WHO Commission on Social Deter-
minants of Health recommended action to ensure that
health and health equity was not harmed by global trade.
The commission recommended the institutionalisation
of health equity impact assessment of global, regional,
and bilateral economic agreements. It recommended
www.thelancet.com Vol 381 April 27, 2013

that government policy-setting bodies, with support from
WHO, ensure and strengthen representation of public
health in domestic and international economic policy
negotiations. And it recommended that national
governments, in collaboration with relevant multilateral
agencies, strengthen public sector leadership in the
provision of essential health-related goods and services
and the control of health-damaging commodities.14 These
recommendations, along with subsequent calls for
greater coherence between trade and health policy,26 have
been largely ignored by policy makers and the public
health community, except among a small group of
researchers and civil society groups that are concerned
about the social and health eects of trade agreements.
Even when substantial power imbalances exist, states
can ultimately refuse to accept provisions in trade agree-
ments that jeopardise health. Public health advocates
have a crucial role to play in ensuring that health is taken
into account and protected. An example is the way in
which the access to medicines movement has drawn
attention to the dangers of expanding intellectual
property rights in free-trade agreementssuch as
through the publication of Mdecins Sans Frontires
TPP issue brief Trading Away Health.27
In the context of emerging 21st century regional trade
agreements, it is crucial for the public health community
to understand the changes occurring and to engage
urgently with trade policy issues to ensure that policy space
is not eroded and health inequities are not perpetuated.
Contributors
DG and SF discussed and agreed on the focus of the paper. DG drafted
the text and SF revised it. Both authors agreed on the nal draft.
Conicts of interest
We declare that we have no conicts of interest.
Acknowledgments
We thank Ruth Lopert and three reviewers for their helpful comments
on earlier versions of this paper.
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