In this post, guest blogger Ronald Labonté concludes a two-part blog series about post-2015 development goals. Discussed are their relationship to health and specific steps Canada could take to encourage a healthy and progressive transition. Labonté holds a Canada Research Chair in Globalization and Health Equity at the Institute of Population Health, and is Professor in the Faculty of Medicine, University of Ottawa; and in the Faculty of Health Sciences, Flinders University of South Australia.
Part I of this post commented on a number of global and intergovernmental initiatives to define new post-2015 development goals, specifically the sustainable development goals, the UN high level panel report and the health goals mooted by the World Health Organization. It also included brief analyses of the role Canada could play in each. Part II focuses more closely on Canada’s role, with some specific recommendations for a healthy and progressive stance we could be taking.
Aid, trade and health
Canada still lacks foreign policy coherence, in that we pursue trade and investment agreements that could compromise health equity globally, while committing to a charity model of international health aid. (We are far from alone in this regard.) More troubling is the trend to tie development assistance to the trade and economic interests of donor countries. The ‘trade not aid’ rhetoric has led to ever-larger sums of ODA being allocated to ‘aid for trade’. If Canada is to join in this chorus (which seems imminent with the transfer of its aid department to that of foreign affairs and trade) then the rules of trade treaties that we negotiate should clearly provide disproportionate benefits to poorer, aid-recipient countries. This is not presently the case. This lack of foreign policy coherence has salience both for UHC (where high-income countries with health financing and service industries are mobilizing to sweep the global low- and middle-income country field); and for control of noncommunicable diseases, where trade and investment treaties are posing risks to public health regulation (10).
Here, Canada could support growing public health advocacy to establish full health carve outs and strengthened health exceptions in trade treaties, starting with the detailed texts of the ‘agreed in principle’ Comprehensive Economic and Trade Agreement (CETA) with the EU, and the still to be completed 12-nation Trans Pacific Partnership Agreement (TPPA), the other major countries being the USA, Japan and Australia. There is growing support amongst some of the TPPA’s negotiating countries for a tobacco carve out in that treaty, such that no tobacco control policy could be challenged in a trade dispute. Such tobacco exceptionalism, while good for health as far as it goes, could nonetheless be problematic if we are also concerned with the global health risks posed by Big Food, Big Alcohol or Big Pharma. A more radical approach would be to ensure that such treaties include a provision requiring deference to WHO soft law (e.g. the Framework Convention on Tobacco Control) or World Health Assembly approved global actions plans (e.g. on noncommunicable diseases) whenever a public health policy or regulation is subject to a trade or investment dispute. Given Canada’s current obsession with striking trade and investment treaties with as many countries as possible – indeed, the only new foreign policy by our Conservative government commits to a ‘sea change in the way Canada’s diplomatic assets are deployed around the world’ such that all are ‘harnessed to support the commercial success by Canadian companies’ (11) – we are unlikely to lead this charge. At the same time, according to the leaked TPPA chapter on intellectual property rights, Canada has been opposing almost every effort by the USA to extend patent protection in that treaty beyond provisions in the WTO’s TRIPS Agreement (12). So there may be some room for a stronger global public health presence in Canadian trade policy.
Aid for tax reforms instead?
Aid disbursements will be necessary for many low-income countries, especially in sub-Saharan Africa, since taxation reforms are still years away in being effectively developed. But aid is no substitute for domestic economic empowerment; and taxation is fundamental to that empowerment, and to responsible state building and the social contract between well-functioning states and their citizens. Thirty or more years of advice to or obligations on developing country governments by the IMF and World Bank to keep taxes low to attract foreign direct investment have done well for the investors, but poorly for most of the countries’ citizens.
Somewhat late in the game, both the IMF and World Bank are now talking about the need for developing countries to substantially increase their taxation rates and improve their taxation systems (though still favouring regressive consumption over progressive income or corporate taxes). This is not to say that African countries have not been trying to comply, with their tax to GDP ratio in recent years rising to between 17 and 20 percent (13). But this rate is still too low to be adequate (the EU 15 countries average over 40 percent), and still inefficient and full of exemptions for imports, investors and transnational profits. As well, the continuing importance of tariffs as a form of taxation for some of these countries means that in any Canadian trade treaty involving developing countries, including those in South Asia where the tax to GDP is the lowest in the world, high tariff reductions should not be on the agenda until there is evidence of effective and transparent progressive tax systems in place. Why not aid for progressive taxation reforms, rather than (or at least in addition to) aid for trade?
Given that Canada has also become the Western world’s global mining giant thanks to the domestic tax breaks we give to mining companies, we also have a potential role to play in supporting developing countries (especially those in Africa and Latin America) in their efforts to increase their persistently low royalty rates, which were largely imposed during structural adjustment programs in the 1980s and 1990s.
We could also join with other countries in supporting innovations in global taxation. Why is Canada not supporting financial transaction taxes? Why haven’t we joined the very basic UNITAID airline tax? Why are we not doing more to close offshore financial centers, tax havens?
Canada could take an assertive role in the most recent G20 promise to develop a more transparent international tax identification system so that taxes are paid where production profits are earned, avoiding the toxic practice of transfer pricing through tax haven countries (14). In doing so it might also begin to stem the illicit capital flows, especially from Africa, which in the past 40 years has topped $1.4 trillion, more than all of the aid and debt cancellation funds that have gone to the continent, and much of it due to transnational corporate practices, and not simply criminality or corruption (15). There is a modicum of self-interest in this, as some estimates calculate that Canada is absorbing huge tax losses on the more than $160 billion in Canadian income parked mostly in offshore Caribbean branches of Canadian chartered banks (16).
Actions oriented towards such economic and taxation reforms by Canada would move us away from a charity model of intermittent, donor-driven aid to a structural model of global social solidarity and an equitable economic empowerment.
In sum, Canada in preparing for a post-2015 world could:
- Continue but strengthen our commitments to maternal/child health
- Promote our publicly-funded universal health system as an important model for expanding UHC
- Ensure that health concerns (present and future) are fully protected in trade and investment treaties
- Aid for trade – if trade treaties actually disproportionately benefit poorer people and countries
- Aid for tax reform – to build the transparent and progressive tax systems developing countries need to build effective states and mobilize domestic revenues for health
- Join and promote global systems of taxation to prevent tax evasion and illicit capital flight
- Work with African and Latin American countries to improve their royalties on extractive industries, notably mining.
10. Friel S., Gleeson D., Thow A-M., Labonté R., Stuckler D., Kay A. and Snowdown W. A new generation of trade policy: potential risks to diet-related health from the trans pacific partnership agreement. Globalization and Health 2013, 9(46): 1-7.
11. See: Government of Canada, 2013. Global Markets Action Plan. http://www.international.gc.ca/global-markets-marches-mondiaux/
15. See: African Development Bank and Global Financial Integrity, 2013. Illicit financial flows and the problem of net resource transfers from Africa: 1980-2009. [pdf] Available at: http://www.gfintegrity.org/storage/gfip/documents/reports/AfricaNetResources/gfi_afdb_iffs_and_the_problem_of_net_resource_transfers_from_africa_1980-2009-web.pdf.
16. See: http://www.taxfairness.ca
Based on two plenary presentations at the 2013 Canadian Conference on Global Health, Ottawa, Canada, October 28-29.