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1

Sources: Baumberg B. & Anderson P.

Osterberg E.

Cressy P. & Fortescue J.

Reviewed by Areekul Puangsuwan

Presented in CAS Journal Club 09/01/10

Effects of Free Trade on Alcohol and Public Health

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2

Introduction

1. Need for greater clarity about the

effects

2. Second threats: “chilling effects”

3. Scope of study: GATT & GATS

4. Method of the study: Search from

web of sciences and Journals

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dResults

WTO as a potential threat1. Exceptions interpreted narrowly

- GATT & GATS do not prevent the adoption or enforcement of

measures if those measures are necessary to protect human health

- Countries find themselves held to commitments they never knew

2. Burden to proof is substantial and difficult

- Alternatives will not be equally effective

- Not disguised restriction on trade or “unjustifiable

discrimination”

- involve in highly unpredictable decisions

3. Compensatory commitments

- Countries can scale back their commitments but this involves

compensation elsewhere > unaffordable for poorer countries 3

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Clarifying effects on 3 typology policies

1. Protectionist policies: not permissible.

So, when lifted

- Likely to increase consumption particularly in

youth and women via a combination of reduced

price (comparative advantage and productivity)

and marketing

- Likely to lead to increased alcohol related harms

Results

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d2. Partly protectionist, partly health policies:

at risk

- Political pressure> complex delicate balance > messy

compromises > having multiple aims + varying

degrees of ineffectiveness

3. Health policies: likely to be defended

- Still subject to necessity test > certain highly trade

restrictive policies are unlikely to pass.

- Quantitative restrictions

- Purely health-motivated policy can be confident of

being upheld./ unaffected.

- How can countries demonstrate?

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d“Regulatory Chill”

• Companies exaggerate claims over trade

treaties

• Danger in a mistaken pessimism

bordering panic

• Policy makers needlessly avoid effective

policies

• Pure health ground + trade friendly

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dConclusions

1. FCAP

> support from international community

> help manage relationship between trade and alcohol

2. Rebuttable presumption of legitimacy under international law

3. Carving alcohol out of trade agreements > strongest way of defending.

4. Avoid making any further commitments related to alcohol

5. Introduce stringent alcohol policies to counteract the effects.

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dCommentaries

From Osterberg E.

- WTO is not an obstacle > EU case: Cannot apply

too different excise duty rates on like products

- WTO is not an org defending health-motivated al

policies

- Gov. are not taking advantage of al control

opportunity

- Effective al policies have nothing to do with

protectionism.

8

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dComments from the Industry

• Gov are not prevented from introducing measures

• Real danger of missing unseen consumption of

locally produced drinks.

• Internationally traded al are less likely to be

misused as they carry high price tag.

• There’re provisions for exceptions in GATT and

GATS

* No effect

* Unnecessary