Published on Wednesday, March 28, 2001 in the Toronto Star World Trade Organization Targets Canadian Health Care System by Stuart Laidlaw
Despite its failure to get a mandate in Seattle, the World Trade Organization has been progressing with free trade talks in Geneva for more than a year.
The talks, required to start by 2000 under past trade deals, have been held with very little fanfare, behind closed doors and with little input from those affected.
This week, three more days of talks will take place - again in Geneva, again behind closed doors and again without input from those affected.
And make no mistake about it: health care will be on the table.
Ottawa, of course, has vigorously claimed otherwise. It has, after all, invoked a feature of existing world trade deals allowing countries to specifically exempt parts of their economies from international free trade rules. On the face of it, this would seem to protect our cherished health care services from foreign and private incursion.
A closer look, however, reveals several concerns.
First off, both the U.S. and Europe have said they will be demanding an end to such exemptions. If they are successful - and these two working together make a powerful team - Canada's protection will be gone. Canada's own bargaining position at these talks - demanding the right to export health care while not allowing any imports - dangerously undermines our credibility in arguing to keep health care off the table.
But even if the U.S. and Europe are not successful, and even if we can successfully negotiate our import-banning, export-pushing trade position, there is still plenty of reason to worry. That's because, while health care itself is exempted, much of what makes it up is not.
Take public health insurance. Canada has registered health insurance at the World Trade Organization as a financial service, leaving the very heart of medicare vulnerable to trade deals requiring Canada to open the field to foreign and private investors.
You would hope that this classification applies only to the private health insurance plans many of us enjoy at work to cover dental care or medication, but there's nothing in Canada's WTO commitments to spell that out. It just says "health insurance," leaving it up to the WTO to define for us.
There's more. The Canadian Centre for Policy Alternatives - echoing sentiments by more conservative trade experts such as John Kirton of the University of Toronto - argues that Canada could see much of its medicare system whittled away under the WTO's General Agreement on Trade in Services.
Services such as labs, food services, janitorial services, accounting, data processing, telecommunications (such as Ontario's new phone-a-nurse service) and even hospital administration in the form of management consulting are already under the purview of the WTO's agreement on trade in services.
A foreign company could argue that it is not trying to tell Canada how to run its health-care system, but just wants a shot at managing parts of it. If the WTO agrees - and it tends to favour free market arguments - we would be forced to allow private companies into our health-care system.
Not that private companies aren't already in the health business in Canada - which further weakens the government's assertion that medicare is safe from the WTO.
Here's how: The WTO allows governments to exempt any service provided "in the exercise of government authority," as long as such services are not also available commercially.
In other words, if a service is exclusively provided by the government, it is exempt. But if that service is provided through a mix of both government and private interests, it is open to the full force of the WTO.
Health care is such a service. The government, through medicare, obviously plays a huge role. But much of the health-care system is, in fact, privately run. Doctors' offices operate as private businesses. So do the labs in many hospitals, after-hours clinics, dental offices, homecare providers and nursing homes. Even the hospitals themselves are often private, non-profit corporations. This makes our health-care system a mixed private-public system, and therefore subject to WTO rules.
Ottawa's trade negotiators have characterized such concerns as "hypothetical," and doubt any such challenges would ever materialize.
That is folly, and we need only look as far as the recent death of the Auto Pact to see the threat to health care.
The 35-year-old pact regulating the manufacturing of cars in North America was struck down by the WTO last year under its General Agreement on Trade in Services, the deal being refined and expanded this week in Geneva.
The Auto Pact required that the Big Three automakers make as many cars in Canada as they sold. Japan and Europe successfully argued before the WTO that the deal actually regulated the marketing of cars, not the manufacture.
And because marketing is a service, the Auto Pact fell under the General Agreement on Trade in Services, which requires that countries treat foreign companies the same way they treat domestic companies. That forced Canada to lift the tariff on Japanese and European imports.
If the World Trade Organization is willing to stretch the coverage of its service deal to include auto manufacturing, you can bet it will be willing to bring Canada's health-care system under its umbrella, too.
Brave words by our negotiators and doubts that it will ever happen are simply not enough.
Four weeks ago in this space, John Core, former head of the milk marketing board, urged farmers to keep a close eye on the agricultural talks in Geneva to ensure that Ottawa's negotiators stick to their commitments to protect Canadian farmers.
"It will not be acceptable at the end of the talks for our negotiators to say, `We tried,'" he wrote.
It's a warning we all should heed.
Stuart Laidlaw is a member of The Star's editorial board.