In the latest round of the finger-pointing game since the breakdown of the trade talks in Geneva, the WHO emerged as the winner. According to a recent report in BNA's International Trade Daily, the WHO's Commission on Social Determinants of Health blamed trade liberalization for reducing the "capacity of national governments to support public expenditures in health, education and other sectors" in many low-income countries because of their greater reliance on import tariffs for public revenue.
After checking the actual report, I found the argument in the report is not as radical as it sounds:
"Low-income countries often have relatively weak direct tax institutions and mechanisms and a majority of the workforce operating in the informal sector. They have relied in many cases on indirect taxes such as trade tariffs for government income. Economic agreements between rich and poor countries that require tariff reduction can reduce available domestic revenue in low-income countries before alternative streams of finance have been established. Strengthened progressive tax capacity is an important source of public finance and a necessary prerequisite of any further tariff-cutting agreements."
We all know that you can temporarily suspend your TRIPS obligations for public health reasons, but the really interesting question for our fellow trade lawyers is: can a country invoke its public health obligation under the WHO to defend its chaotic tariff regime?
