Trade Liberalization and Its Impacts on Alcohol Policy

Globalization can appear to be an inevitable combination of economic trends. In fact, the kind of globalization that threatens to undermine alcohol control policies results from a series of deliberate public policy choices that put trade promotion ahead of other values. To implement this particular kind of globalization takes a very powerful set of rules backed up by a strong enforcement regime. The formation of the World Trade Organization (WTO) in 1994 introduced the first set of legally binding multilateral trade rules applicable to most of the world's countries. Unlike in the pre-WTO era, governments can no longer stay in the multilateral trade club while opting out of any of the major agreements or stopping a dispute from proceeding against them.

WTO agreements are promoted as a way to abolish protectionism, a practice usually equated with putting up trade barriers, such as high tariffs, against the entry of foreign goods. Regulations, taxes, guidelines, administrative procedures, and subsidies are just some examples of the broad array of government policies that can now be challenged under the WTO agreements. Anything a government does that discriminates against foreign products--even if no discrimination is intended--can run afoul of these rules. Increasing market access and suppressing discrimination against imports are basic principles in WTO agreements, whereas non-commercial values like public health appear only as exceptions.

The WTO has evolved beyond the coverage of goods and now includes the service sector, which represents up to 75 percent of the Gross Domestic Product of developed economies. This expansion is particularly significant for alcohol policy, since governments, while rarely engaged in the production of alcohol, typically regulate and deliver many alcohol-related services. WTO rules on services intrude far more explicitly into public policy-making than those dealing with goods. They target not only restrictions on imports, but also any domestic regulation that limits commercial activity. Current negotiations to expand the WTO agreement on services include proposals to dramatically curtail government authority over the sale and distribution of alcohol.

The promise of trade liberalization under the WTO is to reduce costs, increase choice, and expand the availability of consumer products in its 143 member countries. However, to varying extents members also pursue policies to restrict choice, reduce the availability, and increase the price of alcohol, with a view to reducing consumption--particularly among young people. The tension between these conflicting goals manifests itself frequently at the WTO. Restrictive alcohol policies are challenged through a number of avenues, including through the WTO membership qualifying processes, through periodic reviews of their domestic policies once they have joined, through complaints based on existing agreements taken to the WTO's binding dispute process, and through the negotiations to expand the obligations under which countries are bound as WTO members. Those involved in promoting public health are beginning to recognize that theWTO is now a key forum for determining the future of alcohol policy.

Government Intervention in Alcohol Markets

Governments worldwide take a range of measures that treat all types of alcoholic drinks differently from other, non-alcoholic beverages, and there are strong public health arguments for such interventions in alcohol markets. Although alcohol consumption is readily linked with problems like drunk driving and liver damage, its varied effects and relative significance as a health problem are not common knowledge. The World Health Organization (WHO) reports that on a global scale, alcohol-related diseases are more of a burden than those associated with tobacco and illegal drugs. J. E. Asvall, the Regional Director for the WHO in Europe, observed that"[f]rom the public health perspective it is becoming increasingly clearthat alcohol consumption plays a major role in morbidity and mortality on a world scale. For a long time epidemiologists and public health experts underestimated the impact of alcohol on health." ¹

Consumed in large amounts over a short period of time, alcohol can be an immediate killer. There is no...