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The GATS and South Africa's National Health Act: A Cautionary Tale

Abstract: 
South Africa’s new flagship health legislation, designed to combat a daunting and urgent public health crisis, conflicts with legally binding commitments the former apartheid regime negotiated under the World Trade Organization’s General Agreement on Trade in Services (GATS). This trade treaty conflict threatens to undermine the much-needed legislation and, if left unresolved, would make meeting the health needs of the majority of the population far more difficult. South Africa has several options for resolving this conflict in favour of its health policy imperatives, but each entails risk. South Africa’s dilemma should serve as a world-wide warning that health policy-makers, governments and citizens need to be far more attentive to negotiations that are now underway in Geneva to expand the reach of the GATS. South Africa’s National Health Act (NHA) aims to remedy past injustices by creating a more uniform and egalitarian national health care system. It is the current government’s chief legislative response to continuing health care challenges in a country where the social and economic costs of the worsening HIV-AIDS pandemic have greatly exacerbated the structural problems inherited from the apartheid era. Scarce health resources are still disproportionately directed to rich, urban, and white citizens. The General Agreement on Trade in Services (GATS) is no ordinary trade treaty. It is exceptionally complex and broad in scope. It aims to expand international commerce by restricting government measures that impede the ability of foreign companies and investors to profit by supplying services, including health services. Once a national government agrees to cover a particular service sector under the GATS, this “specific commitment” binds all future governments, under threat of punitive trade sanctions. This is the difficult situation in which the current South African government finds itself with regard to its health legislation. In 1994, South African negotiators made GATS commitments covering a huge swath of the country’s health services – including almost all human health services delivered outside of hospitals by doctors, dentists, nurses, midwives and other health professionals – although trade officials have consistently denied it. The conflicts between South Africa’s health legislation and the international services treaty are substantial. In general, public planning policies that allocate health resources more equitably between urban and rural areas, between rich and poor people, and between public and private sectors conflict with the GATS prohibitions against limiting the numbers or activities of private sector service providers. Community-based control and decision-making, local training and technology transfer options, directed health care subsidies and incentives, and black economic empowerment policies are all at risk. The approaches embodied in South Africa’s current health policies and its GATS commitments are incompatible. The government can choose either to conform to legally binding, but illegitimate, treaty commitments made by apartheid-era negotiators, or it can implement the NHA and related policies to try to achieve a more equitable health care system. The existing inequities within the health care system are in need of urgent reform. There is also an overarching responsibility, enshrined in South Africa’s constitution, for the state to protect health and other basic human rights. Accordingly, the morally and constitutionally valid way for the government to resolve these conflicts is to bring the country’s GATS Instead of the current negotiations to broaden and deepen GATS coverage, there needs to be an assessment of the treaty’s defects and joint international action to create more democratic international governance frameworks.
Author(s): 
Scott Sinclair
Publication Information: 
MSP Occasional Paper No.11
Publication Date: 
2006
Publication Type: 
Occasional Paper