Canadian Health Care Vulnerable to GATS (the WTO's General Agreement on Trade in Services) Attack
Since the original GATS negotiations in the 1990s, Canadian citizens repeatedly have been told that government negotiators will make sure Medicare is immune from the effects of GATS. However, this goal is quickly being shown to be elusive, given the numerous mechanisms GATS includes to extend its coverage over service sectors governments have not chosen to subject to GATS.
Although Canadian Medicare is a federal system, the provinces administer the program and determine the covered benefits package and co-payment schedules...
This bifurcation between national and provincial responsibilities has opened up a possible GATS wedge that could gut the Canadian health care system. In 1999, the government of Alberta introduced legislation allowing private, for-profit facilities to offer overnight care. This proposal poses a GATS threat for two reasons: first, it undermines Canada’s efforts to shield health care completely from the GATS agreement because under GATS, only service sectors that are not explicitly and exclusively reserved for public action can qualify for GATS limited exception for some public services which does not cover services that are provided both by the government and privately. A 1998 WTO background paper noted that, under GATS, countries that have a mix of public and private hospital ownership cannot argue for exemption for their public hospitals from GATS coverage. Also under GATS rules, a signatory government is responsible for the policies and actions of all levels of its government. So if one Canadian province takes an action, the implications extend to all of Canada, as far as GATS treatment. Thus, an experiment with partial privatization in one province would put Canada’s entire public health care system at risk for becoming subject to GATS coverage.
Second, if Canadian health services were subjected to GATS disciplines, any future attempt to expand Canada’s public health care system, or to return from partial privatization to an exclusively public system, would run afoul of GATS rules. Canada would be required to negotiate compensation with all WTO member countries whose service providers are affected to make up for the withdrawn service sector opportunity, making attempts to reverse an experimental privatization prohibitively expensive. These GATS threats have implications for all health care systems that permit private coverage for services beyond the basic benefits packages. Although people may organize and pressure to include additional benefits in the basic benefits package, if the service already is partially or fully privatized, expanding the benefits of a national health system would be susceptible to a GATS challenge. This is why GATS is called a “one-way” agreement: it allows public systems to get more private and profit-driven, but prohibits them from getting more inclusive and public.