From Andrew Mitchell and Tania Voon, Implications of the World Trade Organization in Combating Non-Communicable Diseases, on SSRN. From the abstract:
The World Health Organization (WHO) has proposed a number of strategies to combat non-communicable diseases such as cancers, cardiovascular diseases, chronic respiratory diseases, and diabetes, by targeting the risk factors of tobacco use, harmful use of alcohol, and poor diet. A number of the domestic regulatory responses contemplated by the WHO and individual countries have the potential to restrict or distort trade, raising the question whether they are consistent with the obligations imposed on Members of the World Trade Organization (WTO). In this article, we demonstrate that WTO rules do limit Members’ flexibility in implementing public health measures to address these diseases. However, the focus of WTO provisions on preventing discrimination against or between imports and the exceptions incorporated in various WTO agreements leave sufficient scope for Members to design carefully directed measures to achieve genuine public health goals while minimising negative effects on international trade.
And from the paper:
Using WTO Subsidies Disciplines to Combat Unhealthy Food
Enhancing consumer information through labelling and providing price incentives through taxation or related schemes may become all the more important as global food prices rise while the cost of choosing healthy over unhealthy food appears to increase.52 However, WTO rules are also relevant in understanding why the price of certain (often unhealthy) foods is low or falling. While the rest of this article has explored how to ensure that trade‐related health measures comply with WTO law, we now wish to emphasise that WTO disciplines on agricultural and other subsidies may themselves be used to support health policies.
Domestic politics may explain why WTO Members, far from using subsidies as a tool to promote healthy eating habits, have instead often chosen to directly or indirectly subsidise culprits in the fight against non‐communicable diseases53 such as sugar,54 butter,55 and high fructose corn syrup.56 Subsidies are permitted in the WTO, subject to compliance with stringent conditions set out in the Agreement on Subsidies and Countervailing Measures (SCM Agreement) and (in the case of agricultural products) the Agreement on Agriculture.57 The disciplines established in these agreements can and should be brought to bear on massive subsidies of unhealthy food products, particularly where they fall within the categories of export subsidies (contingent on export)58 or import substitution subsidies (contingent on the use of domestic over imported goods).59 In addition to undermining health policy goals, these subsidies are often counterproductive from an economic perspective, shielding non‐competitive domestic industries from foreign competition, while simultaneously driving those foreign competitors (frequently from developing countries) out of business.
This kind of policy has always aggravated me. Governments often take a variety of actions to promote public health. But then they undermine these actions by using subsidies that worsen public health, and also lead to trade disputes. One of the best ways to promote public health would be to stop using subsidies that encourage the consumption of unhealthy products, which would have the added benefit of reducing trade friction.