Free trade and obesity

Growing evidence that free trade is bad for human health

According to the World Health Organisation, overweight and obesity are BMIs of equal to or greater than 25 and 30, respectively (for adults). It is estimated that in 2016 about 39 per cent of those who are 18 year-old or over the age of 18 were overweight, and about 19 per cent of the world adult population were obese. Needless to say, obesity creates various health problems such as diabetes and cardiovascular diseases. Thus it is important to study the causes of obesity and find out how to prevent it.

Liberalisation means lower standards

It seems to me that market liberalisation and relating deregulation lead to a situation where food manufacturers (especially big corporations) can take advantage of looser regulations about food safety and the environment to sell their products at unfairly competitive and deflated prices.

In many cases, their products are cheap and unhealthy because their products are manufactured under dubious conditions: they exploit cheap labour and use bad chemical substances (which could be harmful to humans) to cut costs; also, their products are high in calories, which appeals to consumers.

As their products are cheap, consumer-friendly and high in calories, consumers buy the unhealthy foods. This could cause them to be overweight. Thus it could be argued that market liberalisation is directly/indirectly linked to obesity.

Recent research has helped me to realise that not only market liberalisation but also trade liberalisation can be a direct/indirect cause of the obesity problem.

Canada and Mexico under NAFTA

For instance, I just pick up the North American Free Trade Agreement (NAFTA); it is well-known that more than 700,000 American jobs have been taken away to foreign countries under the FTA. In addition, NAFTA has been damaging not only the US but also other member states. More importantly, the study showed that the FTA is bad for human health as well.

After NAFTA came into effect, American fast-food/confectionery companies flooded the Mexican or Canadian market with unhealthy foods. The Mexican and Canadian consumers chose to buy them due in large part to their deflated prices. Also the Canadian government agreed to phase out a 5 per cent tariff on high-fructose corn syrups (but they maintained protections on sugar- and beet-based syrup). As tariffs on food ingredients reduced, the prices of those ingredients decreased, which encouraged food manufacturers to use more of them. In Canada, the corn syrup consumption was 21.2 calories per day in 1994, and the figure soared to 62.9 in 1998. It seems to me that it’s obvious that when multinational corporations such as Coca-Cola make a huge investment in advertising, consumers easily get attracted because their products are cheap and customer-friendly. (I note that the reason why their products are cheap is because they exploit cheap labour to manufacture their goods; in general multinationals move their factories to those countries where both average wages and labour standards are low.)

According to Joseph Glauber, a senior research fellow at the International Food Policy Research Institute, the research on how foreign direct investment affects consumption patterns was in its early days. He added:

This connection between trade and nutrition is getting to be a very big question.

I think the effect is probably pretty minor, on the tariff side. But there’s a huge issue with foreign direct investment and advertising, which has become very aggressive. And that’s all a part of trade liberalization.

While Joseph Glauber thought that there was no persuasive evidence that an FTA creates obesity problems, we could never overlook the fact that Mexico has been a dumping ground for unhealthy foods under NAFTA, and that the country’s obesity rate soared to the world’s second highest level.

The Institute for agriculture and trade policy reported that the average daily energy from fat in Mexico climbed from 23.5 per cent to 30.3 during the 1988–1999 period. They pointed out that while per capita consumption of total carbohydrates decreased from 59.7 per cent to 57.5 per cent in the same period, consumption of refined carbohydrates went up 6.3 per cent during the 1984–1998 period. They noted that soda consumption increased 37.2 per cent. Snack food consumption increased from $1.54 billion in 1999 to estimated $1.75 billion in 2001.

The consumption of high-energy beverages soared by more than 100 per cent for adolescents and tripled for adult women during the 1999–2006 period. Under NAFTA, Foreign Direct Investment has been attracted, but we need to carefully examine whether those investments are good or not. The US has made huge (the third largest) investments in the Mexican processed food and beverage industries. In 1985, McDonald’s opened its first store in Mexico, and nowadays it has more than 500 branches in 57 cities. The number of Wal-Mart stores went up from 114 to 561 between 1993 and 2001. In 2005, Wal-Mart had become one of the companies which dominated Mexico’s food retail industry, controlling about 20 per cent of the sector. They added:

Mexico has experienced significant changes in food consumption patterns over the last two decades, followed by a rising obesity epidemic in both children and adults. Mexicans, both rich and poor, and from diverse geographic regions, are consuming more added fats and sugars from snack foods, sodas, and processed dairy and meat products. Their health is suffering in the process.

Nutritional biochemist John White cited studies that show high-fructose corn syrup was similar to sugar, and that NAFTA did not cause the Canadians to consume more HFCS during the 1990s.

However, we should not think that HFCS is the only root cause of obesity; it is argued that a person can become fat if he/she eat too much. (And there are various factors in his/her gaining weight.)

For instance, broiler meat consumption in Canada was 22.1 kilograms per person in 1990, and this figure climbed to 29.5 kg in 2000. This says that in 2000 an average Canadian ate more broiler meat compared to 1990. The point should be the total amount of consumption of foods, and I suspected the total amount could be affected by the advertisements put by multinationals.

Democratic maturity matters

The effectiveness of the ads may differ between countries. It seems that Canada is less vulnerable than Mexico, because Canada’s democracy standard is higher and people and NGOs care about nutrition more. Sometimes they call for the government to ban certain foods or introduce health regulations in order to stop obesity etc.

Moden free trade deals benefit the economic establishment

I have not obtained overwhelming evidence that free trade makes people fat, but I could argue that multinational food manufacturers take advantage of economic globalisation to flood foreign food market with low-quality foods. Especially they target those countries where food safety, environmental and labour standards are not high enough, because they want to maximise their profits at the expense of customers, the environment and their workers.

Early this month, Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) was signed in Chile. This multilateral free trade agreement is not progressive at all; the ISDS mechanism would allow multinational corporations to sue national governments over any governmental regulation that could have negative imapcts on the profits of multinationals. As a result of this, the CPTPP states could not enough regulate working conditions, products and activities of firms especially in terms of food safety, environmental protection and labour law. This is because they would be afraid of being sued and required to pay huge amounts of money in compensation.

This would worsen not only the existing obesity crisis, but many other things such as income inequality and working conditions, benefitting elites, big banks and multinationals and undermining member states’ democracy. Thus progressives must defeat this evil multilateral agreement.