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US and EU Free Trade Agreements and implementation of policies to control tobacco, alcohol, and unhealthy food and drinks: A quasi-experimental analysis [1]

['Pepita Barlow', 'Department Of Health Policy', 'London School Of Economics', 'Political Science', 'London', 'United Kingdom', 'Luke N. Allen', 'Department Of Clinical Research', 'London School Of Hygiene', 'Tropical Medicine']

Date: 2023-01

Abstract Background Identifying and tackling the factors that undermine regulation of unhealthy commodities is an essential component of effective noncommunicable disease (NCD) prevention. Unhealthy commodity producers may use rules in US and EU Free Trade Agreements (FTAs) to challenge policies targeting their products. We aimed to test whether there was a statistical relationship between US and EU FTA participation and reduced implementation of WHO-recommended policies. Methods and findings We performed a statistical analysis assessing the probability of at least partially implementing 10 tobacco, alcohol, and unhealthy food and drink policies in 127 countries in 2014, 2016, and 2019. We assessed differences in implementation of these policies in countries with and without US/EU FTAs. We used matching to conduct 48 covariate-adjusted quasi-experimental comparisons across 27 matched US/EU FTA members (87 country-years) and performed additional analyses and robustness checks to assess alternative explanations for our results. Out of our 48 tests, 19% (9/48) identified a statistically significant decrease in the predicted probability of at least partially implementing the unhealthy commodity policy in question, while 2% (1/48) showed an increase. However, there was marked heterogeneity across policies. At the level of individual policies, US FTA participation was associated with a 37% reduction (95%CI: −0.51 to −0.22) in the probability of fully implementing graphic tobacco warning policies, and a 53% reduction (95%CI: −0.63 to −0.43) in the probability of at least partially implementing smoke-free place policies. EU FTA participation was associated with a 28% reduction (95%CI: −0.45 to −0.10) in the probability of fully implementing graphic tobacco warning policies, and a 25% reduction (95%CI: −0.47 to −0.03) in the probability of fully implementing restrictions on child marketing of unhealthy food and drinks. There was a positive association with implementing fat limits and bans, but this was not robust. Associations with other outcomes were not significant. The main limitations included residual confounding, limited ability to discern precise mechanisms of influence, and potentially limited generalisability to other FTAs. Conclusions US and EU FTA participation may reduce the probability of implementing WHO-recommended tobacco and child food marketing policies by between a quarter and a half—depending on the FTA and outcome in question. Governments negotiating or participating in US/EU FTAs may need to establish robust health protections and mitigation strategies to achieve their NCD mortality reduction targets.

Author summary Why was this study done? Identifying and attending to the factors that inhibit the proper regulation of unhealthy commodities is a pressing priority for governments seeking to accelerate progress towards reducing noncommunicable diseases (NCDs).

US and EU Free Trade Agreements (FTAs) may play a significant role in stalling policy progress by incentivising and empowering unhealthy commodity producers to challenge policies targeting their products in FTA partner countries.

However, these agreements also acknowledge governments’ right to regulate and protect public health, and previous studies were unable to establish whether countries with US/EU FTAs are typically less successful at implementing unhealthy commodity policies. What did the researchers do and find? We conducted a global statistical analysis assessing the relationship between US and EU FTA participation and implementation of WHO-recommended policies targeting unhealthy commodities.

Our large-scale quantitative approach allows for the incorporation of data from many more countries and time periods than previous approaches while addressing key alternative explanations in our main models and >30 additional analyses and robustness checks.

We identified a substantial reduction in the predicted probability of implementing select WHO-recommended policies in countries participating in US FTAs and EU FTAs, with the probability of implementing tobacco and child food marketing restrictions reducing by between a quarter and a half depending on the FTA and regulation in question; other associations were not significant. What do these findings mean? Our findings indicate that participating in US and EU FTAs is associated with reduced implementation of select unhealthy commodity policies that are crucial to achieving global targets to prevent and reduce NCD-related mortality, morbidity, and associated treatment costs.

For countries currently negotiating US/EU FTAs, there is now a potential opportunity to ensure these agreements do not empower unhealthy commodity producers to challenge unhealthy commodity policies and instead empower governments to accelerate NCD policy progress.

For countries already participating in US/EU FTAs, governments will need to ensure their policies are not unduly influenced by vested interests that are often concealed in technical discussions about trade rules.

Citation: Barlow P, Allen LN (2023) US and EU Free Trade Agreements and implementation of policies to control tobacco, alcohol, and unhealthy food and drinks: A quasi-experimental analysis. PLoS Med 20(1): e1004147. https://doi.org/10.1371/journal.pmed.1004147 Academic Editor: Jean Adams, University of Cambridge, UNITED KINGDOM Received: August 3, 2022; Accepted: November 22, 2022; Published: January 5, 2023 Copyright: © 2023 Barlow, Allen. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Data Availability: All data files are available from the Harvard Dataverse database: Barlow, Pepita, 2022, "Replication Data for: US and EU Free Trade Agreements and implementation of policies to control tobacco, alcohol, and unhealthy food and drink: a quasi-experimental analysis", https://doi.org/10.7910/DVN/THBIDB, Harvard Dataverse. Funding: The authors received no specific funding for this work. Competing interests: The authors have declared that no competing interests exist. Abbreviations: AME, average marginal effect; BIT, Bilateral Investment Treaty; CP-TPP, Comprehensive and Progressive Agreement for Trans-Pacific Partnership; FTA, Free Trade Agreement; NCD, noncommunicable disease; SDG, Sustainable Development Goal

Methods Data We assessed the relationship between US/EU FTA participation and the achievement of (i) partial or full implementation; and (ii) full implementation of policies targeting tobacco, alcohol, and unhealthy food and drinks in 127 countries with available covariate data in 2014, 2016, and 2019. We analysed 10 categories of WHO-recommended policies including taxes and restrictions on marketing, sales, and consumption, as described in Box 2. Implementation of these policies is assessed by WHO using regular NCD Country Capacity Surveys [29]. Cross-sectional implementation survey responses were published by WHO and systematically coded by Allen and colleagues [4,30]. We combined this information with US/EU FTA participation data from the Design of Trade Agreements Database and covariate data from multiple sources (see Table A in S1 Supporting Information for full list and rationale) [17]. All economic data were adjusted for inflation and purchasing power. Box 2. Policies targeting the marketing, composition, and consumption of unhealthy commodities. Tobacco Tobacco taxes

Smoke-free place policies

Graphic warnings on cigarette packages

Tobacco advertising bans Alcohol Alcohol sales or advertising restrictions

Alcohol taxes Unhealthy food and nonalcoholic beverages Legislation implementing the International Code of Marketing of Breastmilk Substitutes.

Policies to reduce salt/ sodium consumption

Policies to limit saturated fatty acids and eliminate trans-fats

Policies targeting the marketing of foods and nonalcoholic beverages to children Notes: All categories listed above correspond to those originally captured in WHO country surveys and categorised therein, with the exception of alcohol sales and advertising restrictions. We grouped these into a single category as very few countries had implemented these policies and we sought to ensure there was variation in implementation across FTA partners. For each policy above, we create 2 dichotomous indicators capturing at least partial (i.e., partial or full) implementation of the regulation, and full implementation of the regulation. Statistical models Following a published protocol [31], we used matching—a quasi-experimental approach—to help account for nonrandom assignment into FTAs. Matching preprocesses the data by identifying a subset of comparable countries from the overall pool of observations [32–34]. Further analysis is then performed using only comparable matched sets. Unlike regression adjustment, matching can increase the internal validity of causal estimates by increasing the comparability of the “control group” of countries that did not participate in US or EU FTA, while increasing the transparency of any residual differences in covariate values and the precise counterfactual contrasts used to estimate causal effects [32,33]. We examined the performance of multiple available matching algorithms and measures of comparability between countries, and present results from the model with the largest number of successfully matched countries and the best performance on covariate balance tests, on average, in models assessing both US FTAs and EU FTAs (see Appendix A in S1 Supporting Information). Our final models used full matching on the Mahalanobis distance, a composite measure of the differences in the characteristics of countries with and without US/EU FTAs [32]. The full matching algorithm places each country with (or without) US/EU FTAs into subsets with at least 1 country without (or with) a US/EU FTA with the smallest Mahalanobis distance(s) from the country with the US/EU FTA [35]. The algorithm further ensures that the final sum of the Mahalanobis distances across all matched sets is minimised. To improve comparability, we restricted comparisons to observations in the same year and WTO membership status and limited differences in GDP per capita between units with and without US/EU FTAs to USD10,000. This identified matches for up to n = 15 countries with US FTAs (45 country-years) and n = 12 successful matches (36 country-years) for EU FTAs. We first estimated logistic regression models using unmatched data with controls for covariates, which may influence US or EU FTA participation and unhealthy commodity policies (see Appendix A in S1 Supporting Information). We then generated the matched subsets using these same covariates to measure differences in unit characteristics (summarised in the Mahalanobis distance). We then performed a series of covariate balance tests to assess the performance of our chosen matching algorithm in reducing differences in the characteristics of countries with and without US or EU FTAs, before and after matching (see Appendix A and Table C in S1 Supporting Information). Next, we reestimated our regression models with controls for any covariates that remain imbalanced in the matched subsets, as indicated by an absolute standardised difference in means across countries with/without US/EU FTAs larger than 0.1. Our baseline regression models are as follows: Equation 1. US agreements. Equation 2. EU agreements. where Implementation it is one of the binary indicators of partial/full implementation (10 indicators) or full implementation (10 indicators) of a particular policy in country i in year t, and B 0 is the intercept. We created 2 dichotomous indicators of participating in either a US or EU FTA: USFTA it-1 in Eq 1 captures whether country i participated in a US FTA (1) or not (0) in year t-1, and EUFTA it-1 in Eq 2 captures whether country i participated in an EU FTA (1) or not (0) in year t-1. X it-1 is a vector of controls in year t-1 with coefficients in the vector B 2. In both models, we control for democratisation, GDP per capita, the share of the population of secondary education age that is enrolled in secondary education, implementation of non-trade business policies, WTO participation, geographic region (converted into a series of region dummies), and international political integration (or “political globalisation”). We further control for participation in FTAs with countries other than US/EU where the world’s 10 largest producers of tobacco, alcohol, and unhealthy food and drinks are headquartered (see Tables A and B in Supporting Information for full list and measurement of these covariates). Wave t in Eqs 1 and 2 is a control for the wave of data collection and accounts for unobserved factors that influence implementation, vary time periods, and are common across all countries. e it in Eqs 1 and 2 is the error term. We estimate block-bootstrapped standard errors, which approximate cluster robust standard errors [36–38]. Our bootstrap procedure samples matched strata from the matched sample, where each strata ID contains at least 1 country with a US or EU FTA and at least 1 country without a US or EU FTA in a given year. Finally, we use the estimated models to calculate average marginal effects (AMEs): differences in the predicted probability of implementation according to US/EU FTA participation status [39]. All models were estimated using R version 4.1.3. This study is reported as per the Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) guideline (S1 STROBE Checklist).

Discussion Our analysis has shown that US and EU FTA participation is associated with a substantial reduction in the predicted probability of implementing several WHO-recommended NCD policies that target unhealthy commodities. Approximately 19% (9/48) of tests showed a statistically significant decrease in the predicted probability of at least partial unhealthy commodity policy implementation, while 2% (1/48) showed an increase, and the latter was not robust in additional analyses. On average, US FTA participation and EU FTA participation were associated with a 5% decline in the predicted probability of at least partially implementing the unhealthy commodity policy in question, but these averages were not statistically significant. However, we identified substantial changes in the probability of implementation for some policies. Specifically, US FTA participation was associated with a 37% reduction in the predicted probability of fully implementing graphic tobacco warning policies and a 53% reduction in the probability of at least partially implementing smoke-free place policies. The probability of fully implementing of smoke-free place policies was also 24% lower in countries with US FTAs. EU FTA participation was similarly associated with a reduced probability of implementing select policies, including a 28% reduction in the probability of fully implementing graphic tobacco warning policies and a 25% reduction in the probability of fully implementing restrictions on child marketing of unhealthy food and drinks. These findings were consistent in a large number of additional analyses and robustness checks. Our study provides new insight into the relationship between US/EU FTA participation and (non)implementation of WHO-backed policies that seek to restrict the marketing, sale, and consumption of unhealthy commodities. US/EU FTAs acknowledge that governments have a legitimate right to regulate to protect public health. Furthermore, high-profile trade and investment disputes were raised against Australia and Uruguay’s tobacco packaging legislation, but the policies were ultimately deemed consistent with the treaties cited in each case [40,41]. While health protections and high-profile examples of public health policies being upheld in trade disputes might be expected to bolster governments’ ability to regulate, our study suggests that this is not the case for US/EU FTA participants. Instead, our analysis corroborates previous concerns that US/EU FTAs incentivise and/or enable companies to pressure governments to delay proposed policies or implement alternative measures that do not directly impact their products [12,42]. Notably, no formal disputes related to WHO-recommended NCD policies were initiated during the time period of our study. However, a number of countries rescinded policies relating to tobacco and child food marketing restrictions [29]. These phenomena, together with our results, suggest that tobacco, processed food, and soft drink producers may be using relatively informal channels to exert pressure via US/EU FTAs, for example, via direct lobbying, threatening trade disputes, or using opportunities for input established in regulatory cooperation clauses. This possibility is bolstered by findings from prior small-N studies that have identified instances when unhealthy commodity producers used, or appeared to use, trade rules to exert pressure on policy-makers to change policies affecting their products, including those which appeared to be influenced in our study: tobacco legislation and restrictions to the marketing of unhealthy foods to children [23,43]. It remains possible, however, that the existence of “behind the border” restrictions on policy within US/EU FTAs is sufficient to deter policy-makers from proposing regulations altogether, due to fears an industry trade challenges and disputes. Our study has important limitations. Our results should not be interpreted as definitively causal, as our quasi-experimental comparisons have important underlying assumptions. One is that the associations we identify are unconfounded after matching and incorporating regression controls [32]. Data limitations also prevented us from estimating longitudinal models assessing within-country changes in implementation before and after joining US/EU FTAs. However, matching on observed covariates also matches on or controls for unobserved covariates insofar as they are correlated with the observed in our models [32]. Furthermore, our results were robust in sensitivity analyses assessing potential alternative explanations. There may nevertheless be additional unobserved sources of confounding, leading to the masking of true effects or finding spurious associations. Residual imbalances in political integration and democracy after matching may also help explain the results for EU FTAs. The small sample size also limited our ability to assess effect heterogeneity, for example, by country-income level or FTA design. Finally, our study was not designed to isolate the specific mechanism through which US/EU FTAs limit unhealthy commodity policies. There are several possible processes, including stakeholder input via regulatory cooperation processes established in US/EU FTAs and relatively informal dispute threats. Further research is needed to evaluate whether our results apply to other FTAs, and whether domestic political prioritisation of unhealthy commodity policies may counteract any influence of US/EU FTAs and associated industry pressure. Our results also indicate a need to investigate sources of heterogeneity in the associations we identified. For example, we identified variation in the relationship of US/EU FTA participation and the implementation of similar policies (e.g., advertising or sales restrictions) across different commodities. This variation might be explained by a wide range of factors, such as differences in the degree of contentiousness of a particular policy where it targets different commodities, and the novelty of the policy and existing implementation levels prior to our study period. We also identified variation in the association between FTA participation and the implementation of different policies within the same commodity category. This may be explained, for example, by differences in the ability of industry actors to craft arguments that relate different policies to FTA rules, and differences in the visibility of economic benefits of the policies in addition to health benefits. Our findings have important implications for policy-makers seeking to accelerate progress towards regulating unhealthy commodities and achieving global targets to reduce NCD mortality. Our results suggest that FTAs currently under negotiation may constrain efforts to achieve NCD-related global health targets in partner countries. For example, several US and EU FTAs are now under negotiation, including a US–Kenya agreement; UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which was heavily influenced by the US (UK-CPTPP); a potential future US–UK deal; and EU agreements with New Zealand, the Philippines, Indonesia, China, and Australia [44,45]. FTAs exhibit variation in their design, and these differences will need to be considered when appraising the potential impact of future FTAs. Governments negotiating new deals now have a potential opportunity to ensure new FTAs are drafted in ways that do not empower unhealthy commodity producers to challenge tobacco and junk food marketing policies through careful drafting at the negotiation stage. Policy-makers can, for example, ensure that new FTAs empower governments to protect populations from their harms. There are several ways to achieve this, for example, by excluding investor–state dispute settlement mechanisms from agreements to prevent disputes or dispute threats citing these clauses, limiting unhealthy commodity producers’ access to proposals for polices that regulate their products in regulatory cooperation clauses, and limiting the scope and definition of key investor protections that industry might appeal to [19]. WHO has a potential role to play in providing technical support to countries as they negotiate trade agreements and in providing a forum for Member States to share their experiences and highlight commonly used corporate tactics. Indeed, Member States specifically called on WHO to perform this role at the 2019 European workshop on strengthening NCD implementation research capacity, citing industry opposition as a central barrier to NCD policy implementation [46]. Our findings also have implications for existing US/EU FTA participants. Countries with these FTAs appear to encounter difficulties in regulating tobacco and child food marketing. However, industry references to clauses in US/EU FTAs can be invalid and may constitute attempts to limit policies affecting their products by appealing to aspects of trade law that are poorly understood by policy-makers. Governments should be aware of this potential conflation of vested interests with the interpretation of FTA clauses. Governments may also be better able to implement unhealthy commodity policies despite opposition from industry where they have access to legal experts that can identify invalid trade-related claims at an early stage, and where they minimise industry involvement in policy-making processes via regulatory cooperation and lobbying. Finally, the risk of industry threats might be minimised by strategically designing unhealthy commodity policies in ways that accord with US/EU FTA rules while maximising efficacy. Whether countries are seeking to mitigate impacts of existing US/EU FTAs or negotiating new agreements, effective cross-government cooperation between legal, trade, and public health officials will be essential to accelerate progress to implement unhealthy commodity policies.

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