FTA and Public Health
Better regulation, not lower economic freedom
While there was general celebration after India and the UK signed a Free Trade Agreement, there was an interesting op-ed in The Hindu about how the FTA will be a poor deal for India’s public health. The crux of it is that the Indian market will now be flooded with unhealthy UK products, which will harm the public health in India and thus, go on to put a warning label on this and future FTAs.
From the op-ed:
However, the FTA could pose a public health challenge for India. It will allow tariff-free entry — and thus lower prices — for U.K.-made food products such as biscuits, chocolates and soft drinks in India, many of which would fit into the categorisation of High Fat, Sugar and Salt (HFSS), posing grave long-term health risks. Cheaper prices supplemented by the expected aggressive marketing and advertising campaigns could prove harmful from the point of view of the health of citizens.
The op-ed then goes onto say that the UK itself has good regulation about these products and is therefore not a big concern in that country, whereas India does not. This is the part of the op-ed to which I think we should pay attention.
India’s current regulation
In India, the issue of a mandatory FOPNL (Front Of Pack Nutrition Labeling) is pending for want of a decision on the right type of labels and amendments under the Food Safety and Standards (Labelling and Display) Regulations, 2020. There is a demand for warning labels for high fat, sugar & salt (HFSS) content, the authorities are leaning towards using a simple star rating, which might not be as effective. While that tussle of what the current method is going on, there is a vacuum in regulation.
The right government intervention
In one of their concluding paragraphs, they write:
Trade deals and FTAs are likely to be signed with some more countries. They could be good for the economy, but from the point of view of public health they could prove to be the Trojan horses of non-communicable diseases, unless sufficient safe-guards are implemented.
The market failure with junk food, which can pose a threat to public health, is that of information asymmetry. While ignoring the message about the potential risk of FTAs, the message about the urgent need for updation of India’s food regulation should be taken seriously. This should be seen as an excellent opportunity to import not just nice cookies from the UK, but also some parts of their regulation on food labeling and safety standards. The solution is not to limit choice - an FTA that can give cheaper access to a variety of foods is a good thing. Not everyone will binge eat junk food and for the vast majority, greater choice at lower prices is a good thing. What we need though is better regulation and enforcement on nutrition labeling that allows people to make mindful choices.