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Womb for Rent: Regulating the international surrogacy market

This August, India’s legislature drafted a law aimed at shutting the door on a marketplace that lies on both the cutting-edge of science and the rogue fringes of politics: commercial surrogacy. The nation’s legislature unveiled plans to limit surrogacy to “altruistic” operations between relatives, and it’s not hard to see why. To many in India and around the globe, the idea of paying a woman to carry a child seems abhorrent. Critics lament women being coerced by poverty into the lengthy task of renting out their wombs, and even supporters cannot deny the lopsided power dynamic between poor surrogates and wealthy couples who often hail from abroad.

In impoverished countries, however, the large payouts commercial surrogacy offers can be life-changing. For this reason, fertility expert Dr. Archana Dhawan Bajaj explained to Agence France-Presse that, “while we need regulations to ensure that no women are forced into surrogacy, an outright ban isn’t logical.” Dr. Bajaj is right: Surrogacy offers promising economic and social benefits, and effective regulation is feasible and necessary. Although bans on commercial surrogacy may be attractive in developing countries, governments should instead push for proper regulation, potentially providing life-changing economic benefits to surrogates while protecting the fundamental human right to have children.

Only a handful of countries around the world have laws legalizing commercial surrogacy, which are essentially a requirement for surrogacy agencies to set up shop. The United States is one such nation, with eight states codifying regulatory permissions for process. Israel too, has also passed effective legal regulations for commercial surrogacy. Yet these two nations have serious accessibility issues. In the US, the primary restriction hopeful parents encounter is cost: On average, surrogacy costs eclipse $115,000 in the US, compared to around $40,000 in Mexico or Ukraine. Prices are lower in Israel, but the government has levied stiff ideological regulations on potential parents. Homosexual or interfaith couples and the disabled are all legally forbidden from becoming parents through domestic commercial surrogacy; they must instead seek a surrogate abroad. Draft regulations in India pose similar restrictions.

In developing nations, surrogacy-related regulatory structures are messy if they exist at all. Sam Everingham, the director of the Australian nonprofit Families Through Surrogacy, explains that, “surrogacy is a foreign concept in Cambodia. No laws are in place to regulate the process, leaving both parents and surrogates unprotected.” Poor regulatory frameworks are the norm, with only 71 nations having any surrogacy laws whatsoever.

In the past, couples facing economic or legal barriers in their own country sought surrogates in developing nations like Nepal, India, and Thailand. But after a string of scandals and accusations of exploitation and abuse by surrogacy agents, these countries have each made it more difficult for foreigners to use surrogacy services legally. However, far from deterring hopeful couples, the new regulations have pushed them to move to other countries with lower prices and scant regulation. Cambodia is the latest example: following Thailand’s ban on “surrogacy tourism,” Bangkok’s infertility clinics have moved en masse to Phnom Penh, creating an overnight boom in the local surrogacy industry.

The string of surrogacy bans across South and Southeast Asia have raised fears that the surrogacy market is being forced underground. Thai newspaper Thai Roth reported in 2014 that Thailand’s surrogacy ban will likely cause people to “carry [surrogacy] out illegally and out of sight – and [they] may resort to human trafficking or kidnapping to get children out of the country.” The prediction was well-founded: Commercial surrogacy is illegal in China, and its black market is extremely robust. “China’s underground market shows that there is a need for surrogacy in society,” explained Wang Bin, a professor at Nankai University, “And where there is a need, there is a market.”

Black markets create a whole host of adverse effects. Where, in a legal market, surrogates get healthcare from doctors hired by Western firms, in black markets they are instead taken care of by anyone the illegal provider can find. In a regulated system, women can sue if the terms of their contract are broken; if they’re slighted in an underground transaction, the government offers no recourse other than penalties for the surrogate for breaking the law by entering an agreement in the first place.

Besides potentially opening the floodgates of the black market, banning commercial surrogacy also forfeits the immense economic benefits that a well-regulated industry could offer. The low price of surrogacy in developing countries raises widespread fears of an economic power imbalance between rich Western couples and poor women. Yet the lower price doesn’t at all indicate a worse deal for would-be surrogates. The buying power of first-world currencies makes the process extremely profitable for surrogates living in developing countries such as Cambodia. There, swaths of women work 13-hour days, 7 days per week in dangerous conditions at garment factories or other large-scale manufacturing enterprises. These women often make as little as three dollars a day – about 12,000 Cambodian reil – adding up to barely more than $1,000 annually. Comparatively, nine months of surrogacy contracts can offer women $14,000 plus free medical care throughout the pregnancy.

Multiplying the income of a woman in Cambodia by a factor of 14 is staggering in any capacity, but what may be even more important is giving women an option to avoid dangerous working conditions in other fields. While pregnancy certainly comes with bodily risks, most of them pale in comparison to the perils of other common Cambodian industries. For example, 80-plus-hour work weeks in cramped sweatshops can have much larger tolls on health, with hundreds dying in factory fires around the world every year and thousands more sustaining workplace injuries. Unfortunately, these jobs aren’t even guaranteed. For women can’t secure a stable income, their only choice is often turning to the prostitution industry, which is enormous, dangerous, and unregulated. When the alternative for poor women is prostitution or working in a sweatshop, surrogacy is a safer – and far better paying – source of income, especially if governments implement effective regulations.

Beyond just the prospects of avoiding more dangerous fields of work, the massive payments from surrogacy can help women make long-term economic gains. While consistent but low payments from traditional jobs pay bills and buy food, massive, one-time payments can help women make investments that can have huge returns over the long run. A wealth of academic literature has pointed to large, one-time payments – like cash transfers or surrogacy payments – being an extremely effective way of improving standards of living, as they allow for investments that might be too expensive for a garment-worker’s salary, but pay out over time. For instance, many poor families in developing nations must replace the thatched roofs of their homes multiple times a year, costing them inordinate sums of money. A study from MIT in 2013, however, found that even just small transfers increased the odds of families owning a house with a metal roof rather than a thatched one by 23 percentage points, offering a return on investment of 23 to 48 percent per year.

For the surrogates themselves, these payments offer hope in a tumultuous environment. In many South Asian nations, $5,000 will buy women a plot of land or even a home in rural communities. “When I get this money, I’m going to go back and start something on my own,” said a Nepalese surrogate to NPR late last year, “Start a small shop, you know, my own little enterprise.” In impoverished communities around the world, a lack of access to education and paltry wages mean women are often forced into cycles of poverty, working their whole lives just for food security.

The payments surrogacy offers women can be life-changing, but exponentially increasing income isn’t worth the host of dangers that can come from an unregulated market. Given how beneficial the process can be to surrogates in poor countries, a strong and judicious regulatory structure would seem more logical than an outright ban – the same conclusion that states like California came to when they legalized the process. A well-regulated industry should seek to maximize the benefits that women receive from the process while prioritizing safety and stability for all parties involved.

First, governments should implement a price floor in the surrogate market. Auditing firms’ payments to workers is more straightforward than other types of regulation, as it only requires looking through bank statements and payrolls. This regulation could work through the tax collection services of developing nations rather than requiring them to set up an entirely new regulatory agency. Furthermore, due to the possibility of levying fines on infracting firms, governments have a revenue incentive to do thorough searches. The ease of checking payments through simply looking at financial statements makes implementing a tiered regulatory structure particularly attractive; with multiple eyes checking all documentation, one corrupt auditor won’t spoil the bunch.

Codified price floors also give women the opportunity for legal recourse if firms attempt to pay them unacceptable amounts. Simply providing educational materials to women on their rights in civil court would allow for women to sue more easily if agencies are found to have breached agreements. The main qualm with price floors is the added cost they create for firms, but in a high-profit-margin market like commercial surrogacy, this isn’t likely to be a huge problem. Surrogacy companies often only pay their surrogates 33 to 50 percent of their total revenue, allowing for profit-margins at least able to survive paying women what they promised. Furthermore, with very few countries involved in the international surrogacy marketplace, agencies could get away with passing extra costs to consumers while still keeping prices at just a fraction of what they are in Western surrogacy firms.

Developing countries should also work to ensure that women are not coerced into surrogacy and that the psychological effects of the process are pre-screened and adequately treated. An existing Israeli regulation requires psychological and physical tests before women can enter surrogacy agreements and creates a standard for the informed and voluntary consent of surrogates. In Argentina, a judicial committee must approve agreements, and in Virginia, women are even entitled to legal counsel before they sign surrogacy contracts. Invoking medical review and judicial power can help avoid coercive structures, and offering educational materials and even the advice of a lawyer can ensure women are fully informed about every aspect of the procedures. With new tax revenue from the market itself and a bit of legislative gusto, these precautionary measures can easily become a reality in nations hoping to regulate the trade.

Finally, governments should ensure that medical standards and procedures are all up to par. In unregulated environments, surrogates were often exposed to multiple successive pregnancies and other harmful practices in order to raise success rates. In many countries where surrogacy occurs, firms face no penalties for offering shoddy medical care. The Brooklyn Journal of International Law explains that before Thailand banned commercial surrogacy, “regulation of the industry merely included measures aimed toward Thai doctors, not the parties to surrogacy arrangements, and even those measures were routinely overlooked.” To eliminate these sorts of issues, regulators can inspect medical facilities, ensure women are informed of their rights to good care, and implement stiff penalties for firms found offering substandard medical support to their surrogates. Furthermore, governments could require firms to offer medical care to women after they give birth to a surrogate child; some of the most psychologically pernicious effects of pregnancy can occur after birth, and extending aid to women during that stage is imperative. Outlawing unsafe practices, monitoring the medical process, and providing for care after pregnancy will allow for safer surrogacy for all parties involved, helping to maximize the sustainability of the practice.

The debate over commercial surrogacy in developing nations is fraught with both ethical and pragmatic concerns. While the practice has created horror stories, it’s irresponsible for governments to ban commercial surrogacy outright, given that the colossal payments from abroad can dramatically improve the lives of surrogates and leave the potential for broader economic growth in their wake. Especially when considering the black markets that bans often generate, developing nations should seek intelligent and efficient regulations to ensure the safety of surrogates in exchange for slightly raising the price for hopeful parents and surrogacy agencies. This won’t be an easy task, but it is a policy worth carrying to term.

About the Author

Jack Glaser is an applied mathematics-economics concentrator and is our Senior Managing Editor.