|Utilizing TRIPS Flexibilities for Public Health Protection Through South-South Regional Frameworks
(2004; 110 pages)
Table of Contents
IV.1 Relevant Regional Frameworks
Regional cooperation among developing countries for public health and other purposes can take various forms ranging from mechanisms that bring together countries within the same geographical region, to models that cut across the various regions. The main form of cooperation, which is evident in all the regions of the South with established institutional structures, relates to regional economic integration schemes and related frameworks. While this is the main framework in which a regional approach to the use of TRIPS flexibilities can be implemented, there are other forms of South-South cooperation mechanisms that might also bring advantages such as regional health organizations. Examples include the Commonwealth Regional Health Community Secretariat in Eastern and Southern Africa, the African Association of Central Medical Stores for Generic Essential Drugs (ACAME) for French-speaking West African Countries and the Organization of Eastern Caribbean States (OECS) in the Caribbean.
Regional economic integration as an idea and means of achieving economic growth and development is common to all the developing regions of the world. In Africa, the region embraced regional integration as a central element of its development strategy from the early days of independence as reflected in the creation of the Organization of African Unity (OAU). The fragmentation of the continent into a large number of nation states with scant economic underpinnings, and the small size and primary production structure of most African economies provided a powerful basis for African countries to pursue mutually beneficial economic cooperation and regional integration. The desire to overcome the economic disadvantages of fragmentation gave rise to the establishment of a large number of regional groupings with the objective of creating self-reliant development of African countries.
Regional integration was therefore viewed as a vehicle towards industrialization with dynamic neighbourhood effects and regional spillovers.59 It was also seen as offering opportunities leading to market expansion, economies of scale and diversification of the economic base. Other perceived benefits included efficiency through competition, stronger voice in the international arena, breaking the power of national interest groups and policy credibility. In addition to the economic motivations, aspirations for identity, unity and coherence also influenced the early drives for regional integration in Africa and the desire for regional economic cooperation as the building blocks for continental cooperation and economic development.
59 See African Development Bank (ADB) and African Development Fund (ADF) (2000).
However, despite the enthusiasm for and the creation of a large number of regional economic groupings, African economies continued to be constrained by political boundaries, marginalized and un-integrated in the world economy.60 Responding to the rather poor outcomes of the early integration processes, African countries started showing renewed interest in developing appropriate frameworks for integration in order to realize the benefits of enlarged markets with the attendant opportunities for economic transformation, growth and sustainable development with the signing of the Treaty establishing the African Economic Community (AEC) in 1991.61
61 The Treaty was signed on 3 June 1991 in Abuja, Nigeria. For the full text see 30 I.L.M 1241.
Current integration initiatives in Africa build on earlier institutions while broadening the objectives of the economic cooperation and regional integration to include and emphasize the coordination and harmonization of macroeconomic policies; the lowering of trade tariffs and removal of non-tariff barriers; the facilitation of capital mobility and the free movement of persons. In addition, the new economic integration schemes are paying more attention to crosscutting development issues such as those related to health and education. Today, there are over ten regional economic communities in Africa with the major ones being: the Common Market for Eastern and Southern Africa (COMESA); the Southern African Development Community (SADC); the Economic Community of West African States (ECOWAS) and the East African Community (EAC).62 Box 1 below contains an overview of these RECs.
62 Other groupings include: the Central African Economic and Monetary Community (CEMAC); the South Africa Customs Union (SACU); the West African Economic and Monetary Union (UEMOA); and the Arab Maghreb Union (AMU). development in the region; to cooperate in strengthening the relations between the Common Market and the rest of the world; and to contribute towards the establishment, progress and the realization of the objectives of the AEC.
REGIONAL INTEGRATION IN AFRICA
COMESA: This Common Market was created in 1995, succeeding the Preferential Trade Area (PTA) framework that had been established in 1981. Headquartered in Lusaka, Zambia, it consists of 20 countries: Angola, Burundi, Comoros, D.R Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. COMESA was established with five main aims and objectives. These are: to attain sustainable growth and development of Member States by promoting a more balanced and harmonious development of its production and marketing structures; to promote joint development in all fields of economic activity and joint adoption of macroeconomic policies and programmes to raise the standard of living of its people; to cooperate in the creation of an enabling environment for foreign, cross-border and domestic investment including joint promotion of research and adaptation of science and technology for development; to cooperate in the promotion of peace, security and stability in order to enhance economic development in the region; to cooperate in strengthening the relations between the Common Market and the rest of the world; and to contribute towards the establishment, progress and the realization of the objectives of the AEC.
To achieve these aims, the COMESA Treaty envisages cooperation in six main areas, namely, trade liberalization and customs, transport and communications, industry and energy, monetary affairs and finance, agriculture and in the field of economic and social development. The integration process under COMESA is hoped to result in the lowering or elimination of interregional tariffs, removal of non-tariff barriers, movement towards a common external tariff and rules of origin and cooperation in monetary and financial matters, coordination of macroeconomic policies, free movement of persons, goods, capital and services and towards a common currency.
SADC: SADC succeeded the Southern African Development Coordination Conference in 1992, to bring about economic development and regional integration. The original organization was founded in 1980 by the Frontline States to advance regional cooperation in addition to the objective of putting political pressure on the then apartheid government in South Africa. The SADC Treaty was signed on 17 August 1992 in Windhoek, Namibia. Today the organization has 14 members: Angola, Botswana, D.R. Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. SADC was created to advance a number of objectives including: to promote sustainable and equitable economic growth and socioeconomic development that will ensure poverty alleviation with the ultimate objective of its eradication, enhance the standard and quality of life of the people of Southern Africa and support the socially disadvantaged through regional integration; to promote common political values, systems and other shared values which are transmitted through institutions which are democratic, legitimate, and effective; to consolidate, defend and maintain democracy, peace, security and stability; and to promote self-sustaining development on the basis of collective self-reliance, and the interdependence of Member States.
ECOWAS: The Treaty establishing ECOWAS was signed in Lagos, Nigeria in 1975. In July 1993 a revised ECOWAS Treaty was signed with the aim of accelerating economic integration and increasing political cooperation. The Member States of ECOWAS are: Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. ECOWAS was established with the aim of promoting cooperation and integration, leading to the establishment of an economic union in West Africa in order to raise the living standards of its peoples, and to maintain and enhance economic stability, foster relations among Member States and contribute to the progress and development of the African Continent.
EAC: The EAC was re-established in 1999, 12 years after the collapse of the original East African Community in 1977. The main reasons contributing to the dissolution of the earlier regional arrangement was the lack of strong political will, lack of participation by the private sector and civil society, the continued disproportionate sharing of benefits of the Community and lack of adequate policies to address the latter problem in particular. The Treaty establishing the EAC was signed on 30 November 1999 in Arusha, Tanzania. The Members of the EAC are Kenya, Tanzania and Uganda. The Treaty sets out the objectives of the EAC as, developing policies and programmes aimed at widening and deepening cooperation among the Partner States in political, economic, social and cultural fields, research and technology, defence, security and legal and judicial affairs for their mutual benefit. In this regard, the Treaty envisions the creation of a customs union, a common market, subsequently a monetary union and ultimately a political federation.
In Latin America and the Caribbean, regional integration has also been a long running theme. During the 1960s, the Latin American Free Trade Association (LAFTA), comprising the South American Countries and Mexico, and the Central American Common Market (CACM) were officially launched. The Andean Group was founded in 1969 and the Caribbean Community (CARICOM) established in 1973. While these agreements experienced some success, by the second half of the 1970s all of them were in difficulty, falling into open crisis in the 1980s. The original central objective of these agreements, considered today as "old regionalism", was to support the prevailing state-led import substitution industrialization model of development. The basic strategy was based on a model of development that emphasized increasing private and public investment in manufacturing and infrastructure in order to overcome dependence on exports of primary commodities. Trade discrimination had the objective of fostering domestic industrialization. By extending markets and eventually allowing the benefits of economies of scale and specialization to be reaped, regional integration was supposed to provide social development in member countries.
The new preferential trade arrangements in the region, which were relaunched in the 1990s, referred to as "new regionalism"; display a number of distinctive features as compared to the past.63 The background against which preferential trade arrangements were revived throughout Latin American differed sharply from that of previous decades. In contrast to the goal of protecting domestic markets in order to benefit from economies of scale and specialization, the new focus of preferential liberalization was on improving and securing market access, and upon enhancing the attractiveness of different locations to foreign investment. The central features of ‘the new regionalism’ therefore include an opening to world markets, promotion of private sector initiative, and reinforcing competition in the international markets. Consequently, in addition to the earlier integration schemes, a new integration process emerged, by way of the Common Southern Market (MERCOSUR) in 1991 between Brazil, Argentina, Paraguay and Uruguay. Today, the main regional economic communities in Latin America and the Caribbean therefore include the Andean Community, MERCOSUR, CARICOM, and CACM. Box 2 below contains an overview of these integration schemes.
63 See Bouzas and Ros (1994).
REGIONAL INTEGRATION IN LATIN AMERICA AND THE CARIBBEAN
The Andean Community: The Andean Community which came into being with the signing of the Cartagena Agreement in 1969 is one of the oldest RECs in the Western Hemisphere. Its explicit aim has always been the creation of an economic union, and from the beginning, the group has maintained a substantial institutional structure. After some initial success, the Community endured difficult years in the late 1970s and 1980s. The integration process was revitalized and transformed in the 1990s when group members Bolivia, Colombia, Ecuador, Peru and Venezuela reached a greater consensus towards liberal economic policy reforms. Guided by the Strategic Plan for the Reorganization of the Andean Group (1989), the Community established a four-country free trade area in 1993 and a partial customs union between three members (Colombia, Ecuador and Venezuela) two years later. Peru agreed, in 1997, to full integration into the Andean free trade area by 2005. The purpose of the revitalized system is to ensure the effective coordination between the bodies and institutions that compose it, in order to deepen Andean subregional integration, to promote its external presence and to consolidate and strengthen actions related to the integration process.
Under the Cartagena Agreement member countries commit themselves to implementing a Common External Tariff that must provide adequate levels of protection in favour of subregional production, taking into account the Agreement’s objective of gradually harmonizing the different economic policies of the Member Countries. The component on ‘harmonization of economic policies and coordination of development plans’ establishes that member countries shall progressively adopt a strategy for the achievement of the subregional development objectives. They shall coordinate their development plans in specific sectors and will gradually harmonize their economic and social policies, with the objective of achieving an integrated development of the area, through planned actions.
MERCOSUR: The Treaty establishing MERCOSUR, the largest economic group in Latin America and the Caribbean, was signed in March, 1991 by Argentina, Brazil, Paraguay and Uruguay. MERCOSUR constitutes a "deeper" integration between four of the 11 parties of the Latin American Integration Association (LAIA). The integrated market represents around 45 per cent of Latin American population, 60 per cent of total land area, and over 50 per cent of the region’s gross domestic product (GDP). As its name implies, the group’s ultimate aim is a common market where the free movement of goods, services, capital and people is complemented by a common external tariff and close policy cooperation among its member countries. Beyond developing its internal integration project, MERCOSUR has sought to widen its membership, admitting Chile as an associate member in 1996 and Bolivia in 1997. Agreements with both of these countries are based on pre-existing accords but are relatively far-reaching, involving the virtual elimination of tariffs on trade in goods as well as provisions on issues such as services, investment and double taxation, and sanitary and phytosanitary measures. Free trade negotiations between MERCOSUR and the ANDEAN Community, Mexico, and Peru, are also underway.
The process, as planned, entails five broad steps, namely, the elimination of customs duties and non-tariff barriers to the circulation of goods and services, establishment of a common external tariff and common external trade policy, liberalization of factor movements in the Community, coordination of macroeconomic and sectorial policies of member countries and harmonization of laws in order to strengthen the integration process. The main objective of MERCOSUR is to achieve a free trade area in goods, the first step towards a common market. Consequently, MERCO-SUR´s founding treaty established a programme of automatic and across-the-board elimination of import duties between 1991 and 1994. Most tariffs were dismantled, with the majority of intraregional trade facing zero duties since 1995. With the free trade area largely in place, a common external tariff structure ranging from zero to 20 per cent was introduced in January 1995. The simple average MFN tariff for the trade bloc declined from 41 percent in 1986 to just below 13 percent in 1999.
CARICOM: The Caribbean countries consist of very small economies, many of which are microstates, the smallest being Montserrat. The first integration measures, in 1968, took the form of lowering tariffs and quantitative restrictions. In the 1970s, intraregional trade expanded steadily and stimulated interest in moving from a free trade area to a customs union. Consequently, CARICOM was established by the Treaty of Chaguaramas, in 1973. Initial membership included twelve English -speaking coun-tries-Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent & Grenadines, and Trinidad & Tobago- and the dependent territory of Montserrat. Surinam joined CARICOM in 1995 and Haiti in 2000. Despite its large membership, CARICOM is the smallest regional integration scheme in the Western Hemisphere; the group’s combined GDP is less than US$ 20 billion, its population just 6 million. Because of their small size, CARICOM Member States are acutely aware of the benefits of regional integration and cooperation, and have shown growing dynamism in recent years in terms of joint policy formulation, coordination and commitment towards their integration project.
CARICOM was established with a three-fold objective: to foster economic integration among its Member States’ by creating a common market; to strengthen the region’s external position through the coordination of Member States foreign policies; and to pool scarce resources through functional cooperation in a variety of areas related to socio-economic development. The broad objectives of CARICOM are therefore to promote economic development, which was viewed as possible only if the degree of external dependence was reduced and some measure of economic sovereignty was reclaimed. The process of economic development necessarily involved structural transformation by industrialization, which would be made more viable by the increased size of the regional market and the efficiency generated by attaining economies of scale. Like the other integration processes, CARICOM experienced relative stagnation during the 1980s. Since the early 1990s, however, Member States have actively sought to revitalize their regional links, both by deepening their existing integration scheme and by expanding it to include new members.
The Central American Common Market (CACM): CACM was one of four regional economic integration organizations created during the Latin American export boom of the 1960s. It was established by Guatemala, Honduras, El Salvador, and Nicaragua (and later joined by Costa Rica) with the signing of the General Treaty of Central American Economic Integration in Managua on 15 December 1960. In a move unprecedented in Latin America and the Caribbean at the time, 95 per cent of intraregional trade was liberalised within a few years according to an automatic and set schedule, and in the decade that followed an imperfect union was created. The strong initial dynamism of the CACM was undermined, however, by internal imbalances, external debt crisis and the political crisis in the 1980s.
In terms of objectives, the Managua Treaty incorporated the commitment to establish a common market in five years since the signing of the Treaty. The Member States also agreed to create a free trade area and to constitute a custom union through a common external tariff. During the 1960s and 1970s, the CACM had a significant positive impact on trade flows in Central America. In addition to the protection afforded to consumer goods production by the common external tariff on consumer imports, CACM Member States also promoted investment in industry by introducing generous tax incentives and exemptions for new and existing industrial firms. Despite the considerable expansion of intraregional trade and investment in the 1960s, the main objectives of the Managua Treaty were, however, not fulfilled. By the end of the decade, the region had neither achieved the custom union, the common market, nor the balanced industrial growth. In the early 1990s, after a prolonged period of stagnation, Central American countries began a process of reviving their regional integration scheme. In 1993, with the signing of the Protocol of Guatemala modifying the original founding treaty, CACM member countries adopted a new framework for regional cooperation.
Regionalism in Asia, on the other hand, is relatively new as compared to Africa, Latin America and the Caribbean. The concept only gained momentum in the late 20th Century mainly as a result of political and security considerations.64 Asian regionalism therefore began from political and security considerations before extending to other areas of cooperation such as economic integration. Its development has been accompanied by a deep ambiguity with respect to questions relating to the territorial reach of "Asia" and varying characterizations thereof (e.g., "Pacific Asia", "East Asia", "Central Asia", "South Asia", "Southeast Asia"), the objective existence of de facto economic spaces, and the values (both cultural and economic) and identities embodied in the idea of "Asia".65 As a result of these debates, and owing to the great diversities in history, religion, ethnicity, culture, language, and values among Asian countries, Asian regional economic integration has developed along a pluralistic line, with the proliferation of rival organizational expressions of regionalism66 but no single dominant organization across the continent.67
64 Yang (2002).
65 Rosamond (2003).
66 These regional groupings include the ASEAN, SAARC, Asia Pacific Economic Cooperation (APEC), the ASEAN Regional Forum ("ARF"), the East ASEAN Growth Area ("EAGA"), and the Commonwealth of Independent States ("CIS").
67 Rosamond (2003), p. 128
Regional organizations in Asia are therefore more loosely institutionalized and have not involved the creation of separate supranational institutions. The provisions of preferential trade agreements are generally implemented on a subregional level in accordance with commonly agreed standards, and dispute settlement mechanisms tend to be based on bilateral negotiations. In addition, notwithstanding the existing Asian regional organizations and preferential trade agreements, there has been a proliferation of bilateral trade agreements between Asian countries and their non-Asian counterparts in recent years. For example, Vietnam and Cambodia have trade agreements with the United States. Other countries such as the Philippines as well as Thailand are currently discussing and or studying proposals on bilateral free trade agreements. In the context of this study, the relevant regional groupings in Asia are the Association of Southeast Asian Nations (ASEAN) and the South Asian Association for Regional Cooperation (SAARC). Box 3 below contains an overview of both organizations.
REGIONAL INTEGRATION IN ASIA
ASEAN: ASEAN consists of ten south-east Asian countries, namely, Brunei, Malaysia, Thailand, Singapore, Indonesia, the Philippines, Vietnam, Cambodia, Laos, and Myanmar. ASEAN has a combined population of approximately 500 million people covering a total area of 4.5 million square kilometres. Established on 8 August 1967 in Bangkok, Thailand with the signing of the "ASEAN Declaration," also known as the "Bangkok Declaration," ASEAN was founded primarily for political and economic reasons. The main aims underlying the creation of the Association under the Bangkok Declaration include to: accelerate the economic growth, social progress and cultural development in the region through joint endeavours in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of south-east Asian nations; and to promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries in the region and adherence to the principles of the United Nations Charter.
Other aims include to: promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields; provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres; collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples; promote south-east Asian studies; and to maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes.
ASEAN remained basically inert until political cooperation was formally accepted by the five founding members in 1976 during the Bali Summit, when the Treaty of Amity and Cooperation in Southeast Asia, the Declaration of ASEAN Concord, and the Agreement for the Establishment of the ASEAN Secretariat were signed. The main areas of cooperation are in economic and industrial matters in addition to cooperation in research and development, technology transfer and other economic-related areas.
SAARC: SAARC was established in 1985 with the adoption of its Charter by its seven South Asian member countries, namely, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka. SAARC’s objectives include the acceleration of economic growth, social progress and cultural development in the region; promotion of active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields; and strengthening of cooperation among the Member States in international fora on matters of common interest. Of these objectives, economic cooperation is deemed as the inevitable imperative for promoting all-round development of the region, and is the field of cooperation which has gained considerable momentum within the association.
In 1995, the SAARC Preferential Trading Arrangement (SAPTA) formally came into operation. SAPTA reflected the desire of the SAARC member countries to promote and sustain mutual trade and economic cooperation within the SAARC region through exchange of concessions. SAPTA was likewise envisaged to be the first step towards the transition to a South Asian Free Trade Area (SAFTA), to lead subsequently towards a Customs Union, Common Market, and Economic Union.
From the above review of regional frameworks, it is clear that regional economic integration schemes between developing countries in the same region cover much more than trade. For example, the AEC Treaty has as one of its objectives the promotion of cooperation in "all fields of human endeavour" while the 1967 Bangkok Declaration establishing ASEAN provides for "active collaboration and mutual assistance on matters of common interest in economic, social, cultural, technical, scientific and administrative fields".68 In the context of developing countries, RECs can also be seen as a part of nation building such as the phenomenon of the Zollverein in the 19th Century.69 The RECs, considered together with regional health organizations, in particular, provide a solid institutional and legislative framework for cooperation in matters of health and the use of TRIPS flexibilities.
68 See Article 4(c) of the AEC Treaty, 30 I.L.M 124; 1991.
69 See Venables (2000).