Electronic copy available at: http://ssrn.com/abstract=1019764
LAYING THE FOUNDATION FOR FREE TRADE
AGREEMENTS TO INCLUDE A HEALTH
CHAPTER
Chang-fa Lo
∗∗∗∗A
BSTRACTThe IHR (2005) represents an improvement in the ways and means of dealing with diseases of international concern. Procedurally, there are also some innovative methods that Member States are expected to adopt and implement. One such approach is the emphasis on international cooperation. There are different options available to achieve the objective of international cooperation, including bilateral cooperation, regional cooperation, cooperation under the intervention of the WHO, and cooperation between Member States and the WHO.
Traditionally, bilateral or regional cooperation on health matters is not conducted in a frequent or consistent manner. Since the conclusion of the new IHR, the need for some form of bilateral or regional cooperation arrangement is more pressing. This paper argues that the use of FTA as a vehicle to conduct bilateral or regional cooperation is appropriate. It also suggests the health contents to be covered by the FTA.
If countries are to use FTAs as a legal means to deal with health matters, the expectation of the new IHR concerning bilateral and regional cooperation and collaboration could be realized in a quicker and more effective manner, partly due to the already comprehensive FTA network between and among countries and partly due to the relatively efficient institutional arrangement in place under the respective FTAs.
Electronic copy available at: http://ssrn.com/abstract=1019764
K
EYWORDS:
IHR(2005);FTA;GATS;GATT1994;WHO;WTOI. INTRODUCTION
Free trade agreements (hereinafter FTA) are of growing importance today. Their importance is basically reflected in their function of promoting deeper trade liberalization, and thus in making it possible for larger volumes of freer movement of goods, services and people among constituent members within their respective free trade areas. Their importance is also shown by the fact that there have been so many regional trade arrangements, mainly FTAs, concluded and notified to the World Trade Organization (WTO).1 This has had a notable impact on the WTO from many perspectives.
One perspective is that it has practically changed the multilateral non-discriminatory basis required by the General Agreement on Tariffs and Trade (hereinafter GATT) and the General Agreement on Trade in Services (hereinafter GATS) into permissive discriminatory policies between different trading blocs. Another perspective is in the wide coverage of matters dealt with by the FTAs, which have immensely exceeded the scope of the WTO. Typical matters of such kind include competition policy, environment, and investment. The remarkable development in these areas is not easily overlooked.
On the other hand, the issues concerning international health are also more and more important. Because of globalization and trade liberalization in the past decades, there is more persistent and frequent movement and exchange of people, goods and services. Such volumes of movement of people and goods have given rise to more health issues, which have attracted worldwide attention and concern. Also because of such globalization and freer movement of people and goods and because of newly emerging factors and elements that could affect human health, the new International Health Regulations was passed in 2005 (hereinafter IHR (2005) or the new IHR) and is to be brought into effect in 2007.
The IHR (2005) represents an improvement in the ways and means of dealing with diseases of international concern. Procedurally, there are also some innovative methods that Member States are expected to adopt and
1 As indicated in the WTO website, in the period 1948-1994, the GATT received 124 notifications of RTAs (relating to trade in goods), and since the creation of the WTO in 1995, over 130 additional arrangements covering trade in goods or services have been notified. See http://www.wto.org/english/ tratop_e/region_e/regfac_e.htm (last visited Nov 2, 2006).
implement. There are different options available to achieve the objective of international cooperation, including bilateral cooperation, regional cooperation, cooperation under the intervention of the WHO, and cooperation between Member States and the WHO.
Traditionally, bilateral or regional cooperation on health matters is not conducted in a frequent or consistent manner. Since the conclusion of the new IHR, the need for some form of bilateral or regional cooperation arrangement is more pressing. This paper tries to argue that the use of FTA as a vehicle to conduct bilateral or regional cooperation is appropriate. This paper also suggests the health contents to be covered by the FTA.
This paper starts with the requirement of international cooperation under the new IHR. It further reviews the practice of FTAs to see whether some have already dealt with some health issues. It then discusses the reasons that FTA should be an appropriate vehicle to enhance bilateral or regional health cooperation. The purpose is to promote the idea that the scope of FTAs should be expanded so as to include health chapter as basic content.
II. THE REQUIREMENT OF NEW IHR UPON ITS MEMBERS TO
ENGAGE IN INTERNATIONAL COOPERATION
It is very often stressed that epidemic-prone and merging pathogens present recurrent threats to developing and developed countries alike and epidemics do not respect national boundaries.2 The legal tool serving as a basis to deal with epidemics is still the IHR amended in 1969 and the new IHR which is to be brought into effect in 2007 to replace the 1969 IHR. The new IHR “mandates a number of measures and procedures in the global alert and response mechanisms, including the designation of National IHR Focal Points, as well as WHO IHR Contact Points at the global and/or regional levels. The Regulations outline the rules and a number of the procedures for international response to public health risks and emergencies. In addition, improved national capacities for epidemic surveillance and response are underlined as central to the proper functioning of the IHR (2005).”3
Among various implementation methods, international cooperation is also a key to the success of IHR (2005). As a matter of fact, the adoption of the IHR (2005) has already represented an international cooperation on health matters among countries. In addition, if we look more into the new
2
WHO, a background explanation on a conference “International Consultation on Strengthening
National Capacities for Epidemic Preparedness and Response in Support to the National Implementation of the International Health Regulations (IHR)” held in Lyon, France 2-5 May 2006.
See http:// www.who.int/csr/labepidemiology/background_en.pdf (last visited Nov 2, 2006). 3 Id.
IHR, there are a number of provisions emphasizing international cooperation.
For instance, Article 14, which is entitled “Cooperation of WHO with Intergovernmental Organizations and International Bodies”, provides in paragraphs 1 and 2 the following: “WHO shall cooperate and coordinate its activities, as appropriate, with other competent intergovernmental organizations or international bodies in the implementation of these Regulations, including through the conclusion of agreements and other similar arrangements.” “In cases in which notification or verification of, or response to, an event is primarily within the competence of other intergovernmental organizations or international bodies, WHO shall coordinate its activities with such organizations or bodies in order to ensure the application of adequate measures for the protection of public health.”
Article 44, which is entitled “Collaboration and Assistance”, provides in paragraph 1 that States Parties shall undertake to collaborate with each other, to the extent possible, in the areas listed in that particular paragraph, including, for instance, the detection and assessment of, and response to, events as provided under these Regulations and the provision or facilitation of technical cooperation and logistical support, particularly in the development, strengthening and maintenance of the public health capacities required under these Regulations. Under paragraph 2 of the same article, WHO shall collaborate with States Parties, upon request, to the extent possible, in the listed areas, including, for instance, the evaluation and assessment of their public health capacities in order to facilitate the effective implementation of these Regulations. Equally noticeably, paragraph 3 of Article 44 states: “Collaboration under this Article may be implemented through multiple channels, including bilaterally, through regional networks and the WHO regional offices, and through intergovernmental organizations and international bodies.”
Apparently, international cooperation has been one of the ways emphasized by the new IHR in its implementation mechanism. And bilateral and regional cooperation is one of the keys in conducting international cooperation.
III. FTASHAVING LEGAL STATUS UNDER THE NEW IHR
The new IHR has also recognized regional integration and has given it some status under the Regulations. For instance, Article 57, which is entitled “Relationship with Other International Agreements”, states in paragraph 3 that: “Without prejudice to their obligations under these Regulations, States Parties that are members of a regional economic integration organization shall apply in their mutual relations the common rules in force in that regional economic integration organization.”
Another example is in Article 47 of the new IHR, which is about the composition of an IHR Expert Roster for the purpose of establishing the emergency committee and the review committee. Under paragraph 1 of this article, in addition to appointing the members of the IHR Expert Roster in
accordance with the WHO Advisory Panel Regulations, the
Director-General shall appoint one member at the request of each State
Party and, where appropriate, experts proposed by relevant
intergovernmental and regional economic integration organizations [emphasis added]. Also the Director-General shall periodically inform the States Parties, and relevant intergovernmental and regional economic
integration organizations [emphasis added], of the composition of the IHR Expert Roster.
However, there is no definition on the term “regional economic integration organization” in the new IHR. Thus a possible issue is whether the term “regional economic integration organization” only includes higher level of economic integration, such as a customs union,4 or it also
recognizes lower level of economic integration, such as an FTA.5
Regional economic arrangement with higher level and deeper degree of integration, such as the European Union, is of no doubt a regional economic integration organization mentioned in the new IHR. As a matter
of fact, the WHO cited EU and MERCOSUR6 as the two examples of
economic integration organizations by stating that: “WHO will work with regional economic integration organizations such as the European Union and the Mercado Común del Sur (MERCOSUR) in implementing the Regulations in the countries of their respective regions.”7 These economic integration organizations also recognize their role under the WHO. For instance, according to the EU, although “the EU itself is not a party to the IHR, but the Commission [of EU] believes the EU and its Member States can and should work together to optimize IHR implementation in the
4 Under a customs union, there must be the substitution of a single customs territory for two or more customs territories, so that duties and other restrictive regulations of commerce are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories, and, substantially the same duties and other regulations of commerce are applied by each of the members of the union to the trade of territories not included in the union. See Article XXIV, paragraph 1(a) of the GATT 1994.
5 Under a free-trade area, there must be a group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories in products originating in such territories. See Article XXIV, paragraph 1(b) of the GATT 1994.
6 MERCOSUR was established under the Treaty Establishing a Common Market between the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay. See http:// www.sice.oas.org/trade/mrcsr/mrcsrtoc.asp (last visited Nov 10, 2006.
7WHO, “Frequently asked questions about the International Health Regulations”, http:// www.who.int/csr/ihr/howtheywork/faq/en/#body (last visited Nov 3, 2006).
context of the EU policies and health related actions and initiatives.”8 It is not clear whether the term “regional economic integration organization” will cover FTAs under the new IHR. In another public health treaty, the WHO Framework Convention on Tobacco Control (hereinafter FCTC), there is a definition on this term by stating in Article 1(b): “’regional economic integration organization’ means an organization that is composed of several sovereign states, and to which its member States have transferred competence over a range of matters, including the authority to
make decisions binding on its Member States in respect of those matters.” 9
Although the FCTC and the new IHR are different international treaties, the definition helps to understand the concept of such term envisaged by the Member States of WHO when they negotiated the new IHR.
Under the definition, there are two basic requirements for the purpose of qualifying an economic integration to be considered as a “regional economic integration organization” regarding international health matters: (1) it must be composed of several sovereign states, and (2) there must be competence over a range of matters being transferred to the integration, including the authority to make decisions binding on its Member States.
An FTA can be qualified from these requirements. To take North American Free Trade Agreement (NAFTA) as an example, there are three sovereign States forming NAFTA. These countries are bound by their commitments concerning market access and national treatment, customs procedures, sanitary and phytosanitary matters, standards related matters, investment matters, etc. Their respective final antidumping and countervailing duty determinations are subject to a special review system established under Chapter Nineteen of NAFTA. There is a Free Trade Commission and a Secretariat established under Chapter Twenty to administer matters arising from the operation of NAFTA. The Commission is authorized to supervise the implementation of NAFTA, to oversee its further elaboration, to resolve disputes that may arise regarding its interpretation or application, to supervise the work of all committees and working groups established under NAFTA, and to consider any other
matters that may affect the operation of NAFTA.10
Thus this paper concludes that an FTA can be considered as regional economic integration organization under the IHR (2005). And therefore, an FTA can have common rules concerning health matters to be applied among members of the FTA from the perspective of the new IHR.
8 EU Commission, International Health Regulations – Commission calls for proactive implementation, particularly on flu aspects, IP/06/1276 (Sep 28, 2006), http://europa.eu/rapid/ pressReleasesAction.do?reference=IP/06/1276&format=HTML&aged=0&language=EN&guiLang uage=en (last visited Mar 5, 2006.
9 The text can be found at the WHO website See http://www.paho.org/english/gov/cd/ cd44-28-e.pdf (last visited Nov 3, 2006).
IV. FTA AND HEALTH MATTERS
A. The Provisions under FTA Dealing with Health Matters
FTAs nowadays cannot be understood purely from the perspective of trade agreements. Most FTAs concluded within the last decade or so, or those established after NAFTA in 1994, have much wider coverage. As indicated earlier, NAFTA includes trade and customs matters concerning tariff elimination, national treatment, non-tariff measures, customs procedures, sanitary and phytosanitary measures, technical barriers to trade, government procurement, investment, competition policy, intellectual property rights and trade in services.
So many other FTAs also cover very broad trade-related matters, such as intellectual property, competition policy, and, sometimes, environmental measures. Many of them are presented as independent chapters in these FTAs. Most FTAs also have health elements. But they are only articles or paragraphs in respective chapters. No health chapter can be found in any existing FTA.
To take NAFTA as an example to illustrate the health elements in FTAs: In Chapter Seven, which is entitled “Agriculture and Sanitary and Phytosanitary Measures”, there is paragraph 1 of Article 712 providing that: “Each Party may, in accordance with this Section, adopt, maintain or apply any sanitary or phytosanitary measure necessary for the protection of human, animal or plaint life or health in its territory, including a measure
more stringent than an international standard, guideline or
recommendation.” Also Article 712, paragraph 2 provides:
“Notwithstanding any other provision of this Section, each Party may, in protecting human, animal or plant life or health, establish its appropriate levels of protection in accordance with Article 715.”
Again in paragraph 1 of Article 713, it is provided that: “Without reducing the level of protection of human, animal or plant life or health, each Party shall use, as a basis for its sanitary and phytosanitary measures, relevant international standards, guidelines or recommendations with the objective, among others, of making its sanitary and phytosanitary measures equivalent or, where appropriate, identical to those of the other Parties.” And in paragraph 1 of Article 714, it is provided that: “Without reducing the level of protection of human, animal or plant life or health, the Parties shall to the greatest practicable and in accordance with this Section, pursue equivalence of their respective sanitary and phytosanitary measures.”
In Chapter Nine, which is entitled “Standard Related Measures”, there is a provision in paragraph 1 of Article 904 stating that: “Each Party may, in accordance with this Agreement, adopt, maintain or apply any standards-related measure, including any such measure relating to safety,
the protection of human, animal or plant life and health, the environment or
consumers, and any measure to ensure its enforcement or
implementation…” Article 904, paragraph 2 has the following provision: “Notwithstanding any other provision of this Chapter, each Party may, in pursuing its legitimate objectives of safety or the protection of human, animal or plant life or health, the environment or consumers, establish the levels of protection that it considers appropriate in accordance with Article 907(2).”
Article 906, paragraph 1 provides: “Recognizing the crucial role of standards-related measures in achieving legitimate objectives, the Parties shall, in accordance with this Chapter, work jointly to enhance the level of safety and of protection of human, animal and plant life and health, the environment and consumers. Article 906, paragraph 2: “Without reducing the level of safety or of protection of human, animal or plant life or health, the environment or consumers, without prejudice to the rights of any Party under this Chapter, and taking into account international standardization activities, the Parties shall, to the greatest extent practicable, make compatible their respective standards-related measures, so as to facilitate trade in good or service between the Parties.”
In addition to all these, Article 915 defines international standardizing bodies so as to include WHO. And Article 2101 makes human health an exception to the relevant obligations under the agreement.
B. The Operation of FTAs Having Effects on Public Health
Another apparent example showing an FTA has functioned to promote public health in a relevant region is the ASEAN Free Trade Agreement (AFTA). When the AFTA agreement was originally signed in 1992, ASEAN had six members (Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand). Vietnam joined in 1995, Laos and Myanmar in
1997, and Cambodia in 1999.11 According to a writer,
The founders of ASEAN aimed at accelerating social progress and promoting active collaboration and mutual assistance in social matters. While the ASEAN goal was rather ambivalent, the promotion of public health was still an aspect of social progress they envisaged working towards. The Bangkok Declaration was clarified by the ASEAN heads of state in 1976 when they declared that one of the primary concerns of ASEAN cooperation would be the elimination of disease. The clarification was important even though its social plan of
action failed to mention public health cooperation. Emerging trends suggest that ASEAN is expanding its scope of cooperative activities beyond economic and political matters to encompass public health issues. The increasing public health threat of AIDS, the persistence of malaria, and the rising burden of lifestyle diseases, such as tobacco-related diseases will inevitably make the promotion of public health
an important issue for the ASEAN to address.12
Thus, it is also apparent that health matters have long been one of the concerns of AFTA and that health matters have been part of the regional cooperation efforts under the framework of the free trade arrangement.
V. REASONS FOR FTA TO HAVE A HEALTH CHAPTER TO DEAL WITH PUBLIC HEALTH MATTERS
There are reasons for countries to include a more comprehensive set of rules to cope with health matters within FTA or even to have a chapter on public health:
A. FTA not to be Restricted within “Pure” Trade Matters:
As it has been explained, it is already common practice for FTAs deal with a wide range of matters having only indirectly to do with trade. Currently, other matters commonly included in FTAs have closer link to trade. For instance, competition policy is about market structure and market competition. The proper enforcement of competition policy would help prevent barriers created by private firms through anticompetitive practices. Also for instance, investment is mainly about bringing capital into a domestic market to set up production facilities. An investment policy would have an effect of changing trade flows, trade volumes or trade patterns. A further example is intellectual property rights matters, which are about the protection of inventions, creations, and other innovative results. The proper protection of such rights would help right-holders to engage in appropriate sales or even international trade.
Although these other matters have a fairly close connection to trade, this should not preclude the possibility that an FTA could be further expanded to deal with health matters. This is basically because that there is no specific rules under the WTO or other international norm about which
12 See William Onzivu, Globalism, Regionalism, or Both: Health Policy and Regional Economic Integration in Developing Countries, an Evolution of a Legal Regime? 15 MINN.J.INT'L L. 111, 170-71 (2006).
matters should be included in an FTA and which matters should not. Health is also tied very closely with international trade, as it will be explained below.
B. The Links between Health and International and Regional Trade:
The basic idea under current FTAs about including a health element in trade agreements is to make human health and life a superior value over international trade. In other words, when applying any measures (such as sanitary or phytosanitary measures or technical requirements), if it is necessary for the protection of human health and life, measures that could even have adverse effect on international trade should be permitted.
In addition to making the protection of human health a priority over trade, there are other areas where trade could affect health or where health issues could affect trade. From a broader perspective, there have been debates about whether trade liberalization could enhance health. People argue that liberalized trade produce positive trade impacts, because increased trade raises productivity levels and leads to higher incomes and better standards of living, including better health status. On the other hand, critics claim that there is no conclusive empirical evidence showing that liberalized trade has raised incomes and standards of living.13 From the perspective of FTAs, same positive and negative arguments about the relations between trade and health are still valid.
Thus one thing particularly important for an FTA is the way of maximizing the positive effects that could be generated by the FTA within the region and minimizing the negative effects (or possible negative effects) that could arise from trade liberalization between the constituent members of the FTA. A more comprehensive set of health provisions or even a health chapter in an FTA could enhance such a process of minimization and maximization.
C. Including Health Issues in FTAs Conforms with International Health Regimes:
As has been explained, under the new IHR, there are rules encouraging countries to engage in bilateral and regional cooperation. To exemplify such encouragement of bilateral and regional cooperation, paragraph 3 of Article 44 of the new IHR clearly suggests that: “collaboration between Member States may be implemented through multiple channels, including bilaterally, through regional networks and the WHO regional offices, and through intergovernmental organizations and international bodies”. An
FTA is apparently a platform envisaged by Member States for them to engage in collaboration efforts bilaterally or regionally, depending upon whether such FTA is a bilateral or regional one. Also paragraph 3 of Article 57 of the new IHR sets up a permissive rule for countries to apply regional common rules set forth by the regional economic integration organization.
Although the focus of our discussion is on IHR, a heath chapter or a set of health provisions under an FTA can be broad enough to cover other aspects of public health issues. An appropriate example is the issues dealt with by the FCTC. From the perspective of a health chapter or a set of health provisions, a lot of FCTC issues, such as restriction of sales promotion and advertising, requirement on packaging and labelling, and regulation on illicit trade in tobacco products14 are also matters that could be taken care of by an FTA, depending upon whether the control of tobacco fits the respective policy of the members to the FTA.
D. FTAs Being the Most Important Framework under Which Countries Can Have Exchanges:
The fact that there are so many FTAs, and that essentially most countries are members to at least one FTA, has shown that FTAs are the most important network having been the common practice of countries throughout the world. It is also a fact that the coverage of FTAs is so broad so as to include trade matters as well as very indirect trade-related matters. On the other hand, if we look at other cooperation vehicles, we simply cannot find anything comparable. For instance, there are thousands of bilateral investment agreements being signed by almost all countries throughout the world.15 However, most investment agreements only dealt with pure investment issues, such as protection and the opening up of investment markets. It is not a common practice to include non-investment matters or matters that have only very remote relations with investment, such as health matters. Also, there have been few regional investment agreements. Thus it would not be practicable to expect an investment agreement to carry a public heath responsibility for bilateral or regional purposes. Thus, due to the broadness of the issues covered, and because of the comprehensiveness of participant coverage, FTAs should be far more appropriate as a vehicle for countries to engage in bilateral or regional cooperation.
Although it is also possible for countries to conclude bilateral or regional health agreements for the purposes of engaging in greater
14The text of FCTC can be found at http://www.who.int/tobacco/framework/WHO_FCTC_ english.pdf (last visited Nov 20, 2006).
cooperation and collaboration, an establishment of a separate health agreement is more difficult, taking into consideration the fact that countries could feel more hesitatant to establish a whole separate set of institutional arrangements just for bilateral or regional health matters. Also, it would be more complicated to deal with coordination matters between the health agreement and the FTAs.
VI. THE HEALTH MATTERS THAT CAN BE COVERED BY AN FTA
Since the current practice of FTA has been not to include a health chapter or a complete set of health provisions, there is no standard or typical form of cooperation on health matters under FTAs; neither is there any definitive list of health matters typically covered or not covered by an FTA. However, the coverage of health matters by an FTA can be contemplated from the provisions of Article 57 of the new IHR. Article 57 is about the relationship of the IHR (2005) and other international agreements. It expects that the IHR and other relevant international agreements should be interpreted so as to be compatible and instructs that the provisions of the IHR shall not affect the rights and obligations of any State Party derived from other international agreements. Under paragraph 2 of this article, it permits countries having certain interests in common, owing to their health, geographical, social or economic conditions, to conclude special treaties or arrangements in order to facilitate the application of these Regulations, and in particular with regard to the following matters: (a) the direct and rapid exchange of public health information between neighbouring territories of different States; (b) the health measures to be applied to international coastal traffic and to international traffic in waters within their jurisdiction; (c) the health measures to be applied in contiguous territories of different States at their common frontier; (d) arrangements for carrying affected persons or affected human remains by means of transport specially adapted for the purpose; and (e) deratting, disinsection, disinfection, decontamination or other treatment designed to render goods free of disease-causing agents.
Thus, it should be appropriate to expect that an FTA chapter could also deal with matters concerning exchange of public health information, the health measures to be applied to international coastal traffic and to international traffic in waters within their jurisdiction and in contiguous territories of different States at their common frontier, arrangements for carrying affected persons or affected human remains by means of transport specially adapted for the purpose, and treatment designed to render goods free of disease-causing agents.
In addition to the exchange of information suggested above, the sharing of experience and other programs focusing on surveillance, prevention,
control, response, and care and treatment in respect of infectious diseases, and vaccines against them might all be appropriate matters under an FTA.
VII. CONCLUSION
After the adoption of the new IHR, there have been a lot of discussions about the implementation of the Regulations. However, discussions do not extensively cover the methods of enhancing international cooperation at bilateral and regional levels. Considering the importance of bilateral and regional cooperation envisaged by the new IHR, the paper tries to argue that current FTAs widely existing in different regions could be very effective and useful to serve as a vehicle to deal with health matters for many reasons.
The practice of FTAs by countries has always been flexible in including new issues, whether it is directly or indirectly related to trade between or among constituent members of such bilateral or regional arrangements. Thus it is susceptible to more indirect trade-related issues, such as public health.
If countries are to use FTAs as a legal means to deal with health matters, the expectation of the new IHR concerning bilateral and regional cooperation and collaboration could be realized in a quicker and effective manner, partly due to the already comprehensive FTA network between and among countries and partly due to the relative well functioning institutional arrangements in place under the respective FTAs.
