Kenneth C. Shadlen

Exchanging development for market access? Deep integration and industrial policy under multilateral and regional-bilateral trade agreements

ABSTRACT This paper analyzes the developmental trade-offs involved in multilateral versus regional-bilateral strategies of integration into the international economy. I contrast the regulations that guide policy in the areas of trade, investment, and intellectual property in the World Trade Organization (WTO) and in regional-bilateral agreements between the US and developing countries. Both strategies of integration feature similar trade-offs, in that developing countries gain increased market access and opportunities for specialization in exchange for diminished space for use of industrial policy instruments to create new productive capacities. However, the trade-offs are intensified in the case of regional-bilateral agreements: countries receive more market access, but in exchange make significantly deeper concessions regarding the management of inward investment and intellectual policy. I argue that countries whose integration into the international economy is guided by their obligations as members of the WTO still have opportunities to implement industrial strategies that are designed to alter comparative advantages and achieve upward mobility in the international economic order, but the obligations under the regional-bilateral strategy greatly circumscribe these options. The paper thus points to the need for new terms of reference in the debate over ‘policy space’ in the international political economy. In analyzing contemporary development strategies, the most useful contrast is not between the alternatives that countries have under the WTO and the alternatives that countries had in the past under the WTOs predecessors, but between a constraining multilateral environment and even more constraining regional and bilateral environments that condition increased market access on the sacrifice of the very tools that countries have historically used to capture the developmental benefits of integration into the international economy.

Globalisation, Power and Integration: The Political Economy of Regional and Bilateral Trade Agreements in the Americas

Abstract This article explores the dynamics of regional economic integration in the Americas. Economic globalisation, or an increased volume of trade and investment and increased mobility of capital, presents developing countries with new opportunities and challenges. In particular, the emergence of south-east Asia as a major site for the production and export of manufactured goods has generated intense competition among developing countries for foreign investment and export-market shares. In this article, globalisation and ensuing competition is linked to the process of economic integration between the United States and countries of Latin America and the Caribbean. Fundamental changes in global patterns of investment and trade, in combination with international and domestic power asymmetries, contribute to the spread and proliferation of regional and bilateral trade agreements (RBTAs) between the United States and its hemispheric neighbours.

Patents and pills power and procedure: the North-South politics of public health in the WTO.

Developing countries have limited control over the distributional and substantive dimensions of international institutions, but they retain an important stake in a rule-based international order that can reduce uncertainty and stabilize expectations. Because international institutions can provide small states with a potential mechanism to bind more powerful states to mutually recognized rules, developing countries may seek to strengthen the procedural dimensions of multilateral institutions. Clear and strong multilateral rules cannot substitute for weakness, but they can help ameliorate some of the vulnerability that is a product of developing countries’ position in the international system. This article uses the contemporary international politics of intellectual property rights (IPRs) as a lens to examine North-South conflicts over international economic governance and the possibilities of institutional reform. Lacking the power to revise the substance of the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), developing countries, allied with a network of international public health activists, subsequently designed strategies to operate within the constraining international political reality they faced. They sought to clarify the rules of international patent law, to affirm the rights established during the TRIPS negotiations, and to minimize vulnerability to opportunism by powerful states. In doing so the developing countries reinforced global governance in IPRs.

The Politics of Patents and Drugs in Brazil and Mexico: The Industrial Bases of Health Policies

This up-to-date book examines pharmaceutical development, access to medicines, and the protection of public health in the context of two fundamental changes that the global political economy has undergone since the 1970s, the globalization of trade and production and the increased harmonization of national regulations on intellectual property rights.

Health Policy as Industrial Policy Brazil in Comparative Perspective

In contrast to analyses that regard health policy and industrial policy as anathema to each other, either because an emphasis on health implies neglect of industry or because gains in industrialization come at the expense of health, we show positive synergies between the two realms. Government intervention into the health sector can catalyze interventions to promote industrial development in the pharmaceutical sector, which in turn can make health policies more effective. We focus on two pathways by which health policies can trigger industrial policies. A demand-driven pathway entails government commitments in health revealing weaknesses and deficiencies in pharmaceutical production, and thus inspiring efforts to build capabilities to stabilize the flow of drugs to the public sector. A regulation-induced pathway consists of sanitary policies revealing mismatches between what is required for firms to continue to participate in the market and pharmaceutical producers’ prevailing levels of capabilities, and government measures then being developed and deployed to address the mismatch. We demonstrate both pathways with the case of Brazil.

Orphaned by democracy: small industry in contemporary Mexico

After introducing pharmaceutical patents in the 1990s, Brazil subsequently adjusted the patent system to ameliorate its effects on drug prices, while Mexico introduced measures that reinforce and intensify these effects. The different trajectories are due to the nature of the actors pushing for reform and the patterns of coalitional formation and political mobilization. In Brazil government demand for expensive, patented drugs made health-oriented patent reform a priority. The existence of an autonomous local pharmaceutical sector allowed the Ministry of Health to build a supportive coalition. In Mexico government demand made reforms less urgent, and transformations of the pharmaceutical sector allowed patent-holding firms to commandeer a reform project. The existence of indigenous pharmaceutical capacities can broaden the political coalitions underpinning health reforms.

Challenges to India's pharmaceutical patent laws

An Indian Supreme Court decision about variants of existing compounds could affect access to affordable drugs. The Indian Supreme Court will soon hear final arguments in a challenge by the pharmaceutical company Novartis against the Indian Patent Offices (IPO) rejection of a patent for the leukemia drug Glivec. We discuss key issues, particularly the patentability of new compounds versus variants of existing compounds, and how the outcome of the case might affect patent terms and access to drugs in the developing world.

The Political Contradictions of Incremental Innovation: Lessons from Pharmaceutical Patent Examination in Brazil

Neodevelopmental patent regimes aim to facilitate local actors’ access to knowledge and also encourage incremental innovations. The case of pharmaceutical patent examination in Brazil illustrates political contradictions between these objectives. Brazil’s patent law includes the Ministry of Health in the examination of pharmaceutical patent applications. Though widely celebrated as a health-oriented policy, the Brazilian experience has become fraught with tensions and subject to decreasing levels of both stability and enforcement. I show how one pillar of the neodevelopmental regime, the array of initiatives to encourage incremental innovations, has fostered the acquisition of innovative capabilities in the Brazilian pharmaceutical sector, and how these new capabilities have altered actors’ policy preferences and thus contributed to the erosion of the coalition in support of the other pillar of the neodevelopmental regime, the health-oriented approach to examining pharmaceutical patents. The analysis of capability-derived preference formation points to an endogenous process of coalitional change.

Resources, Rules and International Political Economy: The Politics of Development in the WTO

This collection of essays from leading academics examines the connection between the World Trade Organization (WTO) and human rights issues, a topic which has provoked significant debate, particularly in the decade since the collapsed WTO talks in Seattle in 1999.

The politics of patents and drugs in Brazil and Mexico: the industrial bases of health policies

This up-to-date book examines pharmaceutical development, access to medicines, and the protection of public health in the context of two fundamental changes that the global political economy has undergone since the 1970s, the globalization of trade and production and the increased harmonization of national regulations on intellectual property rights.