1

Regional Integration and Health Policies:

Regulatory Governance Challenges in Mercosur

Andrea C. Bianculli (Institut Barcelona d’Estudis Internacionals)

Andrea Ribeiro Hoffmann (Freie Universität Berlin)

Paper prepared to be presented at:

FLACSO-ISA Joint International Conference

“Global and Regional Powers in a Changing World”

Buenos Aires, 23-25 July 2014

University of Buenos Aires, School of Economics

Draft – Please do not quote without permission

___________________________________________________________________________

Introduction

Latin American countries in general and Mercosur member-states in particular share largely a

common characteristic. On the one hand, there is a generalized expectation that the state

should be the main provider of public goods, which are sometimes even given the status of

fundamental rights, as in the case of health in Brazil and Paraguay. On the other hand, states

evidence a historical incapacity to provide these goods efficiently, mainly because of a

succession of economic crises and poor public administration. The gap between these

expectations and efficiency varies according to country and period of time, but a general trend

is discernible [Almeida et al. 2010; Pires-Alves et al. 2012].

This paper investigates to what extent regional organizations such as Mercosur have

reproduced this gap in the area of health, or if, alternatively, they have provided windows of

opportunities to policy innovation and promoted win-win cooperation initiatives, representing

a value added to national health policies and contributing thus to more efficient systems of

health governance in the region.

2

Regional cooperation in health has some tradition in Latin America,1 but it is a new

development in Mercosur. Mercosur was created with the main aim of promoting economic

cooperation. Already in 1986, with the signing of the Program of Economic Integration and

Cooperation between Brazil and Argentina (PICE), both countries aimed to create the

necessary conditions for a common market. In 1991, this led to the establishment of an

integrated regional market, which was thus initially based on trade liberalization. This initial

focus on the regulation of free trade changed over time.

Despite the existence of some initiatives in the area of health during the 1990s, it was only

in the mid-2000s, with the consolidation of a social agenda in Mercosur, that health became a

more central policy area. With the so-called ‘left turn’ in member-states, Mercosur was

transformed from a (liberal) trade block into a multisectorial organization within a new

paradigm under the lead of Presidents Lula da Silva from Brazil, Nestor Kirchner from

Argentina and Tabaré Vázquez from Uruguay [Castañeda 2006].

In economic terms, Mercosur entered a new phase advancing macroeconomic and

industrial cooperation, especially in the infrastructure sector, in coordination with the

Initiative for the Integration in Regional Infrastructure in South America (IIRSA) [Briceño-

Ruiz 2010]. This new phase has also been described as one of post-hegemonic regionalism

[Riggirozzi & Tussie 2012] or post-liberal regionalism [SELA 2010; Veiga & Rios 2007].

The new economic orientation in Mercosur came hand in hand with a concept to move the

integration process beyond economic issues and advance the social agenda significantly,

including areas such as culture, education and health. The social agenda was further

consolidated with the creation of the Social Institute in 2007.

1 In fact, the world’s oldest international public health agency was established in 1902: the Pan-

American Health Organization (PAHO), which provides “technical cooperation and mobilizes

partnerships to improve health and quality of life in the countries of the Americas”. PAHO is the

specialized health agency of the Inter-American System and serves as the Regional Office for the

Americas of the World Health Organization (WHO). Together with WHO, PAHO is a member of the

United Nations system, for further details see

http://www.paho.org/hq/index.php?option=com_content&view=article&id=91&Itemid=220&lang=en,

last accessed 15 June 2014.

Other initiatives involving some of the current Mercosur member-states include the Andean Health

Organization/ Hipólito Unanue Agreement within the Andean Pact – now Andean Community –

signed in December 1971, with the participation of Bolivia, Colombia, Chile, Ecuador, Peru and

Venezuela [Sánchez 2007:156]. The Caribbean Community was also one of the regional blocs that

first implemented initiatives in the health field [Carrillo Roa & Santana 2012; SELA 2010]. Within the

Organization of American States (OAS), health issues have found a place in the organization’s agenda

through the Summits of the Americas. Currently, this involves the monitoring and reporting on the

mandates in the area of social development by the Summit of the Americas Implementation and

Follow-up System (SISCA), and through the Executive Secretariat for Integral Development.

3

In sum, this paper explores the role of Mercosur in the provision of health policies and

regulation in order to assess to what extent it can contribute to address the ‘health gap’ in the

region. With this aim, it firstly traces the process of institutionalization of cooperation in the

area of health in Mercosur, including the policy and regulatory frameworks and activities

being promoted. The second section discusses the main characteristics of Mercosur member-

states’ national systems of health in comparative terms. Since harmonization has so far

constituted the main mechanism of regional health cooperation, it is essential to know how

domestic systems work. To this end, the role of member-states in the regional cooperation is

also analyzed. Finally, the main regulatory governance challenges for a successful regional

health policy are discussed.

1. Institutionalization of cooperation in the area of health in Mercosur

This section explores the process of institutionalization of health in Mercosur, an area in

which regional policies and regulations made a concrete impact. The analysis includes a

preliminary examination of the main actors that were active in this process according to the

available secondary literature, and the policy frame and patterns of regulatory policy

diffusion.

The Treaty of Asuncion (signed in March 1991, in force in November 1991) does not

refer to health, but the provisional structure laid down included a commission on health

products in the Working Group on Technical Norms (SGT 3) (GMC Resolution 51/1992)

[Sánchez 2007:157]. The main objective was to discuss the harmonization of sanitary norms

to abolish technical obstacles and allow the free movement of food and health products

[Acosta et al. 2007]. More specifically, the SGT 3 dealt with pharmaceuticals and blood

products, blood, cosmetics and disinfectants [Guimaraes Queiroz & Giovanella 2011:184].

The Protocol of Outo Preto (signed in December 1994, in force in December 1995)

established Mercosur’s permanent institutions and decision-making procedures, based on an

intergovernmental structure. The main organs created were the Common Market Council

(CMC), the Common Market Group (CMG), the Trade Commission (TC), the Joint

Parliamentary Commission (JPC), the Economic and Social Advisory Forum (ESAF) and the

Administrative Secretariat (AS).

4

The CMC is the highest-ranking and main legislative body, responsible for political

direction: it is composed of the ministries of finance/economy and foreign affairs. At least

once a year Presidents are also present. Its decisions, agreed by consensus, are mandatory,

while it can also agree on (non-mandatory) recommendations. The CMG is the executive and

implementing organ, coordinated by the Ministers of Foreign Affairs, Economy and the

presidents of the Central Banks. It agrees on mandatory resolutions. The main functions of the

TC include proposing, monitoring and implementing trade norms and regulations that will

assure the functioning of the customs union, and to this end, it also issues mandatory

directives and proposes common trade policies when negotiating with external partners. The

ESAF was created as a body representing the social and economic sectors, where employers

and civil society organizations play a relevant role.

With its headquarters in Montevideo, the AS mainly performs administrative and

supporting functions; its director is elected by the CMG for a mandate of two years. In all the

AS’ powers are rather weak and has hence a rather limited role. Still, in 2002, it was decided

to expand the AS to turn it into a technical body (CMC Decision 16/2002).2 Finally, the JPC

made up of legislators from the member countries was upgraded into a Regional Parliament,

which began to work in 2006 and has a seat in Montevideo as well. Despite the increase of

competences from the JPC, it has so far no legislative powers.

To develop the bloc’s multiple tasks, the institutional structure also comprises a large

number of Technical Committees, Working Groups and Ad Hoc Groups, all of which deal

with specific areas of policy such as industry, competition, environment, co-operation,

agriculture and customs. In addition, specialized sectoral meetings at the ministerial level

propose policy initiatives in specific areas.

Health policy was one of the topics for which a Meeting of Health Ministers of

Mercosur (RMS) was established already in 1995 (CMC Decision 03/1995). Made up of the

national health ministers, this meeting also involves the participation of the associated

member-states as observers3 and of the PAHO

4 as technical-advisory body. The RMS is the

2 To this end, a small Technical Advisory Sector was created in 2003.

3 Associated member states have free trade agreements with Mercosur and participate as observers in

all organs; despite the lack of a formal right to vote, they do have a considerable influence in the

process of consensus making. Mercosur associated member-states include Bolivia (1996), Chile

(1996), Peru (2005), Colombia (2004) and Ecuador (2004). Venezuela became full member in 2013,

whereas Bolivia concluded a treaty of accession to become a member-state in 2012, not yet ratified

and hence still not in force.

4 See footnote 1.

5

hierarchically superior instance at the political level and responsible for the definition of the

bloc’s policy and strategies in the area of health. It is thus related to the CMC. The RMS

offers an institutional space for the discussion of macro policies, regulations and strategies in

the area of health for Mercosur and defines negotiating guidelines based on projects and

common work-plans through the different joint (intergovernmental) commissions in several

areas. Most of the regulations issued deal with public health surveillance, control and

standardisation of sanitary products.

In a similar vein, though from a technical approach to health policy, in 1996, the CMG

approved the creation of the Working Group on Health (SGT 11) (CMG Resolution

151/1996) and established its working plan (CMG Resolution 04/1998).5 This working group

brings together leaders, specialists and technical experts from the national ministries and other

related public bodies. Its main objective is the harmonization of legislation and guidelines in

the policy areas already defined, to promote technical cooperation and joint actions among

member states in health care services, goods, commodities and products, epidemiologic and

sanitary surveillance and controls [Acosta et al. 2007]. Thus, the SGT 11 aims to support and

protect health, while allowing for the dismantling of existing obstacles to regional trade and

comprehensive and quality health care [Guimaraes Queiroz & Giovanella 2011].

The SGT 11 covers three main areas: health products, health surveillance and health

care services. Each of these policy areas are dealt with in specialized commissions, which

pursue specific objectives and policy items and are structured into sub-commissions and ad

hoc groups. Furthermore, these three main health commissions are guided by particular

negotiating mandates, underscoring the need to articulate national systems through

cooperation, common initiatives and professional development. Building upon common

interests and the policy areas prioritized by member countries, these mandates frame the

working of the SGT 11 and establish its relations with other decision-making bodies of the

bloc, together with proceedings to organize, systematize and circulate information.

Negotiating mandates have changed through time, showing a move beyond trade

liberalization to increasingly broaden and deepen its regulatory scope. Thus, while the first

mandate (1998) was intended to harmonize quality parameters in terms of good, services and

productive factors in the area of health, the latest one (2007) promotes the harmonization of

5 The direct antecedent was the Sub Commission 11 until 1995, which then turned into the Subgroup

10, opening thus a space for the creation of SGT 11.

6

legislation and guidelines to achieve technical cooperation and coordinate joint activities

between member states [Guimaraes Queiroz & Giovanella 2011:185].

Resolutions coming from the SGT 11 have to go through a long process before they

become in force. Once consensus is reached, resolutions have to be transposed at the national

level, and only then, they can be implemented at Mercosur level.6 Apart from the fact that this

decision-making process remains strictly intergovernmental, there are still strong differences

across national health ministries in terms of their competences, organization, management and

funding. In turn, this affects the regional process of harmonization of health policies.

Difficulties in this area are illustrated by the various degrees of advancement across the

different commissions.7

The Commission on Health Products and Medicaments has moved forward in the area

of cosmetics,8 and in the elaboration of regional norms in the area of good practices for the

production of medicines and the training of inspectors for verification of these practices.

Second, the large number of regulations established by the Commission of Health

Surveillance, which includes issues related to the free movement of products to allow the

common market, could be explained by previous processes of international harmonization,

which in turn could have facilitated consensus at the regional level [Guimaraes Queiroz &

Giovanella 2011]. Finally, advancements within the Commission of Health Services have

been hindered by the vagueness and imprecision of its own competences [Sánchez 2007:157-

159]. In all, regional agreements in these last two areas seem to be harder to achieve because

of important asymmetries and differences across the health systems, policies and regulations

of member countries.

Table 1 presents how the various commissions have promoted regulatory

harmonization across policy issues.

6 For a detailed analysis of the institutional process within the SGT 11, see Ministerio da Saude

[2002].

7 In 2006, the SGT 11 issued 107 resolutions: 85 (79%) from the Commission of Health Products, 16

(15%) of the Commission of Health Surveillance and six (6%) from the Commission of Health

Services [Guimaraes Queiroz & Giovanella 2011:186].

8 In the case of the Association of Southeast Asian Nations (ASEAN), progress in this policy area was

closely related to the negotiation process with the European Union (EU) [Pente 2013].

7

Table 1: Regulatory harmonization in the Commissions of the SGT 11, 2006

Commission Topics harmonized

Health products and

medicaments

Cosmetics

Disinfectants

- Registers, best practices in production, control and

distribution, joint inspection of pscicotropic substances

and narcotic drugs, import and export licenses, technical

regulation of control and monitoring, and control in free

zones and special customs areas

- Registers, definition, glossary, lists of substances

allowed or restricted or of prohibited use, and best

practices of production and control

- Registers, definitions, glossary, best practices of

production and control

Health services

Professional development

and practice

Technology

- Glossary of common terms, requisites to the habilitation

of emergence mobile health units, intensive adult

therapy, and basic information for children health pass

- Medical specializations and minimal matrix for

professional health register

- Methodologies for validation of health technologies

Health and epidemiological

surveillance

Glossary, definition of suspected and confirmed cases,

consolidation, measure to control of people travelling, use of

International Sanitary Regulation, and information and control

of Severe Respiratory Acute Syndrome (SARS), among others

Source: Guimaraes Queiroz and Giovanella [2011:186].

From a political standpoint, the RMS proposes measures to coordinate health politics at

Mercosur level (CMC Decision N° 3/95). As a regional body of political cooperation, the

RMS establishes programs, strategies and guidelines based on the common views of member-

states and it promotes agreements among health ministers. However, these agreements do not

need to be transposed into domestic legal orders: they constitute joint actions to enhance

promotion, prevention, protection and health care.

To deal with the dense agenda, the RMS consists of various intergovernmental

commissions. These are composed of leaders and technical experts from the member-states,

8

bringing to the commission national policy issues to deal with at the regional level. As Table

2 shows, the policy issues brought to the RMS have increasingly expanded and broadened

since 2000. Even if discussions and negotiations do not always end in agreement, the agenda

of the RMS has broadened the political debate moving from strategies on communicable

diseases and product surveillance to issues more closely related to health promotion and

protection.

Table 2: Health topics addressed in the intergovernmental commissions

of the Meeting of Health Ministers, 2000-2007

Source: Guimaraes Queiroz and Giovanella [2011:184].

9

The RMS and the SGT 11 were for a long time the only bodies responsible for health

cooperation in Mercosur and have worked rather closely since. However, starting in the

2000s, as social issues, namely social development and inclusion, poverty reduction and the

reduction of regional inequalities, became to be prioritized; emphasis was increasingly placed

on the social dimension of regional integration.9 Building on this prioritization of the so-

called social agenda, other bodies were created with an impact on health cooperation, the

most important being the Mercosur Social Institute (ISM).

The ISM was created in 2007, following an initiative of the Meeting of Ministers and

Authorities of Social Development of Mercosur (CMC/Decision Nº 03/07). The institute

works as a technical and political body in the area of social policy, with a clear mandate to

elaborate regional social policies and strategic guidelines to reduce social asymmetries among

member countries and promote integral human development. Based in Asunción, Paraguay,

The ISM is expected to promote the consolidation of the social dimension of Mercosur.10

2. Regulatory governance of health in Mercosur member-states

In order to discuss the governance challenges in Mercosur it is necessary to understand how

health is dealt within its member-states. The capacity of a regional organization to reach

consensus on regional policies and of their member-states to implement and comply with

these policies, depend to a large extent on their policy preferences and action capacities, and

the extent to which they fit with the regional policies [Börzel 2002].

This section briefly presents the main characteristics of Mercosur member-states

health structures, policies and regulations.11 The tables below show how health is

incorporated in their domestic regulatory orders, the main characteristics of the domestic

health systems and the budget allocated to health. A first look at these data shows that

Mercosur member-states have very diverse approaches to health.

9 With the so-called Buenos Aires Declaration, social issues gained a place on the Mercosur agenda.

These included different initiatives such as Somos Mercosur, the organization of Mercosur summits of

social actors and the creation of a Structural Convergence Fund (FOCEM), among others.

10 For further details see http://ismercosur.org/, last accessed 10 June 2014.

11 Only the four original full member-states are included; see note footnote 3 about the status of

Bolivia and Venezuela.

10

Table 3: Health in the domestic legal order

Member-state Domestic legal order

Argentina Weak constitutional treatment of the right to health until 1994, when the

constitutional reform recognized the safeguard and protection of health

consumer relations (Art. 42), but more important still is the full recognition

of the right to health by giving precedence to international agreements over

domestic law.

Brazil Health is a fundamental and universal right in the 1988 Constitution

(Art.196).

Paraguay Health is recognized as a basic right in the Constitution (Art.68-69), and

health sector legislation guarantees health promotion and protection to all

citizens.

Uruguay Right to health is recognized in the Constitution (Art. 44), but it is defined

as a responsibility of the individual; the state has thus only a subsidiary

responsibility in legislating all health- and public-hygiene-related issues and

providing prevention and care services free of charge only to the people

who cannot afford them. The state also plays a role in the regulation of

private service.

Source: Own compilation.

Table 4: The governance of domestic health systems

Member-state Domestic health system

Argentina The health system relies today on a mixed of public, co-operative and social

health care organizations (‘obras sociales’) and private schemes.

Brazil

The national public system is free to all citizens through the Unified Health

System (SUS). Private health services are widespread given the lack of

effectiveness of the SUS.

Paraguay Paraguay’s National Health System (NHS) is regulated by Law No.

1032/96, which establishes the provision of health services through the

11

public, private, and mixed subsectors, health insurance programs and

universities (Art. 4).

Uruguay

Health protection is historically based on mandatory private insurance,

though the public health care system provides for people who cannot afford

to pay for private health care. The most popular option has traditionally

been a hospital plan called ‘mutualista.’

Source: Own compilation.

Table 5: Budget allocated to health

Source: Own elaboration based on the Pan American Health Organization, Health

Information and Analysis Project website (last accessed 10 June 2014) and Sánchez

[2007:162]. Years are indicated between brackets.

Argentina

Contrary to other social rights, the right to health did not have an adequate constitutional

treatment in Argentina until recently [Abramovich & Pautassi 2008]. However, despite this

constitutional shortcoming, building on the idea of health coverage as universal policy, in

practice Argentina developed a public health system based on an extensive network of public

health facilities and a system of social health care organizations (‘obras sociales’) for formal

workers.

Member-state Annual national health

expenditure as a

proportion of the GDP

[%] (Public)

Annual national health

expenditure as a

proportion of the GDP

[%] (Private)

Physicians’ ratio

[10,000 hab.]

Argentina 5 (2005) 3,2 (2012) 32,1 (2004)

Brazil 3,6 (2005) 3,7 (2012) 15,1 (2010)

Paraguay 4,9 (2012) 3,2 (2010) 16,2 (2012)

Uruguay 5,4 (2011) 5,2 (2011) 47,0 (2012)

12

Only in 1994 with the latest constitutional reform, did the state recognize the

safeguard and protection of health through various means. First, health protection is

mentioned in relation to consumer relations in Article 42. Still, this does not entail universal

guarantees and thus fails to cover the current idea of the right to health adequately, its content

and scope as defined in the international human rights law. In fact, it is by giving precedence

to international agreements over domestic law that the right to health care and protection is

now guaranteed in Argentina [Abramovich & Pautassi 2008].

Nevertheless, this full recognition of the right to health came at a time when the long-

standing health system was being dismantled through structural reform and decentralization

programs. Furthermore, starting in the 1990s, the paradigm of universalism of health

provision was increasingly questioned. Within this ideational and material context, the health

system in Argentina relies today on a mixed of co-operative, public and private and other

health schemes [Holst 2009], which are poorly coordinated [Loianno et al. 2008]. First, the

public system is responsibility of the state: national, provincial and municipal. Given the

differences across these various governmental levels, the health services vary a great deal in

terms of quality and quantity. Second, social health care organizations (‘obras sociales’) are

still in charge of a large part of the health system, even if because of the labor reform the

market is no longer ruled by a logic of formal paid work, but rather by one of flexibilization

and precarious working conditions. Finally, there is a private health system led by pre-paid

medicine companies and which includes private sanatoriums and clinics, and mutual health

insurance as well.

Despite these shortcomings, the Argentina health system still ranks high in the region,

together with Chile and Uruguay [Loianno et al. 2008] to the extent that citizens from other

countries come to Argentina to continue or start their medical treatments in public hospitals.

During the last 10 years, the government launched a vast and varied range of

initiatives to address social rights. In terms of health policy, while the national ministry

gained a more central role in the policymaking process [Repetto & Chudnovsky 2009] and an

increased budget for health [Kliksberg 2008], there was a strong attempt at strengthening the

public health system to guarantee equal and universal access for the whole population.12 This

included among other policy components, prevention and primary health care and a new

12 Ushered by the 2001-2003 crisis, the President Néstor Kirchner launched a Federal Programme of

Health (PROFE) in 2004 to provide life-time non-contributory protection against health risks to the

most vulnerable population.

13

National Law of Prescribed Drugs through their generic names (Law 25.469), implemented

through the Remediar Program.

Within this general frame, in 2004 Argentina broadened migrants’ access to social

benefits [Holst 2009]. The new Migration Law 25871, which was approved in December

2003, adopted in January 2004 and finally enacted in May 2010, underscores migration as an

essential human right and migrants as subject of law [Domenech 2007]. Furthermore, the state

is obliged to guarantee this right based on the principles of equality and universality (Art. 4).

The Law guarantees hence access to public services, including health, education,

justice, labor, employment and social security, irrespective of their immigration status and

even in situations of ‘irregularity’ (Art. 7 and 8). Finally, the law is also quite innovative as it

extends the notion of citizenship to Mercosur member states and associated member states,

thus building on an idea of ‘communitarian identity’ [Domenech 2007]. Even if the law

continues to establish residency according to traditional criteria such as work, study and

family ties, through its ’nationality criteria (Art. 23-l), it authorizes citizens of the bloc to

remain in Argentina for a period of up to two years, which can be extended with multiple

entries and exits.

In terms of South-South international cooperation, Argentina is involved in several

initiatives taking place at various governmental levels. These include bilateral reactions

through agreements with Health Ministries in other countries, and regional and subregional

relations through the SGT 11 and the RMS at the Mercosur level, which is complemented by

Argentina’s active role at the South American Health Council / Unasur Salud. In terms

international organizations, Argentina is part of the governing bodies of both the PAHO and

WHO.13

This active role in different regional and international institutions reflects, in fact, the

country’s special emphasis on South-South and triangular cooperation, which has been

underscored as a priority within its foreign policy [OPS/OMS 2012]. In fact, already in 1992,

the country established the Argentine Fund for Horizontal Cooperation (FO.AR), through

which the country intends to strengthen technical assistance to other developing countries.

Under the coordination of the Directorate General for International Cooperation of the

Ministry of Foreign Affairs, this fund promotes sharing national experiences and knowledge

with different developing countries. Even if health is one of the many policy areas included in

13 The PAHO/WHO established a regional office in Argentina already in 1951.

14

this instrument, the FO.AR14 covers different subjects that contribute to the fulfillment of the

Millennium Development Goals. In terms of health policy, actions have been carried out to

reduce child mortality, impose maternal health and fight against HIV, tuberculosis, Chagas

disease, malaria and other illnesses [PAHO/WHO 2009:10-11].

Actions have been carried out not only in Latin America, but also in Africa and Asia.

Agreements and actions carried out together with PAHO/WHO include technical assistance in

endeavors such as polio eradication in the Nigerian child population, technology transfer and

strengthening of hospital services in Algeria, together with cooperation on prevention policies

for the eradication of malaria in Ghana and prevention and treatment of HIV/AIDS (especially

prevention of vertical transmission) in Lesotho. This has run parallel to the promotion of

development relations with Haiti, and the implementation of strategic cooperative initiatives

in English-speaking countries under CARICOM, namely, the strengthening of the policies for

the regulation of medicines.

Within Mercosur, South-South cooperation has focused on strengthening regional

integration and reducing asymmetries. Thus, for example, Argentina established a program to

strengthen capacity relating to organ transplants in Paraguay, together with an initiative to

build up the Health Surveillance Authority in that country. Additionally, the country has been

actively involved in a project directed towards prevention, attention and support to people

with HIV in border areas of Mercosur.

The National Ministry of Health is also involved in cooperative initiatives. With a

particular emphasis on Mercosur and its member-states, it has established technical

cooperative projects with the Escuela Politécnica de Salud Joaquim Venâncio (EPSJV) and

the technical and scientific unit of the Oswaldo Cruz Foundation, being the focus the

professional development of experts in priority policy areas.

Brazil

Among Mercosur member-states, Brazil has taken a very active role in the area of health.

Against the wave of liberalization in the 1980s and 1990s, health sector in Brazil was kept

under the responsibility of the state. In 2003, the Brazilian Ministry of Health and the

14 The FO.AR is funded by the Argentine Foreign Office, the OAS and the International Organization

for Migration (OIM). For further details on the content, scope and programs developed under FO.AR,

see MRECIC [2010].

15

Representation of the PAHO-WHO15 in Brazil proposed the Program of Diffusion and

Exchange on Health Reform (Programa de Difusao e Intercambio sobre Reforma Sanitaria).

The idea was to promote a discussion at the international level about the Brazilian health

system and the exchange of best practices in South-South cooperation. The latter was to be

promoted under the paradigm of ‘structural cooperation in health’, in which horizontal

cooperation replaced the hierarchical nature of North-South cooperation and the unilateral

transfers of ready-made packages [Almeida et al. 2010]. In this context, a cooperation

agreement was concluded in 2006, the Technical Cooperation Agreement 41 (TCA-41),

between the Ministry of Health, PAHO/WHO and the Osvaldo Cruz Foundation (Fiocruz)16

[Pires-Alves et al. 2012:445].

The impact of the TCA-41 was favored by the prominence of South-South

Cooperation in the Brazilian foreign policy. In addition to cooperation in Latin America

(Mercosur and Unasur), health has been addressed in the relations with the Portuguese

Speaking Countries in Africa (PALOP), the Community of Portuguese Speaking Countries

(CPLP), with other emerging countries in the IBAS forum (India, Brazil and South Africa)

and more recently within the BRICS (Brazil, Russia, India, China and South Africa).

A concept of health diplomacy has been defined, in which cooperation between the

Ministry of External Relations (Itamaraty) and the Ministry of Health has been intensified.

Examples of cooperation activities are the support to education institutions of public health,

the creation of master degrees in public health, support to the development of strategic plans

in the areas of health and the creation of pharmaceutical industries [Almeida et al. 2010;

Pires-Alves et al. 2012]. Health diplomacy has also been discussed at the global level such as

in the context of the Global Health and Foreign Policy, which took place on Oslo in 2007. The

Oslo Ministerial Declaration, signed by Brazil, France, Indonesia, Norway, Senegal, South

Africa and Thailand, stated that ‘health is one of the most important long-term foreign policy

issues of our time’ [Almeida et al. 2010:24].

15 See http://www.paho.org/bra/, last accessed 10 June 2014.

16 Fiocruz is a public foundation that promotes research, teaching, production and technological

development in the area of public health. Its origin dates from 1900, see

http://portal.fiocruz.br/en/content/home-ingl%C3%AAs; last accessed 10 June 2014. Fiocruz has

become a central institution from strategic formulation to the implementation of cooperative initiatives

in the context of TC-41. In 2008, it opened a regional office in Maputo, Mozambique via an agreement

with the African Union, and in 2009, it established the Center for International Relations in Health

(CRIS) [Pires-Alves et al. 2012:448].

16

Regarding Mercosur, the Brazilian Health Ministry created the Permanent Forum to

the Work in Health in 2006. The main aim of the forum is to propose recommendations to

promote health cooperation in Mercosur, with special attention to border areas. There are

three working groups: professional education, labor regulation and political organization of

the health sector [Kölling & Camargo Massaú 2010:48].

Furthermore, health policy towards Mercosur has increasingly become intertwined

with the one towards Unasur since its creation in 2008. Brazil has issued a South American

Health Agenda at Unasur. This includes several initiatives, namely a South American

epidemiological shield (early detection and response to outbreaks, elimination of

communicable diseases), universal health systems (development of health systems that assure

peoples’ universal right to health, based on a comprehensive primary health care approach)

and universal access to drugs and medications (South American drug policy, health

production complex). Initiatives at this level refer to: 1. Health promotion and social

determinants of health (setting up the South American Commission on Determinants of

Health, implementing intersectoral measures to address the social determinants of health); 2.

Human resources management and development (assessment of progress by sub-regional

groups in identifying the capacities and knowledge necessary for training human resources),

3. Establishment of the Unasur Health Scholarship Program and the South American Institute

of Health Governance (ISAGS), whose mission is to develop innovation for health

governance and to prepare high-level personnel to lead health systems in the region [Almeida

et al. 2010:28].

Another project developed by the Brazilian Ministry in South America is the

Integrated System of Health in the Borders (SIS-Fronteira). Created in 2005 (Portaria GM

1.120/05), it was expanded to the whole border area of Brazil by 2010 [Kölling & Camargo

Massaú 2010:47].17 The creation of SIS suggests that an important factor that might drive

future cooperation in the area of health in Mercosur is Brazil given that this country presents

the most generous health system, based on universal access. Despite the fact that there is no

free circulation of peoples in Mercosur, borders are not fully controlled. Illegal immigration

and illegal use of the SUS is a practice widely acknowledged. As Agustini and Ribeiro

Nogueira [2010] show, the lack of clear criteria to treat foreigners in SUS, is reflected in the

diversity of interpretations of the rights to access to health services. This leads to ad hoc

17 See http://portal.saude.gov.br/portal/saude/profissional/area.cfm?id_area=1228, last accessed 10

November 2013.

17

selectivity on part of the professionals and informal relations, which become more relevant

than formal regulations. These practices hinder the planning of an effective regional health

policy; SIS addresses this problem by transferring resources to the border areas to compensate

for the additional number of people being attended in the health system. In order to estimate

the local necessities, partnerships with local authorities and federal universities were

concluded. The first phase of the project covered the Southern borders, with Argentina,

Bolivia, Paraguay and Uruguay; the second phase included Northern borders.

Paraguay

The 1992 constitution establishes the right to health and the state’s responsibility to protect

and promote health (Art. 68 and 69). Even if the basic values assumed by the health sector are

universal coverage, the comprehensiveness and equality of benefits, solidarity, and social

responsibility, by 2005, 35.1% of the population remained excluded from these rights due to a

series of shortcomings in the current institutional and regulatory health mechanisms [USAID

& PAHO 2009]. In fact, Paraguay provides a set of schemes for about 20% of the population

[Holst 2009].

The national health system is regulated by Law 1032/96, which establishes the

mechanisms governing the offer of health services of public, private and mixed subsectors,

insurance programs and universities (Art. 4). The aforementioned law created the national

health system in Paraguay, while two years later Decree No. 19966/98 established the

guidelines for the decentralization of the sector. Further decrees were intended to regulate

other public health public offices as in the case of the Superintendence of Health, the

reorganization of the structure of the Ministry, and the Creation of the Health Authority as the

agency responsible for technical control and national supervision of the health system, among

others.

In all, the implementation of health policy relies in the hands of the Ministry of Public

Health and Social Welfare, which is responsible for sectoral programs and activities that will

determine both public and private actions in this policy field (Decree 21376/98). The ministry

is also in charge of financing and is the main provider of health services. Additionally, as a

regulatory agency, the Ministry of Health and Social Welfare establishes health policy and

certifies health programs based on the health needs of the population. Program coverage is

18

nationwide and the country’s health services, both public and private, participate actively.

Nevertheless, the national health system presents a high level of fragmentation, overlapping

of actions between the Ministry and the Social Welfare Institute (IPS) and between this and

the private sector, in a context marked by the lack of institutional coordination across the

various subsectors implied [Loianno et al. 2008]. In turn, while this leads to duplication of

services in some areas, it also triggers deficiencies in quality and access to health services.

Furthermore, health insurance coverage, both that provided by the Institute of Social Welfare

and private insurance, is low and concentrated mainly in Asunción and the Central department

[PAHO 2013].

However, starting in 2008 some relevant reforms have been implemented as the left-

wing president Fernando Lugo came to power, and the government now advocated primary

health care strategy as the focal point of the entire national health system. First, since then

services provided at facilities run by the Ministry have been exempt from fees as part of the

government’s strategy for fighting poverty. Second, important administrative reforms were

also implemented in response to the national development plan and to a public policy

proposal for social development (2010–2020). However, most of the regulations have no

legislative support due to the minority standing of the executive branch in parliament, which

constitutes an important weakness [PAHO 2013].

Additionally, and from an international perspective, the political change that took

place in 2008 also triggered a significant transformation in Paraguay’s foreign policy,

including its stronger presence not only in Mercosur, but also in Unasur and the Ibero-

American Community of Nations. Taken to international cooperation in health, this is the

responsibility of a special unit set up within the Ministry of Health in 2006: the International

Relations Technical Unit (UTRI) whose main objective is to coordinate international technical

cooperation agreements by the Ministry.18 Whereas as put by the PAHO, the country lacks a

clear strategic cooperation agenda for the health sector, Paraguay has recently become

involved in different initiatives through UNICEF, PAHO and UNAIDS, among others, apart

from facilitating the mobilization of international resources through loans, as in the case of the

Inter-American Development Bank (IADB) and the World Bank. In the case of the IADB,

this was relevant to promote the acquisition of basic medical equipment in health

establishments. At Unasur level, for example, ISAGS was fundamental to assure the

18 For further details, see Resolución S.G. No.638/2006. Estructura Orgánica y Manual de Funciones

Unidad Técnica de Relaciones Internacionales.

19

implementation of national policies in the area of primary attention and the elaboration of

clinical protocols on the one hand, and in the challenges involved in promoting universal

health systems, on the other [ISAGS 2012].

In all, however, one could argue that Paraguay so far seems to have been a net receiver

of international cooperation in the area of health. Certainly, a clearer agenda in this respect

and the promotion of coordination mechanisms across the different offices and levels

involved in the provision of policies, regulations and services in this area are essential to

enhance the effects of these cooperation initiatives.

Uruguay

From a constitutional perspective, the right to health is narrowly defined in Uruguay and free

services are to be provided only under conditions of indigence [Loianno et al. 2008]. Building

on this, the Organic Law of the Ministry of Public Health (1934) was intended to provide free

services to indigents and poor people, and to promote health and the reduction of risk factors

among the population. From an international perspective, the connection of national policies

and regulations on health and the right to health to an international framework has remained

traditionally negligible.

A fundamental change, however took place in 2005, when as the left wing Frente

Amplio came to power, health was publicly acknowledged as the state’s responsibility. The

government has since tried to move beyond the restrictive constitutional conceptualization of

health as a duty rather than as a right as established in Article 44 [Borgia 2008]. It has

consequently proposed and enacted a reform of the health sector with a view to achieving

universal coverage with equity, which was preceded by an intense debate over the need to

reform the country’s health system (2003-2005). The system appeared to be inefficient to

cope with policy challenges as shown by its inability to respond and contain the rise in infant

mortality during the economic crisis starting in 2001, and due to institutional and financial

problems, among others [WB 2012].

In-depth reforms were undertaken in Uruguay in 2008 (based on Law No.

18.211/2007) to guarantee universal health coverage. The most important transformation was

the creation of the Integrated National Health System (SNIS), an ‘umbrella’ legal framework

establishing compulsory health coverage and offering the same benefit plan to approximately

20

95 percent of the population. The reform envisaged thus the gradual enrollment of

beneficiaries in the new SNIS up to 2016. The SNIS is based on – and gives priority to –

primary health care and includes a guaranteed portfolio of entitlements.

Additionally, the law, which governs the right to health protection, established the

mechanisms to implement and fund the new system, leading thus to the creation of two other

institutions. First, the National Health Insurance (SNS) was established, being this a unique

national insurance entity financed through a contributory scheme consisting of contributions

from employers, pensioners and workers based on income and household size. While the SNS

covers formal workers, it has also defined a policy of progressive extension to other social

groups. Second, these resources constitute the National Health Fund (FONASA, created by

Law No. 18.131/2007), and which finances first-level insurers. The state provides further

resources when FONASA’s contributions are insufficient. Finally, the National Health

Council is responsible for enforcing the right to health and ensuring observance of its guiding

principles.

In terms of the actors, the Ministry of Public Health is the agency responsible for

setting standards and regulating the health sector, developing prevention programs,

administering assistance and overseeing health policy. The reform has further strengthened its

role through creation of the National Board of Health. The latter is as a collegiate body

responsible for administering the SNS and the General Directorate of the Integrated National

Health System (DIGESNIS), which works as the technical agency of the SNIS.

The reform is perceived as having produced beneficial outcomes, including the

unification of health coverage and bringing together different national programs under a broad

single benefit plan and the substantive increase in the number of people enrolled under the

SNIS [WB 2012]. Nevertheless, from an institutional perspective, analyses have also

underscored that the health system in Uruguay is made up of an ensemble of institutions,

relying on different areas of expertise, objective and organizational structures, giving in turn

to a rather complex and fragmented system [Borgia 2008].

Taken to the regional and international cooperation arenas, Uruguay is actively

involved in Mercosur and Unasur and holds bilateral agreements, as in the case of the one

with Argentina in the areas of promotion and protection of health, medical technology, human

resources and health in border areas. Furthermore, the country has recently inaugurated the

International Centre on Cooperation in Tobacco Control, being this the third center of this

type together with the ones established in Australia and Finland. The center is managed by the

21

Ministry of Public Health, but also relies on the participation of the Ministry of Foreign

Affairs, the Uruguayan Agency for International Cooperation, the Ministry of Tourism and

Sports, and the Honorary Committee for the Fight against Cancer together with several non-

governmental organizations. Apart from cooperation provided to Ecuador and Paraguay in

this area, through this center, Uruguay will be capable of offering cooperation to any country

in the region. By creating this center, the government reaffirms its policy decision to defend

their policies and regulations on tobacco control as part of its responsibility in protecting the

population’s health rights.19

3. Regulatory governance challenges

The main question addressed in this paper is whether the health gap in Mercosur member-

states has been reproduced at the regional level, or whether Mercosur has provided a window

of opportunity for policy and regulatory innovation and promoted win-win solutions to

common problems.

The preliminary analysis conducted so far does not point to a very positive scenario.

On the one hand, Mercosur is less ambitious than its member-states, therefore the gap is not

as big; there are no high expectations that Mercosur could solve the policy and regulatory

problems of its member-states. On the other hand, Mercosur has given rise to new health

problems: economic integration has led to increased legal and illegal movements of people,

and created uncertainties regarding the use and regulation of national health systems,

especially in the border areas.

Mercosur faces several challenges. First, and from a domestic perspective, Mercosur

countries exhibit relevant differences in terms of the specific obligations of the state in

relation to ensuring health. Second, differences and heterogeneity also pervade their health

systems regarding universality, equity, coverage and attention, and the ways in which these

policies are organized, regulated and financed, ranging from the public contract model to

19 After passing a series of tobacco control laws and regulations on tobacco packaging in 2009, Philip

Morris challenged the regulations in Uruguay’s domestic courts, but the Supreme Court upheld them

as constitutional. Apart from the domestic constitutional challenge, Philip Morris affiliates complained

that Uruguay’s regulations constitute violations of a bilateral investment treaty between Switzerland

and Uruguay. An arbitration panel, established under the International Centre on Settlement of

Investment Disputes (ICSID), decided it had jurisdiction to hear this case in July 2013 and instructed

the parties to prepare substantive arguments in the case. A final decision on the merits is expected in

late 2014. In the meantime, Uruguay has received the support of the WHO.

22

atomised private systems [Holst 2009]. Furthermore, de-regulation through structural

programs of state reform has had a different scope and breadth, and hence affect the policy

area.

In the context of Mercosur, health has mainly advanced through the RMS and the SGT

11, each of which relies on a complex internal structure. Whereas the RMS works as a

political body, the SGT 11 assumes primarily a technical function. In fact, in the absence of

consensus, the SGT 11 turns to the RMS to make the final decision. The bloc lacks

coordinating mechanisms to make decisions in this policy area given that all institutions are

still intergovernmental.20 Still, the main challenge to Mercosur’s system of health governance

is the lack of a project clearly indicating how a regional health policy should look like.

Sánchez [2007:159] discusses five main options:

1) Coordination of services in border areas (being this the less ambitious model,

geographically restricted and not intended to alter national health systems);

2) Integration of services in border areas (moving beyond simple coordination towards

a joint institution to decide and implement the activities);

3) Free circulation of health professionals (including the recognition of graduate and

postgraduates degrees and specialization);

4) Free circulation of health system users, which might include tourists and non-

permanent residents;

5) Free circulation of services, either in the form of the habilitation of a service to

operate in another country, or to buy the services from another country.

Whereas Mercosur seems to be located primarily in the first case, other forms of

cooperation that should be assessed include attempts to harmonize national legislation and

regulations to advance the current state of each country and provide a mechanism that

contributes to overcoming internal difficulties, and promoting health as a regional public

good. This implies moving beyond negative integration through the removal of obstacles to

20 The participation of observer countries has also been uneven. Even if they take an active and

continuous role in the RMS, Bolivia has not participated at the SGT 11, and Chile has only been

present when discussing specific topics and of particular interest, especially with regard to monitoring

borders [Sánchez 2007]. On the contrary, since 2003, Venezuela presides the first meeting of

Mercosur Salud. For further details, see http://www.telesurtv.net/articulos/2013/06/14/venezuela-se-

hara-cargo-de-la-presidencia-del-consejo-de-salud-de-mercosur-6546.html;

http://www.mpps.gob.ve/index.php?option=com_content&view=article&id=4611:celebrada-primera-

reunion-presencial-de-mercosur-salud&catid=1:ultimas-noticas&Itemid=18, last accessed 1 November

2013.

23

trade and the free movement of health products and services, to the harmonization and

coordination of norms and standards, or the mutual recognition of each other’s regulatory

processes and standards. In all, this is expected to be a more complex task because moving

into ‘positive integration’ [Scharpf 1996] that introduces rights and inclusion through regional

policies reaches deep into governance arrangements, and member-states exhibit relevant

differences in the ways in which health is regulated, guaranteed and provided at the national

level. This is further complicated by the fact that just as in the case of education, health policy

can be understood as a purely market product or as a public good [Bianculli 2013].

Clearly, a final challenge to Mercosur derives from the choice on the part of member

states to use this regional institution as a locus for cooperation in health. Unasur ranked health

among its main areas of activities, being this tackled not just as a sanitary problem due to

transborder relations, but rather as a right to be pursued in interregional relations and global

governance diplomacy [Buss & Ferreira 2010; Riggirozzi 2014, in press]. In terms of

membership, Unasur include all Mercosur full and associated member-states plus Suriname

and Guyana. There are no clear-cut reasons why member-states would prefer to advance

health cooperation in Mercosur instead of Unasur.21 As seen in the previous sections, some of

the most promising examples of cooperation in health among Mercosur member-states, such

as SIS, have been conducted bilaterally anyway. In all, Unasur seems to be better positioned

to work as an umbrella organization to such initiatives and to promote deeper forms of

cooperation when consensus exists.

Thus, health governance would rely on relatively powerful and coordinating

institutions, whilst solving the current overload within Mercosur. Apart from the multiple

political and technical bodies, health policy today involves a great variety of issues and work

programs, all of which is expected to create significant coordination problems and in turn,

lack of concrete policy and regulatory outputs.

21 In fact, the Andean Health Organization-Convenio Hipólito Unanue is currently moving towards

greater articulation with Unasur, to promote South-American integration, presentation at the Reunión

Regional de Consulta: “Integración y Convergencia para la Salud en América Latina y el Caribe”

SELA, Caracas, Venezuela, 22-23 July 2010.

24

Concluding remarks

Recent developments in Latin America, but also in other regions, show the increased

awareness of the limitations of pursuing free trade policies and the need to include a social or

development dimension [Deacon et al. 2007; Holst 2009]. Still, there is a broad array of

policy options as to how to include or promote the social dimension of regional integration.

When it comes to the case of health policy in Mercosur, this paper showed that some

initiatives were taken in its early stage, with the creation of the Meeting of Health Ministers

(RMS) in 1995 and the Health Working Group (SGT-11) in 1996. Mercosur developed a

health agenda, which includes the harmonization of domestic legislations, creation of

common guidelines, and technical cooperation in the areas of health products, health

surveillance and health care services. The creation of the Meeting of Ministers and

Authorities of Social Development, and the Social Institute in 2007 reinforced the relevance

of health policy in the process of regional integration.

The main achievements in terms of bloc-wide agreements in health are mechanisms of

disease control and epidemic prevention, but cross-border accessibility of health services,

portability of social protection and equal social and labour conditions are not a priority yet.

Mercosur still primarily deals with coordination of services in the border areas, as a reaction

to the increase of legal and illegal transit of persons and the necessity to regulate the access to

health.

So far, Mercosur has failed to promote a regional regulatory approach tailored to its

member-states; the main hindrance for an effective health approach is the lack of a clear

definition of the model to be pursued to achieve integration in the regulation and provision of

health services. Moreover, domestic health systems are very different, and this limits the

possibility of achieving consensus on common norms and standards. Actually, member-states

have favored different approaches. Brazil has implemented a system to manage its borders,

though this remained as a strictly domestic project, which was not discussed at Mercosur

level. Border areas have also been the focus of the project promoted by Argentina through the

support of the PAHO/WHO.

In addition, and from a domestic perspective, together with universal access to health

provision guaranteed by Brazil, it is still to be seen the impact of the new migration law in

Argentina, which established the economic, social, political and cultural rights of migrants,

and gives preferential treatment to nationals of Mercosur. Clearly, regional integration in the

25

area of health policy can vary across a wide range of institutional and regulatory mechanisms,

ranging from minimalist strategies to deeper measures leading to the construction of a

regional social citizenship. The specific institutional path to the chosen remains a highly

political issue.

To sum up, until now Mercosur has failed to offer a window of opportunity for its

member-states to address their health gap. Despite the stronger activism of the 2000s,

Mercosur’s initiatives are still timid. Furthermore, more recently this agenda seems to have

lost it raison d’etre given the activism of Unasur in this area, a relatively new regional

organization that includes all of its full and associated member-states. In fact, Unasur seems

to be a better institutional choice for South American countries to promote a regional

approach to health. Other regional groupings are already attempting a greater articulation with

Unasur, as shown by the experience of the Andean Health Organization. The intense

engagement of Unasur together with an extended membership might turn this into a more

promising venue to develop and cooperate more effectively, and address thus the policy and

regulatory gap in the area of health in the region. While developments in this policy area

might be explained by the timing of creation of Mercosur and Unasur, a question remains

open as to the extent to which further initiatives in the regulation and provision of health at

Mercosur level can overcome both domestic and regional resistances.

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