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Info Service on WTO and Trade Issues (Jun21/17) Geneva, 28 Jun (D. Ravi Kanth) – India has called for an expeditious outcome in the text-based negotiations on the revised TRIPS waiver proposal by end-July for saving lives from the worsening COVID-19 pandemic, as it continues to wreak havoc on both the health and economic fronts across all countries, said people familiar with the development. At an informal Trade Negotiations Committee (TNC) meeting on 25 June, India said the WTO has not delivered a positive message about the launching of negotiations on the TRIPS waiver in the past 9 months, while several other negotiations have altogether been dragging on for years. India emphasized the need for an outcome on the TRIPS waiver by end-July as the WTO’s response to the pandemic for ramping up production of diagnostics, therapeutics and vaccines across countries. The temporary TRIPS waiver seeks to suspend certain provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information for a period of at least three years. Due to fierce opposition from the United States and the European Union to the mandated issues, the WTO’s 12th ministerial conference (MC12), to be held in Geneva in end-November, is not likely to deliver on the core multilateral issues, including on the permanent solution for public stockholding programs for food security in developing countries, said people, who asked not to be quoted. At the TNC meeting, the developing countries pressed for outcomes on the permanent solution for public stockholding programs (PSH) for food security and the special safeguard mechanism (SSM). The WTO is also unlikely to restore the functioning of the Appellate Body (AB) any time soon, as the United States has linked the AB issue to fundamental reforms of the WTO, implying that it wants a payment from 121 countries that have repeatedly called for filling the vacancies at the AB, said people, after attending the meeting. The US said categorically that it sees “very little scope for negotiated outcomes” at MC12, echoing several discordant notes that could undermine the trade body, said people, who asked not to be quoted. It suggested that a successful MC12 for Washington is about “focusing on the contribution of the WTO to the pandemic recovery, and beginning to fix the institutional challenges that are preventing substantive outcomes through negotiations.” Effectively, the US intervention implies that members must agree to its proposal on the negotiating function of the WTO that aims to differentiate developing countries for availing of special and differential treatment; on enhanced transparency and notification requirements; and on a severely weakened Appellate Body, said people, who preferred not to be quoted. “On dispute settlement, the United States believes that members must undertake fundamental reforms if the system is to remain viable and credible,” the US official said. While the US struck discordant notes on several issues, several members – Indonesia, India, New Zealand, and South Africa among others – cautioned that without the Appellate Body there is little purpose in negotiating new trade agreements, said people who took part in the meeting. WTO DG’S REMARKS At the TNC meeting, the director-general Ms Ngozi Okonjo-Iweala sought members’ responses to (1) the contribution of the WTO to the COVID-19 pandemic; (2) agriculture; and (3) the dispute settlement system. She highlighted the controversial trade and health initiative based on her “third way” approach. The trade and health initiative is being advanced by the Ottawa Group of countries. She suggested that the delay in finalizing an appropriate response to the pandemic will result in more mutations and undermine economic recovery. Given the likely K-shape of global economic recovery, which implies that some countries will have a speedy recovery while others will remain trapped in a vicious cycle of economic problems, she said it is important to address the problem of access to vaccines. She emphasized the need to address the supply-side constraints, transparency-related issues, export restrictions, and working with the manufacturers for ramping up production of vaccines. Ms Okonjo-Iweala said members must also address issues concerning transfer of technology and know-how, and IP issues, including the ongoing negotiations in the TRIPS Council. Ms Okonjo-Iweala touted other initiatives such as working with the heads of the International Monetary Fund, the World Health Organization, and the World Bank on how to use the proposed $50 billion from the issuance of new SDRs (special drawing rights). In response to the three issues highlighted by the WTO DG, members expressed differing views in their nuanced statements. REACTIONS FROM DEVELOPING COUNTRIES Many developing countries – Indonesia, India, and South Africa among others – said the response to the pandemic as well as the permanent solution for public stockholding programs for food security must be concluded at MC12. Indonesia’s trade envoy Ambassador Syamsul Bahri Siregar called for “meaningful and balanced outcomes” in domestic support, permanent solution for public stockholding programs for food security, and a simple special safeguard mechanism. Ambassador Siregar said the WTO must deliver a robust message at MC12 on the permanent solution for public stockholding programs for food security in that it is on the side “of the weak and vulnerable” sections of the society. He called for a concrete solution to the impasse at the Appellate Body to provide legal certainty. Ambassador Siregar emphasized that there is little point in negotiating new agreements without an enforcement mechanism in which the Appellate Body remains the final point for resolving trade disputes. Korea cautioned that time is running out on finalizing the deliverables, emphasizing that success at MC12 is vital for the future of trade. Korea’s new trade envoy Ambassador Taeho Lee said that identifying the actions to be taken to address the current “crises,” namely, the pandemic crisis and the resulting economic crisis, are imperative, according to people who took part in the meeting. Korea said it is participating in the text-based negotiations on the TRIPS waiver as also on the EU’s IP-flexibility proposals. INDIA’S INTERVENTION India said that it supports the DG’s vaccine-access initiative with emphasis on the issues of “investment, research and development, manufacturing capacity and regulatory challenges.” However, its top priority is the conclusion of an agreement on the temporary TRIPS waiver for suspending certain provisions of the WTO’s TRIPS Agreement by end-July. “We are not waiting for an outcome until MC12, we want an outcome by end July,” India’s trade envoy Ambassador Brajendra Navnit stressed. India cautioned that the delay in arriving at an outcome on the waiver has resulted in the loss of about 4 million lives, suggesting that there is a felt need for ramping up the manufacturing of vaccines. As a co-sponsor of the TRIPS waiver proposal, India said it is willing to discuss the list of products. India lamented that the WTO has not delivered the message about the consensus achieved in a matter of nine months to start the text-based negotiations on the waiver. Without mentioning the EU’s draft General Council declaration on the “TRIPS Agreement and Public Health in the Circumstances of a Pandemic”, India likened the declaration to a patient trying out an old prescription that did not work for his current disease, said people, who preferred not to be quoted. India called for focusing on enhancing the mobility of health professionals and tele-medicine services during the pandemic. It suggested a framework agreement to be adopted at MC12 on what members can contribute from services such as the mobility of health professionals and tele-medicine services. India said a permanent solution on PSH should be a main deliverable at MC12. The Indian trade envoy rejected approaches involving “tokenism”, particularly in regard to the proposed decision on the World Food Program’s non-commercial purchases of food grains from countries on which there are no export restrictions at this juncture. In response to India’s sharp statement on the WFP issue, the DG, who is supposed to not side with the views of any particular group under the Marrakesh Agreement, suggested bringing the World Food Program’s chief to the WTO for convincing members about the difficulties the WFP is facing in countries due to export restrictions, said people, who asked not to be quoted. India said that the historical asymmetries in the domestic farm subsidies must be addressed on a priority basis. It called for the immediate restoration of the functioning of the Appellate Body, arguing that without a functional AB, there is little value in negotiating new agreements. SOUTH AFRICA’S INTERVENTION South Africa’s trade envoy Ambassador Xolelwa Mlumbi-Peter said the WTO’s response to the pandemic is the most important priority for the 12th ministerial conference. The WTO’s credibility hinges on finalizing a robust outcome for ramping-up the production of diagnostics, therapeutics, and vaccines across all countries. South Africa raised several serious concerns about the lack of transparency in the voluntary licensing contracts that have been signed between pharmaceutical companies during the pandemic, suggesting that such contracts must not confine the developing country manufacturers “to fill and finish” agreements. South Africa cautioned about “information asymmetry in regard to the contracts”, suggesting that the lack of transparency of the contracts would result in second-best approaches for developing countries, said people, who asked not to be quoted. South Africa said that as long as members don’t resolve the supply-side issues, governments will end up with self- defeating vaccine nationalism. It suggested that the only sustainable way for ramping-up production of health and health-related technologies is through the temporary waiver. More importantly, South Africa proposed a mechanism for addressing future pandemics at the WTO at the 12th ministerial conference. On agriculture, South Africa called for outcomes on domestic support, public stockholding programs for food security, and the special safeguard mechanism for developing countries. RESPONSES FROM DEVELOPED COUNTRIES The US adopted somewhat downbeat positions in agriculture and the dispute settlement system, while echoing ambiguous messages as regards the response to the pandemic. “We should not overload the agenda of this important priority (on access to vaccines) by trying to force negotiations on unnecessary issues,” the US said. However, it did not clarify what are the “unnecessary issues” at the meeting, said people, who preferred not to be quoted. The pandemic, according to the US, creates an opportunity for members to consider “how the WTO and its committees can be realigned to contribute to strengthening global recovery and advancing preparedness for the future.” It welcomed the text-based negotiations on the waiver at the WTO’s TRIPS Council, emphasizing the need to be realistic about the scope of what is achievable. The US said it is focused on the supply of vaccines as well as reaching the vaccines to as many people as possible. On agriculture, the US, Canada, the EU, and Australia among others ruled out any outcome on the mandated issue of the permanent solution for public stockholding programs for food security. The US and EU, which are only focused on transparency-related issues to be decided at MC12, adopted different positions on domestic support. The US said while it concurs with the Cairns Group proposal on domestic support, which calls for disciplining all forms of trade-distorting domestic support and for all members to make proportionate cuts, a large majority of developing countries remain opposed to disciplining certain forms of support, including some of the most trade- distorting forms like the market price support schemes. EU AND OTTAWA GROUP The European Union and the Ottawa Group led by Canada remained on the same page about the trade and health initiative, which is an alleged replica of the DG’s “third way” approach. Canada claimed that its trade and health initiative is supported by more than 50 countries. The EU, which is also a member of the Ottawa Group, touted its recent proposal to remove the difficulties involved in invoking the compulsory license (CL) provisions, insisting that it is adopting a “holistic” approach. The EU said its proposal is not the same old medicine that has been tried and tested, suggesting that it seeks to address issues that were identified as to why CL has not worked in the past. At the meeting, the Cairns Group of countries led by Australia, New Zealand, and Canada among others called for a framework agreement at MC12 to start negotiations after the meeting on addressing domestic farm subsidies.
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