TWN Info Service on WTO and Trade Issues (Oct21/07)
7 October 2021
Third World Network

WTO DG delivers mixed signals for MC12
Published in SUNS #9431 dated 6 October 2021

Geneva, 5 Oct (D. Ravi Kanth) – With less than 42 working days left for the World Trade Organization’s 12th ministerial conference (MC12), the WTO director-general Ms Ngozi Okonjo-Iweala on 4 October delivered a somewhat mixed message that laid emphasis on the progress made in the non-mandated plurilateral Joint Statement Initiative (JSI) issues.

At a press conference on the release of the WTO’s updated figures on global trade, the WTO DG delivered a few remarks on the state of play as regards the negotiations on fisheries subsidies. She said “one or two or three could come as deliverables.”

“One cannot say (until) they are delivered,” said Ms Okonjo-Iweala.

According to the updated figures, world merchandise trade in volume terms is expected to grow 10.8 per cent in 2021, which is forecast to decline next year.

The DG spoke about “trade and health” issues that are currently being discussed by members under the General Council-appointed facilitator process on finalizing the WTO’s response to the COVID-19 pandemic.

The DG said that discussions on intellectual property (IP) and other areas are also going well, but gave little information. She said members must settle on a compromise outcome on IP issues.

She, however, did not suggest what that compromise could constitute – whether it is a compromise on the temporary TRIPS waiver as proposed by 64 countries or the European Union’s proposal relating to the use of compulsory licensing or elements drawn from the two proposals.

The DG highlighted the issue of vaccine inequity and how it could contribute to new COVID-19 variants as well as stymying and slowing down the global economic recovery.

Surprisingly, the DG did not mention any MC12 “deliverables” in agriculture, including the most important mandated issue concerning the permanent solution for public stockholding programs for food security (PSH).

A large majority of developing countries, including India, China, South Africa, the G33 group of developing countries led by Indonesia, and the African Group among others, have demanded an outcome on the permanent solution for public stockholding programs for food security at MC12, scheduled to begin in Geneva on 30 November.

In short, her rather ambiguous remarks on both fisheries subsidies and the WTO’s response to the pandemic suggest that there may not be any outcome on fisheries subsidies.

There is growing concern about treating the issue of trade and health with the usual set of market access and trade liberalization issues, while playing down the importance of the temporary TRIPS waiver that has been discussed for the past 12 months.

WTO DG AND JSIs

That Ms Okonjo-Iweala has chosen to lay more emphasis on the controversial non-mandated issues in the informal Joint Statement Initiatives (JSIs) should not come as a surprise.

From the day that she was first appointed on 15 February, the DG embarked on the JSI bandwagon even though the JSIs did not gain multilateral consensus at the WTO’s 11th ministerial conference (MC11) in Buenos Aires in December 2017.

In her first statement after being appointed as DG, Ms Okonjo-Iweala said the WTO “rule-book must be updated to take account of 21st century realities such as e-commerce and the digital economy”, a JSI goal.

She also said that “E-commerce offers important opportunities for inclusion of MSMEs and women in international trade, especially in developing countries.”

Later, when she wanted to discuss the JSIs at an informal Trade Negotiations Committee (TNC) meeting, India told her that as the chair of the Doha TNC, she is not mandated to talk of issues that are not part of the Doha development agenda. The DG admitted her mistake at that informal TNC meeting (see SUNS #9340 dated 5 May 2021).

Yet, at the press conference on 4 October, she said that there is existing progress on the non-mandated JSI issues including e-commerce, investment facilitation, disciplines for micro, small and medium enterprises (MSMEs), women and gender, and on plastics. “Some mix of things for a successful progress,” she said.

When asked about a recent Bloomberg news agency report that she is intending to resign due to lack of progress in the negotiations, Ms Okonjo-Iweala said that it was a “fake” report.

TRIPS COUNCIL MEETING

At a brief TRIPS Council meeting on 4 October, a large majority of developing countries, including India, South Africa, and China among others, demanded an outcome on the much-delayed temporary TRIPS waiver for combating the COVID-19 pandemic.

However, a handful of countries led by the European Union, the United Kingdom, and Switzerland continued to adopt “stonewalling” tactics, saying that they want to hold more discussions on the waiver while blocking attempts to start text-based negotiations, according to people familiar with the development.

Despite the worsening COVID-19 pandemic and growing vaccine inequity that could contribute to the emergence of new variants of COVID-19, a handful of countries have stalled efforts to finalize an outcome on the temporary TRIPS waiver at the World Trade Organization.

The proposal on the temporary TRIPS waiver was submitted more than a year ago aimed at ramping up global production of diagnostics, therapeutics, and vaccines to combat the COVID-19 pandemic.

The revised waiver proposal sought to suspend certain provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information for a period of three years.

However, the somewhat hostile positions adopted by the European Union, the United Kingdom, and Switzerland among others have almost put paid to efforts at arriving at a decision through text-based negotiations, said people familiar with the development.

In the draft decision submitted by the chair of the WTO’s TRIPS Council on Friday, Ambassador Dagfinn Sorli from Norway said that “delegations exchanged views, asked questions, sought clarifications and provided replies, clarifications, and information.”

He said that “disagreement persists on the fundamental question of whether this proposal is the appropriate and most effective way to address the shortage and inequitable distribution of and access to vaccines and other COVID-related products.”

Despite establishing the urgent need for the waiver over the past 12 months, the chair’s characterization that “disagreement persists” only reflects the “ideological” positions adopted by the EU, the UK, and Switzerland, and not the larger membership, said a person, who asked not to be quoted.

In his draft text, the chair said “the TRIPS Council has not yet completed its consideration of the revised waiver request. The TRIPS Council will therefore continue its consideration of the revised waiver request, including through small-group consultations and informal open-ended meetings, and report back to the General Council as stipulated in Article IX:3 of the Marrakesh Agreement.”

“In addition,” the chair said, “the TRIPS Council will also continue in the same manner its consideration of the other related proposals by Members.”

The chair is expected to read the following statement at the General Council (GC) meeting on 7 October:

“At the meeting of the TRIPS Council on 15-16 October 2020, India and South Africa introduced document IP/C/W/669, requesting a waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19, which had been circulated on 2 October 2020 and has since been co-sponsored by the delegations of Kenya, Eswatini, Mozambique, Pakistan, Bolivia, Venezuela, Mongolia, Zimbabwe, Egypt, the African Group, the LDC Group, the Maldives, Fiji, Namibia, Vanuatu, Indonesia and Jordan.

“Since the introduction of the document, discussions took place in various formal and informal TRIPS Council meetings. Delegations exchanged views, asked questions, sought clarifications and provided replies, clarifications, and information, including through documents IP/C/W/670, IP/C/W/671, IP/C/W/672, IP/C/W/673 and IP/C/W/674, on the waiver request.

“On 21 May 2021, the co-sponsors issued a revised proposal which was circulated in document IP/C/W/669/Rev.1. The revised waiver request was presented at an informal open-ended meeting of the Council on 31 May, and introduced at its formal meeting on 8-9 June 2021. It has since been co-sponsored by Malaysia.

“Since the last oral status report delivered on 27 July 2021, discussions continued in small-group consultations, at an informal open-ended meeting on 14 September [and at an informal and formal meeting on 4 October 2021]. On 29 September 2021, the co-sponsors circulated a summary of their interventions in document IP/C/W/684.

“In the course of discussions on the revised waiver proposal, delegations held focused discussions on the topics of “scope”, both from the perspective of products and of IP rights, on “duration”, “implementation” and on protection of undisclosed information. Delegations engaged positively and their detailed substantive exchanges helped clarify various aspects and nuances of positions. While delegations remain committed to the common goal of providing timely and secure access to high-quality, safe, efficacious and affordable vaccines and medicines for all, disagreement persists on the fundamental question of whether a waiver is the appropriate and most effective way to address the shortage and inequitable distribution of and access to vaccines and other COVID-related products.

“In addition, a proposal for a draft General Council declaration on the TRIPS Agreement and Public Health in the circumstances of a pandemic, issued by the European Union and circulated in IP/C/W/681, has also been discussed in meetings since its circulation on 21 June 2021. Delegations exchanged views, asked questions, sought clarifications and provided replies, clarifications, and information.

“Disagreement persists on the fundamental question of whether this proposal is the appropriate and most effective way to address the shortage and inequitable distribution of and access to vaccines and other COVID-related products.

“This means that the TRIPS Council has not yet completed its consideration of the revised waiver request. The TRIPS Council will therefore continue its consideration of the revised waiver request, including through small-group consultations and informal open-ended meetings, and report back to the General Council as stipulated in Article IX:3 of the Marrakesh Agreement.

“In addition, the TRIPS Council will also continue in the same manner, its consideration of the other related proposals by Members.”

In response to the Chair’s formulation, which will be read out at the GC meeting on 7 October, members made brief interventions.

DEVELOPING COUNTRIES RALLY AROUND TRIPS WAIVER

Recently, South Africa’s President Cyril Ramaphosa said at the WTO’s Public Forum on 28 September, that “the WTO has a central role in addressing trade and intellectual property related barriers to boost and diversify production of vaccines, diagnostics and therapeutics.”

He said “passing a time-bound, targeted TRIPS Waiver is urgent if we are to save millions of lives.” The waiver is “a proportionate response to the exceptional circumstances presented by the COVID-19 pandemic,” he said, arguing that “unequal access to vaccines presents a huge risk to a sustained global recovery.”

The South African President emphasized that “an agreement on issues like the TRIPS waiver is both possible and necessary if the WTO is to live up to the expectations of the ordinary people of which President Mandela spoke.”

Yet, with less than 42 working days left for MC12, the prospects for concluding an agreement on the TRIPS waiver are being undermined, said several people who asked not to be quoted.

At the TRIPS Council meeting, South Africa informed members about the 64 co-sponsors’ nine-page proposal that contains “a summary of the co-sponsors’ interventions in explaining the basis of the waiver proposal.”

The submission by the co-sponsors on 30 September, contained in document IP/C/W/684, touched on many issues, saying that the “context of the extent of the current health crisis posed by COVID-19 is as undeniable as the current global response is untenable.”

It provided explanations on the “product scope of the waiver”; “health products and technologies”; “diagnostics”; “therapeutics”; “vaccines”; “medical devices, personal protective equipment”; “the prevention, treatment or containment of COVID-19”; “intellectual property scope of the waiver (copyrights, industrial designs, patents and protection of undisclosed information in the WTO’s TRIPS Agreement)”; “duration”; and “implementation issues.”

The co-sponsors argued in their latest proposal that “governments have taken extraordinary measures such as lockdowns, quarantine, nationalizing private hospitals, border closures and other measures to curb the spread of COVID-19.”

Therefore, “addressing intellectual property concerns should not be any different,” the co-sponsors argued.

South Africa expressed grave concern that despite agreeing to participate in text-based negotiations in June, members opposed to the TRIPS waiver have been using recent TRIPS Council meetings and small group consultations as a fora to repeat extensively-addressed questions, adding to the sense of frustration and disappointment.

Mauritius, on behalf of the African Group, reiterated the need to agree on the temporary TRIPS waiver proposal that would contribute to the ramping up and diversification of COVID-19 related medical products across the world.

The African Group said while it stands ready to engage in further discussion on the European Union’s proposal for a draft General Council declaration on the TRIPS Agreement and Public Health in the circumstances of a pandemic (IP/C/W/681), it should not be treated as an alternative to the TRIPS waiver proposal and should be addressed in parallel.

India argued that after one year of fruitless discussions, 5 million people have died due to COVID-19.

India criticized members who had agreed to open text-based negotiations in June and have done everything in their power since then to avoid a meaningful engagement.

It warned that any outcome with regards to trade and health at MC12 will not be credible without the adoption of the TRIPS waiver.

Without naming the United States, the European Union and other countries, India said “relying solely on voluntary mechanisms of existing TRIPS flexibilities and philanthropy will not yield the desired and effective results in these extraordinary circumstances.”

China said the waiver proposal has received wide support from the international community, and it stressed the value of the recently submitted document (IP/C/W/684) clarifying some key topics of the text, such as scope, duration, and implementation issues. China expressed concern that the discussion on the waiver is going in circles without any real progress.

OPPONENTS OF WAIVER CONTINUE WITH THEIR “DIVERSIONARY” TACTICS

The EU, which has been opposing the TRIPS waiver by adopting “diversionary” tactics all along, said its proposal is a “pragmatic, targeted and effective response to the pandemic while keeping intact the necessary incentives for innovation.” The EU said it remains open to consider any other proposal that may contribute to a solution.

The other two opponents of the TRIPS waiver – the United Kingdom and Switzerland – stuck to their rather hostile positions by asking more questions about the relevance of the waiver after one year of discussions.

The United States, which supported the text-based negotiations in May, remained rather indifferent by praising the TRIPS waiver proposal and the EU’s compulsory licensing proposal.

The US noted that it is more focused on vaccines, suggesting that its aim is to get as many safe and effective vaccines to as many people as fast as possible.

The US also said it is important that we look towards solutions that can gain the support of all members.