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TWN Info
Service on Intellectual Property Issues (Mar21/12) Geneva, 26 Mar (D. Ravi Kanth) – Despite the rampant COVID-19 “vaccine nationalism” having almost corroded the multilateral architecture and cooperation, Japan, the fiercest opponent of the TRIPS waiver proposal at the WTO, is seeking elimination of tariffs and new regulatory rules for environmental goods at the WTO under the guise of “Global Carbon Neutrality”. Japan is one of the countries that have vehemently opposed the TRIPS waiver proposal at the WTO on grounds that it will undermine the monopolistic international patent system. The TRIPS waiver proposal, first tabled by South Africa and India, was co-sponsored by 58 developing and least- developed countries and supported by 61 other countries. It seeks to temporarily suspend certain provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information in ramping up production of COVID-19 related diagnostics, therapeutics and vaccines across countries in combating the COVID-19 pandemic. More than 250 international civil society organizations, researchers, as well as US Congressmen called for the waiver to be adopted given the spread and mutation of the SARS-CoV-2 virus on an exponential scale every day. So far, 126 million people have been affected by the virus with loss of lives amounting to more than 2.7 million. Yet, Japan along with the United States, the European Union, Canada, Norway, and Switzerland are blocking every attempt to get an early decision at the WTO on implementing the TRIPS waiver. On 24 March, the new chair of the WTO’s TRIPS Council, Ambassador Dagfinn Sorli from Norway, held a small- group meeting of around 20 countries in which the opponents of the TRIPS waiver, particularly Switzerland and Japan, continued to maintain their diversionary positions, said people familiar with the meeting. Even as Japan and its allies in the Ottawa Group of countries remain obdurately opposed to the TRIPS waiver because it involves sharing of know-how, transfer of technology and undisclosed information in the manufacturing of the vaccines, these very same countries are now demanding an extreme form of trade liberalization such as elimination of tariffs and a complete change in regulatory areas on environmental goods that will forever arrest economic development in developing and least-developed countries, said people familiar with the development. It’s somewhat striking that at one end, Japan and its allies want to pry open markets in developing and least- developed countries for environmental goods and new regulatory rules, and at another end, they are prepared to block the TRIPS waiver proposal that involves sharing of technology and know-how among others. JAPAN’S “CARBON NEUTRALITY” NON-PAPER At a virtual meeting of the Ottawa Group of trade ministers on 22 March, Japan unveiled its five-page non-paper. The Ottawa Group includes Japan, Canada, Mexico, the EU, Norway, the United Kingdom (which joined the group on 22 March), Australia, New Zealand, Switzerland, South Korea, Singapore, Brazil, Chile, and Kenya. According to a WTO press release, at the meeting, the WTO Director-General, Ms Ngozi Okonjo-Iweala, said, without mentioning the Joint Statement Initiatives (JSIs), that “advancing discussions on (JSI issues of) services domestic regulation, e-commerce, micro-, small and medium-sized enterprises (MSMEs) and the environment would show that the WTO can usefully address issues relevant to current business practice and political priorities.” The DG, in her statements on 15 February and 1 March, highlighted an outcome on “trade and climate”. In her statement on 15 February, the DG had urged members to ensure “that the WTO best supports the green and circular economy and addresses more broadly the nexus between trade and climate change. Trade and environmental protection can be mutually reinforcing, both contributing to sustainable development.” “It will be important for Members to reactivate and broaden the negotiations on environmental goods and services. This would help promote trust and encourage Members to explore further ways in which trade can contribute positively to an improved climate.” The DG’s approach on trade and climate has come as a shot in the arm for Japan and other members of the Ottawa Group, said people familiar with the development. On the non-paper, which is meant for discussion, Japan has resorted to the Paris Agreement on climate change, saying that more than 120 countries pledged to achieve carbon neutrality by 2050. It argues that the “WTO, which is a responsible body for the multilateral trading system, is expected to address climate change as one of its main agenda items and deliver building blocks to promote reduction of global carbon emissions.” Despite the collapse of the negotiations on the Environmental Goods Agreement (EGA) in 2016, Japan said that various bilateral, regional, and international environmental agreements contain “a number of provisions which likely have an impact on domestic environmental measures.” Tokyo said that “in light of such international trends, we should identify ways in which the WTO can maximize its contribution to global carbon neutrality, considering the current international attention that carbon neutrality is receiving, and proceed with discussions towards MC12.” Japan’s non-paper calls for expanding the list of existing products and technologies that contribute to emission reductions. “Tariff elimination is not enough to promote the spread of these products and technologies,” Japan argued. It urged the Ottawa Group members to work on “rule-making related to regulatory issues to facilitate transactions from production to consumption, and prevent arbitrary trade obstacles from being introduced in the future.” “The WTO has the ability to introduce new rules, from a trade perspective, that push governments’ emission reduction efforts,” Tokyo claimed. To achieve global carbon neutrality, Japan said, “we (members) should start discussing concrete ways towards (1) elimination of tariffs on goods that contribute to emission reduction, and (2) rule-making to promote dissemination of such products and technologies simultaneously.” Given the political attention that carbon neutrality is drawing in recent days, Japan argued that “for the WTO to achieve meaningful results on environmental issues in a timely manner, depending on the interests of the Members, there are possibilities to extend the scope of the discussion articulated in [para] 8 [of the non-paper] to other environmental objectives.” Under the title of “elimination of tariffs”, Japan argued that “goods subject to tariff elimination should be products using technologies which directly contribute to the reduction of greenhouse gas emissions (hereafter “environmental goods”) towards realization of global carbon neutrality.” It proposed sectors that “environmental goods” are considered to belong to, for instance: (1) wind power, (2) fuel ammonia, (3) hydrogen, (4) mobility, (5) battery, (6) carbon recycling, (7) housing and building, (8) solar energy, and (9) resource circulation. According to the non-paper, “given that carbon neutrality can only be achieved through development, introduction and dissemination of new technologies over the next decades to come, different from conventional liberalization negotiations focusing on goods already in the market, we should bear in mind the necessity of including goods that are expected to become widely used in the market from a mid-to-long-term viewpoint.” As regards “rule-making on regulatory issues”, the non-paper has argued that “in order to realize the prompt spread of the “environmental goods” globally, we need to proceed with discussions on rule-making on regulatory issues so as to promote research and development, strengthen supply chains, facilitate diffusion, and enhance transparency of domestic measures, in conjunction with tariff liberalization.” In short, Japan has become the “torchbearer” for the elimination of tariffs on environmental goods and services, while turning its back on sharing technology and know-how, and treating it as a public good in addressing climate change, said people familiar with the development.
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