TWN Info Service on WTO and Trade Issues (Apr20/03)
2 April 2020
Third World Network

Options for convening MC12
Published in SUNS #9091 dated 31 March 2020

Geneva, 25 Mar (D. Ravi Kanth) — The World Trade Organization General Council chair Ambassador David Walker from New Zealand and the Director-General Roberto Azevedo have indicated three options for convening the 12th ministerial conference (MC12), trade envoys told SUNS.

The options come with several caveats stemming from the rapidly accelerating COVID-19 pandemic, the envoys added.

The three options suggested by the GC chair and the DG on 23 March include December 2020, June 2021, and December 2021, trade envoys told the SUNS on condition of anonymity.

During consultations with trade envoys by telephone on 23 March, the GC chair and the DG asked members to consider these options, suggesting that they will be issuing a statement soon regarding the same options for holding MC12 (the 12^th ministerial conference), the trade envoys said.

Significantly, the GC chair and the DG indicated that they are considering convening a special General Council meeting sometime in July or August for finalizing the fisheries agreement for prohibiting fisheries subsidies subject to the progress in tackling the COVID-19 by the end of April in Geneva, trade envoys said.

Surprisingly, the WTO, which is the custodian for global trade and multilateral trade rules, has remained silent until now on the issue of  relaxing the TRIPS (trade-related aspects of intellectual property rights) provisions to address the novel coronavirus that led the COVID-19 disease to spread across many countries during the past one month, said trade envoys, preferring not to be quoted.

While the DG urged members to inform the Secretariat about the trade-restrictive measures put in place in the wake of the COVID-19 pandemic on 24 March, there is no initiative to provide comfort/relief on the TRIPS front given the adverse impact it had unduly placed on poor and developing countries for providing affordable medicines, said a trade envoy, who asked not to be quoted.

Members need to know whether a new mechanism to the TRIPS agreement without burdensome conditions needs to be put in place immediately so as to ensure that new drugs for COVID-19 are made available at affordable prices in the months and years to come given the rapid transmission of the novel coronavirus, the trade envoy said.

The earlier paragraph six mechanism to the TRIPS agreement agreed in 2003 was made stringent and cumbersome for countries to implement so as to tackle HIV/AIDS, TB, and malaria.

According to a report in The Intercept online publication, on 24 March, the US Food and Drug Administration granted Gilead Sciences “orphan” drug status for its antiviral drug, “remdesivir”.

The “designation” allows the pharmaceutical company to profit exclusively for seven years from the product, which is one of dozens being tested as a possible treatment for COVID-19, the disease caused by the new coronavirus.

More importantly, the World Health Organization Director-General Dr Tedros Adhanom Ghebreyesus has repeatedly been emphasizing that any novel therapeutics or vaccines must be made available to the poor countries without extortionary conditions and prices.

The Declaration on the TRIPS Agreement and Public Health has underscored “an expeditious solution to the problem of the difficulties that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face in making effective use of compulsory licensing under the TRIPS Agreement and to report to the General Council before the end of 2002.”

Further, it said that “where eligible importing Members seek to obtain supplies under the system set out in this Decision, the importance of a rapid response to those needs consistent with the provisions of this Decision.”

In the light of exceptional circumstances, the paragraph six mechanism justified “waivers from the obligations set out in paragraphs (f) and (h) of Article 31 of the TRIPS Agreement with respect to pharmaceutical products.”

However, the mechanism had little effect because developing and least-developed countries found it difficult to implement it, given the burdensome conditions attached to the agreement, according to several studies.

On the three options offered by the GC chair and the DG, “these are open options subject to COVID-19 measures”, said another trade envoy, suggesting that it is very unclear and confusing to discuss these options when COVID-19 has rapidly accelerated in Europe, particularly Geneva, which is subject to lockdown conditions, and in Asia and Africa.

The December 2020 option is almost difficult, according to the GC chair and the DG, because of the current reconstruction of the Geneva Conference Centre that was used as the venue for the WTO’s 8th ministerial conference, trade envoys said.

Also, given the US Presidential elections in November and the G20 leaders’ meeting  in Riyadh, Saudi Arabia, in December, it would be difficult to host the 12th ministerial conference in December 2020, trade envoys said.

Even Kazakhstan, which has made all arrangements for MC12 on 8-11 June but later cancelled because of the COVID-19 pandemic, will find it difficult to host the December 2020 meeting because of the extreme cold conditions in the region, the trade envoy said, preferring not to be quoted.

As regards the June 2021 option, it would depend largely on Kazakhstan since it had already made arrangements, trade envoys said.

Apparently, the GC chair and the DG have not discussed the June 2021 option with the Kazakh government until now, trade envoys said.

“The situation is very hazy but several industrialized  countries want to conclude the agreement on fisheries subsidies in July even though the negotiations can’t be held because of the escalating scare of the COVID-19,” that could take more than a year to fully subside, said a trade envoy, who asked not to be quoted.

The New York governor Andrew Cuomo has suggested that it would take two years for combating the COVID- 19 disease, during an interview with CNN.

At a time when the whole world is facing “a new normal,” with the global economy having been turned upside down and drowned in one of the worst recessions, it is an inappropriate time to discuss the ministerial meeting, particularly when governments have closed normal operations and people are being asked to stay at home, the envoy said.

Moreover, it is insensitive and insensible to discuss “the most appropriate moment in time” as well as the venue to hold the 12th ministerial conference on a theological basis without regard to the worst health scare arising from the COVID-19, the envoy said.

The COVID-19, according to medical experts, poses a 10% risk to those who would contract the disease, unlike an open-heart surgery that carries a risk of 3-4 per cent.

Even considering an agreement on fisheries subsidies, to be finalized in July or August without proper negotiations, is fraught with several risks for developing and poor countries who have millions of fishermen depending on artisanal fishing for their survival, said trade envoys, who asked not to be quoted.

Instead, the WTO must consider initiatives to relax the TRIPS (trade-related aspects of intellectual property rights) provisions so as to ensure that new drugs that are going to be patented do not come up with IPR-attached conditions for tackling the COVID-19, said a LDC trade envoy.