TWN Info Service on WTO and Trade Issues (May21/02)
4 May 2021
Third World Network

USTR plans to visit Geneva to discuss TRIPS waiver
Published in SUNS #9339 dated 4 May 2021

Washington DC, 3 May (D. Ravi Kanth) – As global pressure escalates in favour of the proposed TRIPS waiver in combating the COVID-19 pandemic, the United States has adopted a non-committal stance for entering into text- based negotiations, as being demanded by more than 100 developing countries at the World Trade Organization, said people familiar with the development.

At the formal TRIPS Council meeting held on 30 April, the US did not indicate whether the Biden-Harris administration intends to support text-based negotiations, but maintained that Washington will work towards a global solution.

The US Trade Representative (USTR) Katherine Tai will be heading to Geneva to negotiate an agreement on how to ensure COVID-19 vaccines are more widely available, two senior White House officials said on 2 May.

The US Administration has been weighing whether to support a proposal to temporarily waive several provisions in the WTO’s TRIPS Agreement, which supporters say will make it easier for developing countries to produce vaccines, according to Ron Klein, the chief of staff at the White House.

However, a handful of developed countries, led by the European Union and Switzerland, have adopted an allegedly cynical stand to block the call for text-based negotiations on “ideological” grounds, said people, who asked not to be quoted.

The sponsors of the temporary waiver, which calls for exempting certain provisions of the WTO’s TRIPS Agreement, indicated that they will circulate their second proposal soon following their consultations with several members in May.

South Africa’s trade envoy Ambassador Xolelwa Mlumbi-Peter expressed confidence in the USTR Ambassador Katherine Tai’s position echoed at the meeting convened by the WTO Director-General Ms Ngozi Okonjo-Iweala on 14 April.

Ambassador Xolelwa said at the meeting that “the USTR put it well in the meeting the DG organized on 14 April 2021 when she said “the Doha Declaration on the TRIPS Agreement and Public Health, for example, was born out of the HIV/AIDS crisis, and we all – both in government and in the private sector – need to do our parts to live up to its spirit”.” “There is no better time to do that than now,” Ambassador Xolelwa said.

With more than 400 international civil society organizations rallying around the TRIPS waiver, as well as growing support from US lawmakers and 170 former leaders and Nobel Laureates, the waiver has become a global priority, said several people. The temporary waiver seeks to suspend the implementation of copyrights, industrial designs, patents, and protection of undisclosed information in the WTO’s TRIPS Agreement to ramp-up the production of diagnostics, medicines, and vaccines across countries in order to contain the ravaging and mutating SARS-CoV-2 virus globally.

TRIPS CHAIR’S REPORT FOR GENERAL COUNCIL

The chair of the TRIPS Council, Ambassador Dagfinn Sorli from Norway, presented a draft report that would be sent to the General Council meeting on 5 May. The report, which has been approved at the meeting on 30 April, provided a factual account on the state of play of the TRIPS Council meetings on the waiver.

He acknowledged the temporary 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 and the LDC Group and the Maldives.”

Ambassador Sorli said “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 but could not reach consensus, including on whether it is appropriate to move to text-based negotiations.”

In April 2021, the chair said, “the co-sponsors indicated that they were considering an update of their proposal and were in the process of consulting with Members.” He said delegations underscored the need for further discussions on the waiver request and views exchanged by delegations,” suggesting that “the TRIPS Council has not yet completed its consideration of the waiver request.”

“The TRIPS Council will therefore continue its consideration of the waiver request and report back to the General Council as stipulated in Article IX:3 of the Marrakesh Agreement,” the report said.

In his closing remarks at the meeting, Ambassador Sorli said “without a minimum of common understanding of the nature of the challenge, it is difficult to see how a consensual approach to the waiver request could be established.”

According to the chair, members “need to continue trying to build a common understanding, and for that to happen, members will have to continue engaging in good faith with each other with a clear sense of urgency and common purpose.”

CO-SPONSORS OF TRIPS WAIVER MAKE STRONG CASE

Namibia and Fiji have joined as the co-sponsors to the proposal on the waiver (see IP/C/W/669/Add.12 and IP/C/W/669/Add.13).

At the meeting, South Africa, India, the African Group, and many other countries called for text-based negotiations on the waiver.

South Africa said it supports the chair’s factual reflection on the state of play. The chair’s report indicated that “the co-sponsors are continuing with the consultation process with various delegations in order to test ideas towards a revised proposal which will be submitted soon upon conclusion of these consultations.”

Ambassador Xolelwa Mlumbi-Peter expressed her hope that “the revised text will provide a good basis to move to text-based negotiations which are long overdue.” The circular discussions in the TRIPS Council, in which the opponents keep raising the same questions despite being clarified with substantial evidence on umpteen occasions, are not helpful “in facilitating a solution-oriented discussion.”

She emphasized that members can “only find a pathway when we engage in text-based negotiations and this is the only way we can come up with a balanced outcome that addresses the concerns of all but delivers a global solution to this crisis.”

In the face of grim COVID-19 figures of 3.2 million deaths globally and 150 million COVID-19 registered cases, South Africa reminded members that 87% of 1 billion doses administered until now have gone to developed countries.

She quoted WHO DG Dr Tedros’ statement made on 14 April that “1 in 4 people in developed countries have got a jab but 1 in 500 in poor countries have received the shot. Only 0.2% of vaccines dispensed so far are in low-income countries. This demonstrates the inequity in vaccine access.”

At the current rate of vaccination across countries, it would take several years to inoculate 70% of the global population, she said, suggesting that the world is facing the worst challenge from limited supply.

She said “there is under-utilized manufacturing capacity that can be put on stream with sharing of technology and know-how.”

In a scenario where the developed countries are emerging rapidly from the pandemic, much of the world is still living a nightmare, she lamented.

Worse still, some developed countries are resorting to hoarding doses, “as well as critical vaccine supplies for their own domestic populations,” she pointed out.

What is needed urgently is a “sustainable solution” centering around “global cooperation to boost supply and get the jabs on peoples’ arms so as to reach global immunity,” Ambassador Xolelwa argued.

Citing the ugly experience of the HIV/AIDS, where developed countries had overcome the problem, while millions of people in developing countries were left behind, she said the “level of policy cooperation needed for COVID-19 vaccine production is, admittedly, unprecedented.”

She assured members that “the proponents of the TRIPS Waiver understand and appreciate the role of IP to R&D and innovation, including in the context of pharmaceuticals products.”

“However, we are also reminded by what we as the WTO membership said in the Doha Declaration on TRIPS and public health,” Ambassador Xolelwa said, arguing that the Doha Declaration on TRIPS and public health stated unambiguously that members “recognize the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.”

Therefore, the WTO TRIPS Agreement must “be part of the wider national and international action to address these problems,” the South African trade envoy argued.

She said while IP protection is important for the development of new medicines, it is important to recognize “the concerns about its effects on prices.”

The proponents, she said, “agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health.”

“Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all,” she argued.

The USTR has put it well in the meeting the DG organized on 14 April 2021, Ambassador Xolelwa said, arguing that Ambassador Tai said “the Doha Declaration on the TRIPS Agreement and Public Health, for example, was born out of the HIV/AIDS crisis, and we all – both in government and in the private sector – need to do our parts to live up to its spirit.”

“There is no better time to do that than now,” Ambassador Xolelwa said. “Without the TRIPS waiver, it is clear to us that poorer countries will remain dependent on the charity of richer countries and their pharmaceutical industries,” she argued.

More important, “the Waiver will facilitate sharing of technology and know-how in a coherent, transparent and open manner to companies with idle manufacturing capacity across the world,” as against the bilateral deals through voluntary licensing agreements that “have proven to be ineffective as a response thus far.”

She said “the biggest challenge is how to ramp-up and diversify production in the shortest possible time so as to effectively deal with the pandemic across the world.”

An ineffective response to the pandemic, according to the IMF estimates, could cost the global economy $28 trillion in lost output by 2025.

She indicated that the proponents will “present the Revised text once concluded to Members before the formal meeting scheduled in June and we will work with you on the timing of such a meeting in May 2021.”

She reminded members at the meeting that the “COVID-19 pandemic is an unprecedented global public health crisis and we need extraordinary measures and strengthened international cooperation to break the transmission chain globally.”

“No one is safe until everyone is,” said Ambassador Xolelwa, emphasizing that “timely, affordable and equitable access is imperative for restoring economic recovery and protecting lives.”

She said “nationally focused responses, business as usual approaches and dependence on market-based solutions have proven inadequate as an effective response.”

The sponsors, she said, have emphasized that “the Waiver is an exceptional, temporary instrument that will unlock global production.”

The sponsors also emphasized “that Waivers are part of the legal architecture of the WTO and granting of Waivers is nothing new in the WTO, including in the context of the TRIPS Agreement,” she said.

Moreover, the waiver will ensure that “in accordance with the TRIPS Agreement that IP is used for the mutual benefit of producers and users. For countries that do not have manufacturing capacity at all, it could open up more supply options so they do not have to lock themselves to one or two companies through licensing agreements.”

Ambassador Xolelwa drew attention to the United Nations Secretary-General Antonio Guterres’ statement on 17 February 2021 in which he said “if the virus is allowed to spread like wildfire in the Global South, or parts of it, it will mutate again and again.”

“New variants could become more transmissible, more deadly and, potentially, threaten the effectiveness of current vaccines and diagnostics (and) this can prolong the pandemic significantly, enabling the virus to come back to plague the Global North,” she said, emphasizing that the delay in tackling the pandemic will have a devastating impact on the world economic recovery.

“At this critical moment, vaccine equity is the biggest moral test before the global community,” Ambassador Xolelwa argued.

She emphasized that “the scope of the Waiver has been carefully thought to ensure that it will enable production of vaccines, diagnostics and therapeutics.”

More important, “the scope takes into account the different aspects and categories of IP that are vital to making medical products that are a necessary response to fighting COVID-19 such as vaccines which include know-how, trade secrets, and data,” she said. “Hence the importance of undisclosed information, patents, copyright, and industrial designs.”

She cited the International Monetary Fund’s estimates that the “pandemic costs the global economy $28 trillion in lost output by 2025,” while the International Chamber of Commerce (ICC) Research Foundation has also found that the global economy stands to lose as much as US$9.2 trillion as a result of inequitable access.

“It therefore makes moral, legal and economic sense to pass the Waiver,” she argued.

INDIA’S INTERVENTION

India drew attention to the loss of trillions of dollars of world economic output, and hundreds of millions of additional vaccines doses, due to the continued discussions on the TRIPS waiver for the past seven months without any resolution.

India’s trade envoy Ambassador Brajendra Navnit said that India has proposed at the last informal TRIPS Council meeting on 22 April that the “Secretariat do a data compilation exercise, for transparency purpose, as to how many Voluntary Licensing agreements have been achieved as an outcome of the two events with pharma companies held on 8-9 March and 14 April, how many more vaccine doses have been/will be added to the overall capacity and how much of such doses have been actually delivered.”

India reiterated its “request for such a compilation which could then be reviewed periodically, perhaps on a monthly basis.”

India said the implementation of the waiver will much depend “on the final text of the decision and can be better addressed through text-based negotiations.”

As regards the question of legal inconsistencies among trading partners due to the waiver being optional, India said the proponents “are of the view that the current TRIPS rules and the uncertainty with respect to the patent landscape is creating an unpredictable environment for manufacturing and supply.”

The Indian trade envoy indicated that “the proponents have been working on a revised text of the Waiver in which we are looking at a pragmatic list-based approach to scope and a specific duration of years based on scientific and epidemiological data as to how long it will take for the whole world to get the vaccines.”

He assured members that “the waiver implementation would be a one-off measure for a set duration, which increases certainty and predictability.”

“If partnering countries invoke the waiver, it could help to level up the divergence of national procedures of using Article 31 and 31bis, and remove uncertainties in cross-border collaborations,” the Indian envoy argued.

He clarified that “since members can opt out from a waiver option, certainly, for members who choose not to use it, they may not benefit from it, but it would not preclude other members who may choose to use the waiver to support quicker response, form coalitions and build up scales in production and supply.”

“Apart from this, we are trying to reflect the current developments in terms of mutations and emerging variants of the coronavirus,” he said, arguing that “currently, we are in the process of bilateral consultations with Members from both sides and will be in a position to finalize the text after incorporating the feedback received from Members bilaterally, in the near future.”

“We could consider convening a TRIPS Council meeting in the second half of May to discuss the revised text, should the Members show their willingness to have good-faith engagement on the text,” he said.

He urged members to avoid the circular discussions that have been going on for the past few months in this Council and “agree on text-based negotiations with an aim to find a common landing zone.”

AFRICAN GROUP’S STATEMENT

The African Group said it is important to ensure that COVID-19 vaccines are accessible at affordable prices to protect their entire populations. But due to the current inequitable distribution of vaccines and other medical products, it is becoming impossible to control the pandemic and the situation is worsening, with high income countries vaccinating at a rate 25 times faster than the lowest income.

Further, the current approach to production and supply is dependent on voluntary bilateral manufacturing agreements wherein the technology holding company maintains intellectual property monopoly, and decides how and where they want to produce and supply, the African Group said.

Such bilateral and voluntary licenses are failing to mobilize global production capacity and “contributing to inequity, prolonging the pandemic and costing lives of many people,” it said.

Ironically, while everyone agrees that no one is safe until everyone is safe, there has been a serious lack of global solidarity and collaboration to scale up global manufacturing and supply to meet the urgent needs of developing countries and least developed countries, it observed.

The TRIPS waiver proposal, submitted by India and South Africa on 2 October 2020, is being co-sponsored by 60 WTO members after six months.

Moreover, the waiver has secured “global endorsements from civil society, world leaders, Nobel laureates, academics, US lawmakers, EU Members of Parliament etc, all of whom recognize the need of lifting intellectual property monopolies so that there will be freedom to operate, and more open sharing of technology and know-how to support the scaling up of the manufacture, wherever possible, of Covid therapeutics, vaccines or other related medical products,” the African Group said.

“Unfortunately, a handful of members are intentionally delaying the decision of this crucial matter to be made irrespective of the overwhelming support it has gained,” it argued, adding that “since October 2020, we have been engaging in circular discussions in the TRIPS Council meetings as well as in small group meetings (and) as a result we have allowed the virus to transform itself into many variants.”

Against this backdrop, the waiver “was expected to be WTO’s contribution in the containment of COVID-19 through relaxation of Intellectual Property Rights for vaccines and therapeutics thereof.”

It expressed grave concern that the prolonged discussion on the waiver is a clear sign of WTO’s inability to resolve matters of great importance to the people.

Further, “the virus and its mutations have no boundaries, as the large parts of the world remain unvaccinated, more infectious variants will continue to circulate, and hence no country will be truly safe,” it argued.

“The only swift solution to contain and eradicate the virus is to enhance global solidarity in scaling up and diversify global production and supply of vaccines and treatment thereof,” the African Group argued.

It reiterated its call to initiate text-based negotiations with a view to closing this matter as soon as possible.

WASHINGTON’S STANCE

At the formal TRIPS Council meeting, the US delegate said that its top priority “is saving lives and ending the pandemic in the United States and around the world.”

“As Ambassador (Katherine) Tai, the US trade representative, said in her remarks at the WTO virtual conference on April 14, these extraordinary times require extraordinary leadership, communication, and creativity,” the US delegate said.

He said the Biden-Harris administration’s “$4 billion commitment to Covax demonstrates America’s leadership, and determination to support, equitable distribution of vaccines and funding globally.”

The COVAX facility being managed by the World Health Organization and Geneva-based GAVI (Global Vaccine Alliance) has not been able to adequately address the huge demand for vaccines for a large majority of the people in developing and least-developed countries, according to remarks made by the WHO Director-General Dr Tedros Adhanom Ghebreyesus.

The US delegate said Washington “is committed to working together with WTO members on a global response to COVID-19.”

Further, “we will continue to engage in discussions with other members to explore pragmatic and effective steps that support the production and equitable distribution of vaccines,” the US delegate said.

The other main opponents to the waiver – the EU and Switzerland – maintained their oft-repeated stand that the proponents have not addressed their questions until now, a charge that is not factually correct given the number of documents presented by the proponents for addressing the questions posed.