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TWN Info Service on Trade, IP and Health
14 December 2021
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US, EU, India, South Africa hold talks on TRIPS waiver compromise
Published in SUNS #9480 dated 14 December 2021

Geneva, 13 Dec (D. Ravi Kanth) –  The trade chiefs of the United States, the European Union, India, and South Africa held two rounds of discussions on how to overcome their differences on the temporary TRIPS waiver that has assumed heightened urgency amidst the worsening COVID-19 pandemic due to the emergence of the new Omicron variant of the SARS-CoV-2 virus, said people familiar with the development.

The talks among the four trade chiefs – the US Trade Representative (USTR) Ambassador Katherine Tai, the EU trade commissioner Mr Valdis Dombrovskis, the Indian trade minister Mr Piyush Goyal, and the South African trade minister Mr Ebrahim Patel – were apparently facilitated by the WTO director-general Ms Ngozi Okonjo-Iweala, and her deputy director-general Ms Anabel Gonzalez from Costa Rica, said people, who asked not to be quoted.

The two rounds of talks were held virtually, with the first round lasting two hours and the second round of talks lasting for three hours on 11 December.

Several issues such as the scope of the waiver, the coverage of products, the duration of the waiver, and other legal issues, including Articles 28, 30 (on limited exceptions) and 31 (on compulsory licensing provisions) of the WTO’s TRIPS Agreement, dominated the discussions.

From the two rounds, the positions held by the four members are apparently becoming clear.

At the virtual meeting, the US, which had supported the temporary TRIPS waiver from May this year, has apparently stated that the US administration can agree to a waiver that is focused only on vaccines, said people, who asked not to be quoted.

The USTR’s position would exclude the coverage of items such as health products and technologies, including diagnostics and therapeutics.

Even though the temporary TRIPS waiver has been fully supported by a large number of US Congress persons, civil society organizations, and a large number of scholars, the USTR’s position seemed somewhat ambiguous, said a person, who asked not to be quoted.

Apparently, due to enormous pressure from Big Pharma, particularly Pfizer, the US seems to have been squeezed in its overall stance on the waiver, the person said.

INDIA & SOUTH AFRICA REMAIN FIRM ON WAIVER

During the discussions, India and South Africa, who have steered the waiver proposal for more than a year, remained steadfast in their demand for suspending TRIPS provisions relating to copyrights, industrial designs, patents, and protection of undisclosed information “in relation to health products and technologies including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components, and their methods and means of manufacture for the prevention, treatment or containment of COVID-19.”

Failure to act on the waiver proposal, which was first submitted back in October 2020 and was followed by a draft ministerial decision in May this year, has created “vaccine inequity” and “vaccine apartheid” leading to the emergence of new variants like the Delta variant and now the Omicron variant, according to statements made by leaders from various countries.

The waiver proposal, which was co-sponsored by 64 countries, with substantial support from more than 50 other countries, has been blocked by the EU, Switzerland, and the United Kingdom among others at every meeting of the TRIPS Council.

During the discussions among the four trade ministers last week, both South Africa and India demanded that the waiver proposal be agreed to by the end of this month.

Both South Africa and India apparently refused to budge from their stated positions on the scope of the temporary waiver, given the need to address the myriad issues arising from the worsening pandemic, said people who asked not to be quoted.

The revised draft ministerial decision on the TRIPS waiver, which was submitted on 25 May this year, has called for an agreement on the following issues:

1. The obligations of Members to implement or apply Sections 1 (copyrights), 4 (industrial designs), 5 (patents) and 7 (protection of undisclosed information) of Part II of the TRIPS Agreement (or to enforce these Sections under Part III of the TRIPS Agreement) shall be waived in relation to health products and technologies including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components, and their methods and means of manufacture for the prevention, treatment or containment of COVID-19.

2. The waiver shall be in force for at least 3 years from the date of this decision. The General Council shall, thereafter, review the existence of the exceptional circumstances justifying the waiver, and if such circumstances cease to exist, the General Council shall determine the date of termination of the waiver.

3. The waiver in paragraph 1 shall not apply to the protection of Performers, Producers of Phonograms (Sound Recordings) and Broadcasting Organizations under Article 14 of the TRIPS Agreement.

4. This decision is without prejudice to the right of least developed country Members under paragraph 1 of Article 66 of the TRIPS Agreement.

5. This waiver shall be reviewed by the General Council not later than one year after it is granted, and thereafter annually until the waiver terminates, in accordance with the provisions of paragraph 4 of Article IX of the WTO Agreement.

6. Members shall not challenge any measures taken in conformity with the provision of the waivers contained in this Decision under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994, or through the WTO’s Dispute Settlement Mechanism.

With support from former world leaders, parliamentarians, more than 100 civil society organizations, and Nobel Laureates, the waiver proposal has become a global force in fighting the COVID-19 pandemic.

EU DRAGS ITS FEET & STICKS TO ITS PROPOSAL

The EU, which has opposed the waiver proposal on “ideological” grounds in the TRIPS Council meetings and has refused to engage in the text-based negotiations, has apparently stuck to its proposal that seeks to waive certain provisions concerning compulsory licensing in Article 31 of the TRIPS Agreement.

The EU’s proposal seeks to “waive the requirement of making efforts to obtain authorization from the right holder, provided for in Article 31(b),” and Article 31(h) allowing that a member may provide, “for the purposes of determining the remuneration to be paid to the (patent) right holder pursuant to Article 31(h) and paragraph 2 of Article 31bis of the TRIPS Agreement, that the remuneration reflects the price charged by the manufacturer of the vaccine or medicine produced under compulsory licence.”

The EU proposal appears to have failed to demonstrate any novel elements other than what are currently existing in the TRIPS Agreement.

Several other clarifications by the EU, including the applicability of the CL (compulsory license) facility for exports beyond the domestic use, are already contained in Article 31bis that was negotiated as part of the Doha Declaration on the TRIPS Agreement and Public Health in 2001.

The EU’s main emphasis that manufacturers can enter into production for supplying vaccine doses at low and affordable prices, particularly to GAVI (The Vaccine Alliance), seems like missing the forest for the trees, said people, who preferred not to be quoted.

The EU, which reckons that there is nothing wrong with the global IPR system, prefers the pursuit of “opaque” voluntary licenses as one of the best options for ramping-up production of diagnostics, therapeutics and vaccines. (See SUNS #9375 dated 28 June 2021).

However, the failure to suspend other provisions of the TRIPS Agreement as demanded by India and South Africa could undermine the central purpose of the waiver proposal, said people, who asked not to be quoted.
 
EXPERTS’ MEETINGS

Following the two rounds of meetings at the ministerial level, the discussions will be continued on Tuesday and Wednesday among experts drawn from the governments and outside.

Apparently, the WTO deputy director-general Ms Anabel Gonzalez from Costa Rica will convene the meetings at the expert level.

In the past, when Ms Gonzalez worked as the head of the WTO agriculture division during 2006 to 2009, then chair of the Doha agriculture negotiating body Ambassador Crawford Falconer from New Zealand apparently refused to deal with her because of certain alleged controversies, said people, who asked not to be quoted.

“Ms Gonzalez has no expertise in the IPR issues other than agriculture,” said an IPR expert, who asked not to be quoted.
 
GROWING FEARS ABOUT “VACCINE INEQUITY”

It is important to note that “vaccine inequity” is not just resulting in a health crisis but is also spilling over into multiple crises including economic and financial crisis, equally impacting both developing and developed countries, said another expert, who asked not to be quoted.

“Protecting the interests of a few Big Pharma companies can impoverish millions and lead to loss of lives all around the world,” the expert said.

This calls for a coordinated, global strategy to end the pandemic with the ultimate goal of not only producing a safe and effective vaccine but to also make it available and affordable for everyone, particularly to those in low- and middle-income countries, the expert said.

However, while vaccines can reduce the probability of catching the virus, for treating those who are infected, countries need other related medical equipment like ventilators, personal protective equipment etc.

Therefore, the TRIPS waiver is needed not just in relation to patents on the vaccines but also on other intellectual property rights such as industrial designs, trade secrets and copyrights, and everything else related to the pandemic, including medical products such as tests and ventilators, the expert said.

Further, the compulsory licensing provision under Article 31 of the TRIPS Agreement is being touted as a solution by some countries.

However, while this provides Members the flexibilities to cater to emergency public health situations, compulsory licenses are usually deployed on a country-by-country and case-by-case basis, and must be enabled in the national legal framework and regulations, which currently may not be the case with many countries.

Invoking them on a product-specific basis across a wide range of health products may prove to be cumbersome.

For countries with insufficient or no manufacturing capacity, Article 31bis of the TRIPS Agreement does provide for import and export of pharmaceutical products.

However, the process to be followed by the importing or exporting Member of pharmaceutical products under Article 31bis is highly cumbersome and lengthy.

Also, this provision applies only to “pharmaceutical products”, whereas other non-pharmaceutical products and technologies are also required to prevent and contain the COVID-19 pandemic.

Lastly, the proceedings of the meetings between the four members must be debriefed to all the WTO members to ensure that they are kept in the loop. Otherwise, the likely chances of foisting a compromise solution on them can raise serious credibility issues.

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