TWN Info Service on Trade, Intellectual Property and Health
3 March 2021
Third World Network
www.twn.my

South countries demand text-based negotiations on TRIPS waiver

(An earlier version of this article was first published in SUNS #9297 dated 3 March 2021)

Geneva, 2 Mar (D. Ravi Kanth) – Almost two dozen countries have demanded urgent text-based negotiations on concluding an agreement on the TRIPS waiver in combating the COVID-19 pandemic by suspending certain provisions of the WTO’s TRIPS Agreement to ramp up the production of diagnostics, therapeutics, and vaccines across many countries, trade envoys told the SUNS.

The temporary TRIPS waiver seeks to suspend certain provisions of the WTO’s TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information for the treatment, containment, and prevention of the Sars-Cov-2 virus, which causes COVID-19, by ramping up global production of diagnostic tools, therapeutics and vaccines.

Amidst a groundswell of support in the World Trade Organization for the proposed TRIPS waiver in combating the COVID-19 pandemic as well as from international civil society organizations, the opponents to the TRIPS waiver seem to have toned down their positions, said a person, who asked not to be quoted.

On 26 February, around 400 civil society groups, as well as two US Congressmen, called for an urgent decision from the Biden administration to support the TRIPS waiver on grounds that it could enable the scale-up of production of the diagnostic kits, therapeutics, and vaccines to contain the rapid spread of COVID-19, according to the participants at the meeting.

During the discussion on the TRIPS waiver proposal at the General Council meeting on 1 March, the developing countries coalesced around the joint proposal co-sponsored by 57 countries with support from more than 61 developing countries, said a person who asked not to be quoted.

Surprisingly, the United States and the European Union, the two major opponents, remained silent at the meeting, the person said.

The other major opponents such as Japan and Switzerland made mild statements without challenging the waiver, while New Zealand welcomed the TRIPS chair’s report, saying that it wants constructive discussions on the scope of the waiver.

CHAIR’S REPORT

In her statement at the meeting, the chair of the TRIPS Council, Ambassador Xolelwa Mlumbi-Peter from South Africa, delivered a short report saying that “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 and Egypt.”

Recently, the African Group and the least-developed countries (LDCs) also co-sponsored the proposal on the TRIPS waiver, bringing the total number of co-sponsors to 57.

Ambassador Xolelwa said “the Council continued its discussions under that agenda item at informal meetings on 20 November and 3 December, as well as at its resumed meeting on 10 December 2020. Following the status report to the General Council on 16-17 December 2020, the Council continued its consideration of the waiver request at informal meetings on 19 January and 4 February 2021, and at its formal meeting on 23 February 2021.”

“At those meetings,” she said, “delegations highlighted the common goal of providing timely and secure access to high-quality, safe, efficacious and affordable vaccines and medicines for all.”

The chair said that “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.”

Further, “delegations indicated a need for further discussions on the waiver request and views exchanged by delegations,” Ambassador Xolelwa said.

“This means 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 chair explained.

THE NEW DG’S “CAMOUFLAGED” POSITIONS

Speaking on the COVID-19 pandemic at the GC meeting, the new DG Ms Ngozi Okonjo-Iweala acknowledged for the first time that “we have a demand for a TRIPS waiver by a growing number of developing countries and the dialogue is intensifying.”

In her acceptance speech delivered at a special General Council meeting on 15 February, Ms Okonjo-Iweala had remained silent on the TRIPS waiver.

Instead, she spoke about a “third way” in her acceptance speech “to broaden access through facilitating technology transfer within the framework of multilateral rules, so as to encourage research and innovation while at the same time allowing licensing agreements that help scale up manufacturing of medical products.”

However the proposed “third way” seems to be more of the “same way” of business-as-usual approach that has failed to engage all potential manufacturers, especially in developing countries, and to increase supply so as to meet global demand. One year since the onset of the pandemic, equitable access remains elusive. Historically, promises of technology transfer in the context of WTO rules have largely remain unfulfilled, and there is no evidence to suggest that this time the situation will be any different, especially given the “voluntary” nature of the approach.

That “third way” is now “camouflaged” in her GC statement on 1 March, said a trade envoy, who asked not to be quoted.

At the GC meeting, Ms Okonjo-Iweala said, for example, “whilst this is happening (the discussion on the TRIPS waiver), I propose that we “walk and chew gum” by also focusing on the immediate needs of dozens of poor countries that have yet to vaccinate a single person,” suggesting that “people are dying in poor countries.”

She wants the pharmaceutical companies “to work with us (the WTO) on know-how and technology transfer now,” suggesting that there will “soon be a world manufacturing convention where we can seek to build this partnership.”

It is pretty confusing as to what she means by “a world manufacturing convention where we can seek to build this partnership,” said a person, who asked not to be quoted.

The new DG said that she hopes that “we can initiate a dialogue and information exchange between us (the WTO members) and representatives of manufacturers’ associations from developing and developed countries.”

Effectively, she has hidden the “third way” in her latest statement at the GC meeting by alluding to working with companies and a world manufacturing convention, the person said, while adding that the proposal is likely aimed at distracting discussions away from the text-based negotiations on the proposed TRIPS Waiver.

Ms Okonjo-Iweala acknowledged a problem raised by the TRIPS waiver proponents that “there is serious supply scarcity and some countries are out-bidding COVAX and diverting supplies.”

Ms Okonjo-Iweala said “the world has a normal capacity of production of 3.5 billion doses of vaccines and we now seek to manufacture 10 billion doses,” adding that “this is just very difficult, so we must focus on working with companies to open up and license more viable manufacturing sites now in emerging markets and developing countries.”

Therefore, the interim solution suggested by Ms Okonjo-Iweala, who was chair of the Geneva-based GAVI (the Vaccine Alliance) Board, is as good as dead on arrival because she fails to recognize that for Big Pharma, profits and patents come before saving human lives, said another participant, who asked not to be quoted.

SOUTH AFRICA’S STATEMENT

In a sharp statement, South Africa’s TRIPS negotiator, Mr Mustaqeem De Gama, said that, as apparent from the chair’s oral report, the “co-sponsors provided various clarifications and written replies to address issues and questions raised by other WTO Members in various formats, including in formal and informal meetings of the TRIPS Council, small group and bilateral meetings.”

He argued that members “have not yet reached consensus on this matter, therefore, the co-sponsors, which now include both the African Group and the LDC Group, are in favour of moving to text-based discussions based on Article IX:3 of the Marrakesh Agreement.”

Citing the DG’s remarks that members “do not have time, in order to save lives, this issue must be addressed in the shortest possible time frame,” Mr De Gama said “it is unlikely that enough vaccines will be manufactured in 2021 or even 2022 to meet the global demand or to achieve global population immunity.”

He said while the “DG emphasized that the normal capacity of production stands at 3.5 billion doses”, and that the proponents “now seek to manufacture at least 10 billion, the global need is likely to be greater than 10 billion doses, given that the world population is 8 billion, and generally 2 doses are required, and with mutations emerging, populations will require to be re-vaccinated.”

The South African negotiator drew attention to the “unused capacity [that] exists in the developing world which should be accessed in order to ramp up production in the shortest possible time.”

He argued that “attempts must be made to engage and allow all possible producers across the world to scale up production,” suggesting that “up to this point voluntary approaches have not worked.”

“What we are proposing is a limited scope and a temporary Waiver that would provide countries with the policy space needed to collaborate in research and development (R&D), manufacturing, scaling up, and supplying COVID-19 tools which are currently in short supply,” Mr De Gama argued.

The South African negotiator emphasized that “the Waiver is an instrument that is provided for in the WTO legal framework in exceptional circumstances,” adding that “no one can dispute that COVID-19 is an unprecedented crisis facing the global economy today.”

The proponents are ready to demonstrate their flexibility “to engage on the scope and timeframe for the application of the Waiver and we are ready to engage in constructive text-based discussions with Members towards a solution,” Mr De Gama said.

He warned that the world cannot afford any more delays and it should be the most urgent priority for the WTO. “History will judge us harshly should we fail to provide a credible response to this crisis. The time to act is now,” he said.

Mr De Gama praised the countries that made “generous financial contributions to international collaborative mechanisms such as COVAX, with 180 countries including 90 self-financing upper-middle- and high-income countries and 92 low-and middle-income countries participating in COVAX.”

“However, it is quite evident that COVAX has not yet secured sufficient funding for an adequate number of vaccines to reach its goal of 20% coverage for all participating countries in 2021,” he said, suggesting that “this poses a challenge for many countries who primarily rely entirely or largely on COVAX to secure access to vaccines.”

“Only truly global and inclusive solutions will save lives, the Waiver is the only possible way to address universal, equitable and timely access to live-saving medical products, including vaccines, diagnostics and therapeutics,” he concluded.

INDIA’S STATEMENT

At the GC meeting on 1 March, India’s trade envoy Ambassador Brajendra Navnit issued a strong statement, emphasizing that the TRIPS waiver proposal is now being co-sponsored by 57 members, suggesting that the proponents have answered all questions and provided evidence about how the IPRs remain a main hindrance for ramping up production of COVID-19 diagnostics, therapeutics and vaccines.

Ambassador Navnit cited a recent study that has “estimated that the global economy stands to lose as much as USD 9.2 trillion if the international community fails to ensure developing economy access to COVID-19 vaccines.”

The Indian envoy argued, based on that study’s finding, that “advanced economies even if they vaccinate all of their citizens, will remain at risk of a sluggish recovery with a drag on GDP if infection continues to spread unabated in emerging markets.”

He quoted the UN Secretary-General Antonio Guterres as having said that “the progress on vaccinations has been wildly uneven and unfair, and that more than 130 countries have not received a single dose.”

The UN Secretary-General has warned, “if the virus is allowed to spread like wildfire in the global South, it will mutate again and again and that this can prolong the pandemic significantly, enabling the virus to come back to plague the global North,” according to the Indian trade envoy.

Therefore, “to slow down the virus’s ability to infect new people and mutate further, we need true vaccine internationalism and TRIPS Waiver is an effective and pragmatic way to achieve it,” the Indian envoy argued.

Ambassador Navnit mentioned the generous contributions of vaccines provided by India to 35 countries. He went on to challenge the arguments made by the developed countries.

“The delegations that oppose the temporary waiver proposal have argued on one hand that the Waiver, if granted, will not result in augmenting the manufacturing capacity and on the other hand, they argue that the waiver will impact the commercial interests of existing IP holders as a lot of manufacturing could come into play without agreement with the IP holders.”

The Indian envoy sought to “understand this dichotomy that if Waiver will not lead to increase in manufacturing capacity, meaning, no new manufacturers will enter into production of Covid products even with the proposed waiver in place, then how will the commercial interests of existing IP holders be impacted?”

“On the other hand, if manufacturing is going to increase significantly and thereby impacting commercial interests of IP rights holders, then are we not agreeing that the final objective in the present scenario is to increase manufacturing,” Ambassador Navnit emphasized.

He said that “some Members have questioned whether the Waiver is a proportional response to the pandemic,” suggesting that “since the outbreak of the pandemic, almost every country implemented, or is still implementing, lockdown in some form or other to curtail the spread of Covid.”

Ambassador Navnit suggested that it “does not mean that authorities were against the principle of “right to freedom of movement”,” arguing that “governments worldwide have introduced fiscal packages to the tune of billions of US dollars to help the recovery of ailing economies.”

“That does not mean that they have deviated from their stated objective of fiscal consolidation towards fiscal profligacy. In the same light, the temporary waiver from certain provisions of TRIPS Agreement by following due process does not mean that the co-sponsors are against the principle of Intellectual Property Rights,” he clarified.

He reminded the members that “we should not forget that research and innovation during this period has been spearheaded by massive public funding, expedited regulatory approvals, and global collaboration.”

It is little wonder that “the global community has resorted to exceptional measures in the exceptional circumstances of the COVID pandemic, and the Waiver should be seen in similar vein,” Ambassador Navnit emphasized.

According to the Indian envoy, “globally, Governments have intervened to suspend air transport and restrict mobility in order to prevent the spread of coronavirus” and “sectors like civil aviation, travel and tourism, hospitality, small businesses including MSMEs (micro, small and medium enterprises) continue to be severely impacted by such state interventions.”

He drew attention to the sharp drop of trade in travel services by 68% in the third quarter of 2020 as compared to the same period in 2019. He said trade in transport services also declined by 24% over the same period. These sectors, according to the Indian envoy, are also important for growth and employment.

Ambassador Navnit pointedly asked “why are commercial interests of only a few (pharmaceutical) companies so sacrosanct?”

“If it is to preserve incentives to innovate, then such commercial loss, to the tune of few tens of billions of USD at the maximum, can always be compensated by further incentives through pooling of public funding and global coordination,” he suggested.

“On the other hand,” said Ambassador Navnit, “one percent improvement in global GDP from the baseline scenario will give US$850 billion worth of global output.”

“Therefore, an outcome on the Waiver will not only help in saving valuable human lives but will also give a comforting signal to boost the consumer confidence in the economy and will accelerate the recovery of world trade and global GDP,” he emphasized.

Responding to another issue raised by the opponents to the TRIPS waiver proposal that it would come in the way of the COVAX facility, the Indian envoy clarified that the “temporary waiver of certain provisions of TRIPS Agreement is only going to aid in meeting the final objective of COVAX.”

He said that “COVAX is a demand side initiative” and “it does not address supply side constraints.”

Ambassador Navnit cautioned that if members “do not address supply side issues, then we will not be able to increase the production of vaccines,” arguing that the “Waiver will help the COVAX mechanism by augmenting the manufacturing capacity globally.”

Lastly, he said the proponents of the waiver “cannot continue to engage in endless discussions while millions of lives and livelihoods are lost to the coronavirus pandemic.”

Countries need “concerted efforts by all WTO Members to ensure that the WTO makes a meaningful contribution to defeat COVID-19 and prove that WTO can indeed deliver in crisis situations.”

Ambassador Navnit said “the proponents are ready to engage in good faith and have frank discussions on the text of the Waiver, relating to both its duration and scope, in order to operationalise the waiver in the shortest possible time.”

Against this backdrop, he said “moving to a text-based negotiation may appear to be yielding from the high moral ground of being the sole protectors of IP rights for some members, but not doing so means a willingness to stand by a poor choice, devoid of ground realities and just opposite to what is the need of the hour.”

The Indian envoy urged “the Members to reach consensus on the Waiver Proposal to ramp up production for the cause of truly ensuring fair, equitable and affordable access to Covid-19 products in a timely manner.”

The proponents “sincerely hope that the Proposal will reach a common landing zone and not suffer the repeated blocking of text-based negotiations,” he concluded.

The ACP Group thanked the “co-sponsors for their hard work, and take this opportunity to invite other members to engage constructively with a view to finding a landing zone.”

“In order to move to such a landing zone, the ACP Group would support a move to text-based discussions,” the ACP Group said, emphasizing that “this seems to be the most effective way to tailor the waiver to a consensus approach without being tied up in a continuous evidentiary loop.”

The African Group pointed to “the positive calls from many quarters that opposition to the TRIPS waiver may further exacerbate a dangerous North-South divide when it comes to COVID vaccines and therapeutics towards suppressing the pandemic on a global scale, with the goal that no-one is safe until everyone is safe.”

It argued that “encouraged by such calls and as the TRIPS Council continues the consideration of the waiver proposal, the African Group supports that we shift to text-based negotiations.”+