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TWN Info Service on Trade, IP and Health
8 June 2021
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EU proposal seeks to derail TRIPS waiver discussions at WTO
Published in SUNS #9361 dated 8 June 2021

Geneva, 7 Jun (D. Ravi Kanth) – The European Union on 4 June tabled a proposal at the WTO on a “global trade initiative for equitable access to COVID-19 vaccines and therapeutics”, in what appears to be a calculated attempt to undermine the ongoing discussions on a proposed TRIPS waiver that have become the global focus for combating the COVID-19 pandemic, said people familiar with the development.

Embracing the WTO Director-General Ms Ngozi Okonjo-Iweala’s “third way” approach, in its proposal titled “Urgent trade policy responses to the COVID-19 crisis”, the EU says that it “strongly supported the WTO Director-General in her initiative to consider practical ways to enhance production capacity and cooperation with the private sector”.

The EU submitted its three-page proposal simultaneously to the WTO’s TRIPS Council (IP/C/W/680) and the General Council (WT/GC/231) on 4 June, arguing that “the most urgent challenge now is to ensure a rapid and equitable roll-out of vaccines and therapeutics globally, as this is the only way to control the virus effectively.”

The EU says that “the rules-based” WTO can contribute to expanding the production of and equitable access to COVID-19 vaccines and therapeutics.

While the EU has claimed that there is growing support for its multilateral trade and health initiative, the facts on the ground suggest that the EU and its other partners in the Ottawa Group appear to have failed to garner support for its initiative.

Until now, the Ottawa Group of 13 members, including the EU, and a few other countries have supported the trade and health initiative, according to people familiar with the development.

The EU says that it has been engaged in the discussions on the TRIPS waiver proposal.

However, a cursory glance at the EU’s engagement in the TRIPS Council during the past eight months appears to reinforce its hostile opposition to the waiver despite being provided all the evidence (IP/C/W/672 and IP/C/W/673) as to why suspending key provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information (trade secrets) is the best route to ramp-up production of vaccines, diagnostics, and therapeutics across countries for combating the COVID-19 pandemic on an expeditious basis, said people following the discussions since October last year.

The TRIPS waiver proposal, initially submitted by South Africa and India last October, is being co-sponsored by 63 countries, with China and 50 more countries further supporting it.

Moreover, more than 400 international civil society groups and hundreds of parliamentarians as well as more than 100 leaders and Nobel Laureates have called for the speedy approval of the waiver proposal.

The co-sponsors of the temporary waiver proposal submitted a revised proposal last month aimed at text-based negotiations and it seems to have gained momentum, said people familiar with the revised waiver proposal.

The United States has endorsed the waiver proposal, saying that it is ready to participate in the text-based negotiations. Earlier, New Zealand and Ukraine also said they will participate in the text-based negotiations.

Against this backdrop, the EU seems determined to distract members from the waiver discussions.

After having blocked the waiver proposal on extraneous grounds during the last eight months, the EU now wants “WTO Members [to] agree as soon as possible on a global trade initiative for equitable access to COVID-19 vaccines and therapeutics encompassing the following three components: (1) trade facilitation and disciplines on export restrictions; (2) expansion of production, including through pledges by vaccine producers and developers; and (3) clarification and facilitation of TRIPS Agreement flexibilities relating to compulsory licences.”

When asked whether the EU has removed all its export restrictions, a senior EU official told the SUNS that the EU has relaxed all its export restriction-related provisions while admitting that there are some provisions that are still being implemented transparently.

In its proposal, the EU argues that while “the General Council should be the forum to address all three components in a comprehensive manner, the third component on intellectual property is in the remit of the Council for TRIPS. For this reason, the EU is presenting the specific elements related to intellectual property to the Council for TRIPS.”

The three components, which form part of the Ottawa Group’s “trade and health initiative”, have already been discussed in detail at the WTO General Council meetings in March and May, and they seem to have failed to secure any support during those meetings, said people familiar with the discussions.

The EU maintains that necessary incentives and rewards enabled research and development in the rapid production of vaccines, underscoring the “value of intellectual property, in terms of the necessary incentives and rewards to research and innovation.”

It says that intellectual property “should also play an important role in enabling equitable access to COVID-19 vaccines and therapeutics.”

During the discussions in the TRIPS Council on the waiver proposal, the 63 co-sponsors had demonstrated how the four key provisions in the TRIPS Agreement remain a barrier for rapid production across countries.

In less than a year, “the global production of COVID-19 vaccines has gone from 0 to 2 billion doses produced by end of May 2021” and is likely to cross 10 billion doses by the end of this year, the EU suggested in its proposal.

Up until now, there has neither been equitable sharing of vaccines nor any attempt to share technology except in a few cases that are shrouded in “opaque” contractual legalese, said a person, who asked not to be quoted.

TRIPS FLEXIBILITY AND WAIVER

Along with the three aspects of the trade and health initiative, the EU has now introduced, in its proposal, clarifications on the provisions on compulsory licensing in the TRIPS Agreement.

The EU says that “the 2001 Doha Declaration on the TRIPS Agreement and Public Health clarifies the links between the TRIPS Agreement, its flexibilities and public health,” adding that the Doha Declaration “affirms that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health.”

Clarifying the TRIPS flexibilities, the EU says that all WTO Members should be ready to agree on three elements.

They include: (a) the pandemic is a circumstance of national emergency and therefore the requirement to negotiate with the right holder may be waived; (b) to support manufacturers ready to produce vaccines or therapeutics at affordable prices, especially for low- and middle-income countries, on the basis of a compulsory licence, the remuneration for patent holders should reflect such affordable prices; and (c) that in the context of the Article 31bis mechanism with respect to CL for exporting, the exporting Member may provide in one single notification a list of all countries to which vaccines and therapeutics are to be supplied directly or through the COVAX Facility.

CREDIBILITY OF EU’S PROPOSAL

That the EU is determined to undermine the text-based negotiations on the TRIPS waiver proposal is well known, even before submitting its proposal on 4 June, said an analyst, suggesting that Brussels’ proposal fails to “recognize that intellectual property concerns in relation to COVID-19 health technologies go beyond patents.”

The former South African TRIPS negotiator Mr Mustaqeem De Gama has explained several times in the TRIPS Council meetings as to why the waiver proposal goes beyond patents to include copyrights, industrial designs, and protection of undisclosed information for ramping up production of diagnostics, therapeutics, and vaccines, and sharing of health-related technologies for combating the COVID-19 pandemic.

Commenting on the specific clarifications provided by the EU in its proposal, analysts said that “Article 31(b) of TRIPS already exempts countries from seeking prior negotiation with patent holders when using compulsory licensing in situations of national emergency, or other circumstances of extreme urgency or in cases of public non-commercial use.”

And this exemption, according to analysts, “is also applicable to Art.31bis mechanism as compulsory licences (CLs) under that mechanism are generally to be issued as per Art. 31 of TRIPS.”

With the pandemic qualifying as a “national emergency”, there is little doubt as Paragraph 5(c) of the Doha Declaration on the TRIPS Agreement and Public Health has already clarified that: “Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency”.

The EU’s proposal, according to analysts, “implies that an authoritative interpretation by WTO is required BUT this is NOT the case as it is up to each country to decide what constitutes a national emergency.”

As regards payment to the patent holder in Article 31 (h), the TRIPS Agreement already provides countries full freedom to set the level of “adequate remuneration” to be paid to a patent holder under a compulsory license, said analysts.

Interestingly, what the EU has proposed as its novel interpretation in its proposal is already allowed by Article 31bis.

Consequently, analysts argued that “the proposals in the EU communication are absolutely pointless.”

Dimitri Eynikel, EU Policy Advisor for the Access Campaign of the international humanitarian organization MSF (Medecins Sans Frontieres/Doctors Without Borders), called the proposal “disingenuous and endangers public health globally,” adding that in “this raging pandemic, countries need to have all options at their disposal to encourage the manufacturing of COVID-19 medical tools across the world. The EU and other nations opposing this waiver need to stop blocking other countries’ efforts to protect their populations in a public health emergency.”

More importantly, “the co-sponsors of the TRIPS waiver proposal have argued in detail in IP/C/W/673 (paras 28-53) that the CL mechanisms in Art. 31 and Art. 31bis are wholly inadequate to address the supply challenges of the global pandemic,” analysts said.

Despite considerable enumeration on the “deficiencies of the Art. 31bis mechanism,” the EU is seemingly sticking to its flawed views, said analysts.

Meanwhile, many members of the European Parliament are making efforts to garner support for the waiver proposal.

Last month, the European Parliament adopted a resolution on ending the HIV/AIDS epidemic by 2030, wherein a clear call was made to support the TRIPS waiver proposal.

In short, said analysts, the EU communication lacks credibility, as it appears to be “an attempt to derail the will of more than 100 countries”.

“EU has basically turned Big Pharma’s talking points into a confusing proposal that contradicts itself and ignores the shortcomings of existing regulations, including in its own territory where compulsory licenses alone would not be enough to achieve the stated goals of the proposal,” said an analyst, preferring not to be quoted.

EU FACES VOLLEY OF QUESTIONS

Ahead of the circulation of the EU’s proposal at the WTO, the EU’s senior officials held a press conference to highlight the central elements of their proposal.

Faced with a volley of questions on the credibility of the EU’s proposal and whether it is aimed at sabotaging the waiver discussions, in which Brussels together with a handful of countries, have continually adopted hostile positions against the waiver proposal, a senior EU official said they are engaged in the waiver discussions, arguing that their proposal is aimed at finding a rapid solution.

Another EU official claimed that the proponents of the waiver have failed to offer evidence as to how IPRs constituted a barrier for the development of vaccines.

Asked why the EU has remained silent on IPR issues concerning copyrights, industrial designs, patents and trade secrets, the EU official said countries cannot force pharmaceutical companies to transfer their technology, given the complexities of the new technologies for producing vaccines.

From the tone and tenor of the responses from the EU officials, it appears that their goal is to shift the focus from the waiver to their proposal, and muddy the negotiations without any outcome on this vital issue, said people familiar with the EU’s intentions.

Meanwhile, in a statement issued on 7 June, MSF “denounced the European Union and other countries including the UK, Switzerland and Norway for employing delay tactics instead of agreeing to start formal negotiations on this critical waiver at a time when COVID-19 has already killed more than 3.5 million people across the globe and there are stark inequities in access to COVID-19 medical tools.”

“One month ago, the US signaled its support for the waiver in a groundbreaking move. On 4 June, the EU published a counter-proposal focusing on “compulsory licensing”, which brings nothing significantly new to the table and instead is merely a maneuver to stall the waiver negotiation process,” MSF said in its statement.

“If adopted, the waiver would provide countries with a critical policy space to address intellectual property (IP) barriers to increase collaboration in research and development, manufacturing, scale-up, and supply of COVID-19 medicines, vaccines and other health technologies. Waiving monopolies would help level the playing field in this pandemic and ensure access to critically important COVID-19 medical tools for everyone who needs them, regardless of where they live,” MSF said.

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