TWN Info Service on Trade, IP and Health
11 June 2021
Third World Network
www.twn.my

WTO Members agree to text-based negotiations on revised TRIPS waiver
Published in SUNS #9364 dated 11 June 2021

Geneva, 10 Jun (D. Ravi Kanth) – The 63 co-sponsors of the TRIPS waiver proposal to combat the COVID-19 pandemic on 9 June secured the “green light” for starting from next week text-based negotiations at the World Trade Organization based on their revised proposal, amidst rising global momentum for a decision in favour of the waiver, said people familiar with the development.

At a formal meeting of the WTO’s TRIPS Council held on 8-9 June, the co-sponsors of the TRIPS waiver proposal, who are now being supported by more than 50 countries, including Malaysia and Vietnam, called for concluding the TRIPS waiver discussions by end-July.

With more than 3.7 million deaths and 175 million registered cases of the SARS-CoV-2 virus globally so far, the co-sponsors appealed to members to singularly focus the discussions on their revised waiver proposal so as to ensure an early outcome in order to save lives from the worsening pandemic.

Even as the tide has turned towards an early outcome in favour of the TRIPS waiver at the WTO and outside, attempts are being made to club together unrelated proposals such as the one circulated by the European Union in the discussions purportedly to distract the text-based negotiations based on the revised proposal, said several people familiar with the development.

While the co-sponsors of the TRIPS waiver have gone through rough waters for the past eight months, with a handful of countries placing roadblocks on “ideological” grounds at each meeting, there is now a grudging recognition that they will not be able to stop the international momentum in favour of the temporary TRIPS waiver, said a person, who asked not to be quoted.

More importantly, by clubbing together diametrically opposing proposals for discussions starting next week, the chances of confounding the discussions and undermining the waiver proposal remain very high, the person said.

The chair of the WTO TRIPS Council, Ambassador Dagfinn Sorli from Norway, apparently conveyed to the members that since there are other proposals on the table now, they will all be discussed, said people familiar with the development.

Essentially, the chair’s move could be tantamount to muddying the waters by clubbing together two diametrically opposing proposals that have been submitted at different points of time with different objectives, said people, who asked not to be quoted.

TRIPS CHAIR’S STATEMENT

At the formal TRIPS Council meeting that concluded on 9 June, the chair Ambassador Sorli indicated that he will convene an informal meeting on 17 June to discuss the way forward in a substantive way. He suggested the steps to be taken before the General Council meeting next month.

Ambassador Sorli urged members to engage directly with each other to complement the process, which, he said, will be under his own responsibility.

The chair referred to the WTO Director-General Ms Ngozi Okonjo-Iweala’s statement that the issue of equitable access to vaccines, diagnostics, and therapeutics is a moral and economic issue.

The chair also said that members share the common goal of providing equitable access to these products for the global population as soon as possible, even if they differ on where to place the emphasis of this endeavour, according to people familiar with the development.

CO-SPONSORS SET THE GROUND

At the formal TRIPS Council meeting, South Africa, on behalf of the co-sponsors of the TRIPS waiver proposal, set the ball rolling by emphasizing that “the pandemic continues to rage on, as co-sponsors, we have on numerous occasions called for our negotiations to be brought to an expeditious end.”

The revised waiver proposal was issued on 25 May and it contains several operational paragraphs.

They include:

1. The obligations of Members to implement or apply Sections 1, 4, 5 and 7 of Part II of the TRIPS Agreement (copyrights, industrial designs, patents, and protection of undisclosed information) 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. This 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 waiver 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.

Explaining the salient aspects of the revised waiver proposal at the meeting, South Africa’s TRIPS negotiator Mr Mustaqeem De Gama stressed that “ending the pandemic everywhere in a timely manner is a public good and should be an overarching priority for the WTO.”

He said the co-sponsors want members to “get into a line-by-line discussion of the revised waiver proposal” that was submitted last month.

Mr De Gama said “the economic consequences unleashed by COVID-19 will continue for as long as inequitable access to health products and technologies persist, including vaccines, therapeutics and diagnostics.”

He underscored the need for regular meetings in different configurations of plenary and open-ended small group settings.

“As co-sponsors we have been active and have racked up a prodigious number of bilaterals in the last two months, and in the last 3 weeks we have reached out to several delegations to discuss the changes to our waiver proposal,” he said.

Given the paucity of time in the face of a ravaging pandemic, the South African TRIPS negotiator said “we look forward to making substantial progress towards the next General Council meeting (in July).”

As co-sponsors, he said, “we remain flexible on the mode of interaction and would have already indicated 3 elements in our 31 May statement that can be discussed with greater focus and granularity going forward.”

He explicated the central aspects of the revised waiver proposal to address the concerns raised by members and by “focusing the text on “health products and technologies”,” noting that the prevention, treatment or containment of COVID-19 involves a range of products and technologies including diagnostics, therapeutics, vaccines, medical devices and personal protective equipment.

He said the IP issues may “arise with respect to the products and technologies, their materials or components, as well as their methods and means of manufacture.”

Mr De Gama explained that “the continued surge of COVID-19 highlights the critical importance of meaningful access to personal protective equipment (PPE), tests, therapies, and vaccines to prevent spread and reduce illness and death in high-risk populations and settings.”

These resources, said Mr De Gama, “are acutely needed in many communities, with documented shortages and access barriers across the continuum of care,” adding that “it is clear that the prevention, containment and treatment of COVID-19 involves a range of health products and technologies.”

He said that “the same logic applies to diagnostics, how will we know if we are winning the battle against COVID- 19 if we do not have robust testing regimes in place,” suggesting that “quick identification of cases, quick treatment for those people and immediate isolation to prevent spread of the coronavirus is very important.”

The waiver proposal calls for suspending the application, implementation, and enforcement of TRIPS provisions on copyright (Section 1), industrial designs (Section 4), patents (Section 5) and protection of undisclosed information (Section 7).

These four categories of the IP system are “relevant to the production, supply, and access to COVID health products and technologies.”

He said that “paragraph 3 of the revised text makes explicit that the waiver will not apply to the protection of Performers, Producers of Phonograms (Sound Recordings) and Broadcasting Organizations under Article 14 of the TRIPS Agreement.”

As regards operative paragraph 2 in the revised text, he said a paragraph has been added on the proposed duration of the temporary waiver for at least three years.

The General Council “shall determine the date of termination of the waiver, once the exceptional circumstances justifying the waiver cease to exist,” the South African official said.

He said “the co-sponsors stand ready to deal with each of the categories in a line-by-line discussion,” arguing that they would be relying on the chair “to facilitate our discussion based on a schedule that can be agreed so as to create predictability and to ensure the best use of the months of June and July in order to make substantial progress in our negotiations.”

On behalf of the co-sponsors, he assured members that they “will continue to engage constructively and show the necessary flexibility towards finding a balanced outcome that has at its core the ramping up and diversification of production across the world.”

“This is critical in ensuring resilience against the current pandemic but also as a start, to prepare us for future pandemics,” he concluded.

INDIA’S STATEMENT

India, which is the lead co-sponsor of the TRIPS waiver along with South Africa, explained the five changes that were made in the revised text. They include three changes to the preamble and the other two concerning the scope and duration.

The Indian trade envoy Ambassador Brajendra Navnit said the first change underlined “emerging variants and mutations that reinforces the belief that the solution must be global and timely or else the virus and its mutations and variants would outpace and beat the solutions designed.”

The second change, the Indian envoy said, “is made to integrate elements from TRIPS Council Chairs’ report to the GC [General Council] reflecting solidarity shown by the membership in treating this as a global problem that needs a global solution.”

The third change in the preamble, according to the Indian envoy, “reflects the balance between commercial interests of IP rights holders and public health at large also showing that for the co-sponsors it’s not an ideological debate, we are not against incentives for R&D and innovation while at the same time we acknowledge the importance of PUBLIC Health during a pandemic.”

He said that the “scope and duration bring in specificity to the proposal, as the scope focuses on the prevention, containment, and treatment of COVID-19 and includes the health products and technologies needed to deal with the pandemic, the specific duration considers uncertainties surrounding the pandemic while also brings out the temporary nature of the waiver. The proponents have no intention of continuing the waiver for indefinite period and no intention of denying benefits of IP rights to right holders beyond the waiver period.”

Ambassador Navnit warned against any “dilly dallying”, arguing that it would only “cause more harm especially when we are in a race against time.”

Aside from the co-sponsors of the TRIPS waiver, many members – Tanzania on behalf of the African Group, Chad on behalf of the LDC Group, Mongolia, Malaysia, Fiji, Egypt, Pakistan, Sri Lanka, Indonesia, Bangladesh, Bolivia, Venezuela, Paraguay, Maldives, Argentina, Nepal, Jordan, Vanuatu, Mozambique, Angola, Philippines, Jamaica, Peru and Viet Nam – rallied around the waiver proposal.

In their varying statements, the large number of developing countries struck a chord with the waiver proposal, said people who took part in the meeting.

CONTRASTING SIGNALS FROM DEVELOPED COUNTRIES

The United States, which has brought about a significant change when it agreed to support the waiver proposal and participate in the text-based discussions, said its top priority is “saving lives and ending the pandemic in the United States and around the world.”

The Biden-Harris administration is expected to announce at the G7 leaders’ meeting that it would donate 500 million Pfizer vaccines to countries in dire need for fighting the COVID-19 pandemic.

The US charge d’affaires Mr David Bisbee highlighted about the spate of measures adopted by the Biden-Harris administration “to get as many safe and effective vaccines to as many people as fast as possible.”

Arguing that this is a “global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” Mr Bisbee underscored the need for doing “what is necessary to accelerate manufacturing and equitable distribution of vaccines.”

He said that “while we are still reviewing the revised (waiver) proposal, our initial reaction is that it is a relatively modest change.”

He said “while we recognize it is not for the proponents to negotiate with themselves, it is a shared responsibility to find common ground and to respond to the issues raised by other Members, and time is of the essence.”

The US, according to Mr Bisbee, reckons that “the most expeditious pathway toward consensus would be to focus our efforts on what actions might be needed to address the supply and distribution of vaccines specifically.”

“For our efforts to have an immediate effect, a revised scope for discussion seems the most promising next step,” the US official said, adding that “the consensus-based nature of the WTO and the complexity of the issues involved mean that this will be a time-consuming process.”

He said the US support “for engaging in a text-based discussion will spur additional proposals or ideas to be put on the table.”

THE EU’S PROPOSAL

The European Union has introduced its controversial proposal to distract the global focus from the TRIPS waiver discussions, said a person, who asked not to be quoted.

At the meeting, the EU said “the TRIPS Council should concentrate on how the IP (intellectual property) system can contribute towards increasing the manufacturing capacity and the equitable access to vaccines around the world.”

After hoarding vaccines and promoting “vaccine nationalism”, the developed countries are now talking about “equitable access to vaccines around the world,” said a person, who asked not to be quoted.

After thanking the co-sponsors of the waiver proposal, the EU said that “the proposal waives obligations of Members to implement or apply Sections 1, 4, 5 and 7 of Part II of the TRIPS Agreement with regard to a wide range of health products, technologies, devices, personal protective equipment and components for the prevention, treatment or containment of COVID-19.”

The EU subtly pointed out its differences with the waiver proposal, saying that “all the relevant intellectual property rights (except for trademarks) that concern these products could be potentially waived as the result of this proposal with regard to a very broad range of products, technologies and components.”

It also drew differences with the co-sponsors “on the duration of the waiver” which is proposed in a manner that does not indicate the date on which the waiver would be terminated. It tried to show that “waiver could stay in force for an undefined period of time after the exceptional circumstances, which are presented as those justifying the waiver, cease to exist.”

Brussels assured members that it would engage “in a thorough discussion of this text to examine how the revised proposal addresses the identified bottlenecks for the production and distribution of COVID-19 vaccines, including its expected impact on the transfer of COVID-19 vaccines technology.”

The EU, which has embraced the WTO DG’s controversial “third way” approach, said “it is our assessment that limited manufacturing capacity, access to raw materials and other inputs are the main bottlenecks as regards the production and distribution of COVID-19 vaccines.”

“In addition, know-how is key due to the complexity of the production process of these vaccines,” the EU said, arguing that its latest proposal unveiled on 4 June on “Urgent trade policy responses to the COVID-19 crisis” is anchored on “a multilateral and comprehensive response by trade-related measures to the COVID-19 pandemic.”

Reverting back to the DG’s repeated calls for equitable distribution of vaccines, the EU said that it 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) concrete actions to expand production and ensure supply of vaccines at affordable prices to low and middle income countries during the pandemic; and (3) clarification and facilitation of TRIPS Agreement flexibilities relating to compulsory licences.”

The EU claimed that “voluntary licenses are the most effective instruments to facilitate the sharing of know-how. Intellectual property framework provides a platform that incentivises collaboration and transfer of know-how.”

The EU said that it wants “to include in this discussion a different and more targeted approach,” hoping that it will be able “to convince Members that our approach, including the key components that will be addressed in the General Council, represents the best way to respond to the crisis in a short term in an effective and pragmatic manner.”

The United Kingdom raised questions on the revised TRIPS waiver proposal, namely, “how a waiver proposal would actually help to scale and speed up the production and the distribution of vaccines and other products needed to fight the pandemic.”

Switzerland called for a “holistic approach” that would facilitate “trade and reducing barriers to trade, enhancing collaboration in order to scale up production, and making sure that the tools provided for under the multilateral framework, including the TRIPS Agreement, and its flexibilities can effectively be used.”

Like the EU, Switzerland too expressed concerns on “the newly proposed minimum three-year duration of the IP waiver proposal,” saying that “the termination of the waiver is made dependent on a decision of the General Council, implying that the waiver could remain in force indefinitely.”

Meanwhile, speaking at a webinar on 9 June, South Africa’s former trade minister Mr Rob Davies commended India and South Africa for piloting the waiver proposal.

However, based on the experience of how the Doha public health discussions took place during 2001 and 2003, Mr Davies cautioned that the co-sponsors have to ensure that there is no “delay” or “delete” tactics that will be adopted by the opponents during the discussion.