EXCLUSIVE: Efforts to limit the implementation of the TRIPS Waiver, proposals to exclude India & China
Newsletter Edition #123 [The Curated Primer]
Today we bring you an important update on the TRIPS Waiver - a developing story that we are closely tracking. It appears there is increasing momentum to arrive at a resolution of the waiver proposal at the WTO, by the end of this month. But will the outcome be close to what was initially proposed?
This has been a complex story to write given the sensitivity around these discussions. We spoke with multiple sources to better understand these crucial negotiations.
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(Owing to the importance of this story, we bring this to you in our curated edition today.)
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Also, if you missed it: guest editorial on the first term of WHO’s DG Tedros.
Until next week!
I. STORY OF THE WEEK
Efforts to limit the implementation of the TRIPS Waiver, proposals to exclude India & China
A small group of WTO members deliberating on the TRIPS Waiver, are discussing suggestions to limit the geographical scope of the implementation of the waiver - plans that seek to exclude India and China, sources familiar with the process say. These discussions among the US, the EU, South Africa and India, are still fluid and are likely subject to other diplomatic considerations outside of the waiver. India has been a lead co-sponsor of the TRIPS waiver proposal along with South Africa since October 2020.
While it appears that India will likely not accept such a proposal, and yet, it is not entirely clear whether such a limitation will be a clear red line for the proponents of the waiver. We did not receive responses from Indian authorities to our queries by the time this story went to print.
Observers also point to India’s pharmaceutical industry which has not favoured the waiver approach in order to address the supply challenges for COVID-19 medical products.
These on-going talks among these select members have been a part of the high level quadrilateral process led by the WTO DG. Such an exclusive process limited to four WTO members has reportedly been criticized by other WTO members including the UK and Switzerland, for the selective nature of engagement, Geneva-based trade sources told us. Some members have even called this process a “breach of trust”.
TRIPS WAIVER: WHAT HAS BEEN ON THE TABLE?
These high-level discussions led by WTO DG, Ngozi Okonjo-Iweala, have continued for the last two months following the indefinite postponement of the WTO ministerial at the penultimate moment late last year.
Sources tell us that discussions have mostly continued on the following matters: on the scope of intellectual property protection that can be waived; the scope of products that can be included in such a waiver; on the geographical scope in the implementation of the waiver and on the duration.
THE LIMITATION ON THE GEOGRAPHICAL SCOPE
It is understood that the US and the EU have, in their own ways favoured a limited application of such a waiver. Some suggestions include restricting the waiver only to African countries, or to exclude India and China among other possibilities.
The EU has announced a number of bilateral investments in Africa to boost vaccine manufacturing and regulatory capacity and often points to its role around mRNA hubs for example. See this also in the context of the upcoming EU-Africa summit. (Politico: Macron says EU and Africa seek vaccines deal at February summit)
Sources indicated that the proposal to exclude India and China from the geographical scope of the implementation of a potential waiver was suggested by the US.
Even though India has defended the waiver proposal, paradoxically, there is also a perception that India may be open to compromise, sources familiar with the discussions indicated. We did not receive any comment on this from Indian authorities. (We explore this further later in this story)
To be sure, in recent days, Indian trade minister Piyush Goyal has defended the trade policy space of developing countries:
The proponents of the waiver have resisted a limited implementation that would only include African countries, for example, sources told us. Efforts are being made to ensure that the wider WTO membership also stands to gain from the possibility of a global implementation of the waiver. The waiver proposal has the support of over 100 WTO members, including Latin American and Asian countries who are co-sponsors of the proposal.
It is understood that the US is keen on also excluding China from being able to implement the TRIPS Waiver. Remember that China is already the largest exporter of COVID-19 vaccines. (See Airfinity data on this.)
Also in the works, are discussions on potential opt-out mechanisms for members wishing to use escape clauses on certain aspects on the waiver. There are also suggestions to tie in conditionalities and load preferential terms on opt-in requirements. Details are scant. Experts fear that having a waiver with too many conditions would defeat its purpose.
It is learned that there has been no change in the US position on the waiver – the US continues to limit the discussion to waiving IP protection for vaccines, and not therapeutics and diagnostics.
While the EU is said to have shown more latitude, it continues to remain reluctant to waive obligations on patent protection, sources told us. Some western diplomats point to “successful” voluntary licensing initiatives by the Medicines Patent Pool on Merck’s Molnupiravir, to underline the futility of a waiver on patents.
A NARROW IMPLEMENTATION OF THE WAIVER:
AFRICA SECURE BUT THE REST?
If indeed the discussions result in a limited scope to include only African countries, according to some elements in the on-going discussion, it would be a diplomatic win for developed countries and for Africa.
South Africa has been driving these discussions on behalf of the co-sponsors, and has been perceived as willing to go the distance in order to negotiate an outcome with the EU.
As we have pointed out before, do also read this in the context of increased EU-Africa investments to build regulatory and manufacturing capacity in Africa, and ostensible alignment on new rules to govern health emergencies, including on a new legal instrument.
But observers say that a limited application restricting only to Africa will simply not be acceptable to the wider WTO membership that has fought long and hard alongside the lead proponents for a waiver.
THE INDIAN POSITION
Western diplomats suggest that India has not truly been in favour of the waiver proposal. (Even though India has led and co-sponsored the proposal for over two years.)
But this must be read keeping in mind legacy issues including the developed world’s general distrust of India produced medicines dating back several years. Seasoned trade experts also cautioned us about narratives against India that have been routinely deployed by developed countries.
During the last few months, India was also seen as having an “extreme” position on securing the original elements of the waiver proposal, without being open to a “compromise” as suggested by the EU.
Between these two diametrically opposing narratives, India’s position is somewhat unclear.
We tried to understand the dynamics operating within India that might have led to such perceptions gaining around.
A number of diplomatic sources have raised questions and concerns on India’s position that has, at a minimum, led to confusion, and worse, could lead to a potential loss of credibility for India in the global south, observers say. Some have questioned whether India is using gains from the waiver negotiations as a bargaining chip to trade for other objectives.
Experts familiar with New Delhi’s policy flip-flop over the last two years, believe that health issues have seldom been systematically incorporated into foreign policy considerations. The lack-lustre response from the Indian industry is also brought up.
In a conversation with us this week, Murali Neelakantan, Principal Lawyer, amicus, and former Global General Counsel, at Cipla, told us:
“To me, it seems that India has not engaged in serious and tenacious diplomacy to garner support for the TRIPS waiver. I suspect that the Indian government may now be using the gains from the TRIPS waiver as leverage elsewhere. This was a great opportunity for India to articulate a foreign policy vision or aspiration by demonstrating leadership on a global issue but it seems like this opportunity was missed.
As time passed, with the increase in domestic production for vaccines and medicines on the back of voluntary licenses from originator companies the waiver proposal seems to have become less significant for India’s national interest.
The waiver should have been framed as progress from Doha (2001) to achieve a paradigm for the future. India has not been to articulate any effective policy informing India’s support for the waiver proposal.
The waiver is not seen as an expression of India’s national interest. There has been no expression of support from the Indian pharma industry for the waiver. This suggests that the big Indian pharma players do not see a business opportunity in the waiver. The waiver may benefit the second rung of Indian pharma to build capacity but they don’t seem to have a voice in India’s policy. For a few years now, Indian pharma industry has been co-opted by big pharma and is happy winning licenses whether it is for Sofosbuvir, Tocilizumab, Remdesivir or Molnupiravir and opposition to the waiver seems to be consistent with that approach.”
(See also our expansive interview with Neelakantan from August 2021: Where does India truly stand on the TRIPS Waiver)
At this point, if India still has to make the most of the waiver proposal, it will have to achieve nothing short of a diplomatic feat of walking the tight rope, to ensure that it can have a big moral win for the sake of the developing world, a trade expert was of the view.
Also recall that India is part of the Quad partnership with Australia, India, Japan and the United States. Bilateral dynamics between India and the U.S. will also be in play here.
THE WTO MINISTERIAL & THE DYNAMICS IN GENEVA
Outside of these high-level discussions between select WTO members, a wider WTO response to the pandemic continues to take shape in Geneva. This month saw informal meetings of the General Council. The heat is on at WTO to forge a response to the pandemic of which IP will be a central element.
The process of finalizing the WTO response to the pandemic is now being dealt with by out-going General Council chair, Ambassador Dacio Castillo from Honduras. As the new facilitator for the trade and health response, he will work with the Walker text on the response to the pandemic. (New Zealand’s Ambassador David Walker is now no longer associated with the process since his term concluded.)
Sources suggested that the US has not been in favour of the Walker text, since it is reluctant to sign up for any potential legal obligations arising from a declaration on the pandemic response. The EU and others have cautioned against reopening the Walker text.
WTO’S CREDIBILITY AS A TOOL FOR NEGOTIATION
Clearly, there is pressure on the WTO to deliver. WTO continues to be perceived as a ‘rich country’ club. “Developed countries are keen on getting the WTO to deliver. It is in their interest to do so,” a southern trade negotiator told us.
Southern countries believe that WTO’s credibility rests on a deliverable on the TRIPS waiver. And that has become a negotiating tool now. Proponents of the waiver are counting on this in order to push through commitments on the waiver, and tying it into the wider trade and health response. “A commitment on the waiver will be a down payment for the rest of the trade and health package” a trade diplomat told us. (See our earlier reporting on the Walker process.)
The WTO DG has called for a conclusion on the discussions within the next few weeks. The next WTO General Council Meeting is scheduled for February 23. A number of changes are expected. The General Council is now expected to be chaired by Swiss Ambassador Didier Chambovey. And for the Chair of the TRIPS Council, the name of Ambassador Lansana Gberie of Sierra Leone has been proposed, according to Geneva-based trade officials.
While there continues to be no agreement on the date of the next ministerial, some suggestions include July 2022 or towards the later part of the year in Geneva. Diplomats are also hopeful that if delegates in Geneva conclude much of the pending negotiations, a ministerial may also be convened virtually.
THE OMICRON IMPETUS
When Omicron destabilised the world in December 2021, waiver proponents believed that it potentially presented them with a “window of opportunity” and an urgency to push through the waiver proposal. However, in the past two months, WTO members have failed to arrive at a decision on the waiver.
One Geneva trade official told us, it was when EU diplomats were unable to travel to the WTO for the ministerial, the decision was taken to call it off. (Recall that Southern trade negotiators whose countries were slapped by travel bans were also unable to travel).
The efforts to scuttle the scope of a potential waiver have to be seen in the light of the far-reaching effects of Omicron, now also registering increasing deaths in many parts of the world.
Does this mean that the urgency brought on by Omicron has been lost? After all, these delaying tactics have had their impact. There are projections now of surplus vaccines’ production in 2022.
The waiver proponents are still hopeful.
With the US witnessing high numbers of deaths, there is pressure not only for vaccines, but also for diagnostics and therapeutics. “The goal would be to catch Washington now”, a trade source said alluding to the nearly 9,00,000 lives lost in the U.S.
While it is impossible to estimate the true cost of policy inaction, there may be growing recognition of this inaction.
Both sides are cautious about any long term consequences brought on by a waiver: for the opponents, the waiver risks hollowing out the TRIPS agreement. And for the proponents, the waiver is a lever to widen the access to medicines not only during health emergencies, but a first step in rectifying structural barriers that have contributed to the current inequities. This tug of war explains the intractability of these negotiations.
Even as compulsory licensing has become the new buzzword in Brussels during this pandemic, see this submission to the USTR, by industry lobby group Pharmaceutical Research and Manufacturers of America:
KEI’s James Love:
Also from MSF’s Dimitri Eynikel:
II. POLICY UPDATES
INB at WHO
The Bureau of the Intergovernmental Negotiating Body to work on a new legal instrument to govern health emergencies: The following countries are reported to be a part of the bureau - Brazil, Egypt, Japan, Netherlands, South Africa, and Thailand. (Japan, Brazil and Egypt are not a part of the Friends of the Treaty.)
III. WHAT WE FOUND INTERESTING
My colleague Rithika has put this together for you:
IMF analysis reveals staggeringly unequal delivery of vaccines by COVAX: Development Today
Cash shortages mean Covax cannot accept new doses, says executive: Financial Times
Should We Go All In on Omicron Vaccines?: The Atlantic
‘Pandemic vs endemic’ sets up two conflicting Covid endgames: Financial Times
Countries weigh how to buy vaccines for the next pandemic: Financial Times
The new WHO special envoy on covid: Yodi walks into the lion’s den: Development Today
Ahead of Winter Olympics, Beijing Moves to Quash Dissent: The New York Times
Living by the Code: In China, Covid-Era Controls May Outlast the Virus: The New York Times
U.N. Chief Rebuffs U.S. Request to Skip Beijing Olympics: Foreign Policy
The Battle for the World’s Most Powerful Cyberweapon: The New York Times Magazine
In trying to tackle fake news, Facebook is cracking down on real science: The New Statesman
Angela Merkel turns down UN job offer: Politico
COVID-19 After Two Years: The Failure of Pandemic Governance: Council on Foreign Relations
Five Urgent Needs for Global Governance: UN Secretary-General Sets Priorities for 2022: SDG Knowledge Hub by The International Institute for Sustainable Development (IISD):