"Power" Trips the Waiver at the WTO, no consensus yet hours before the close of MC12

Newsletter Edition #145 [Geneva Health Files News Flash]

Jun 16

Hi,

There is a beautiful Urdu word called “Mahaul” that can be loosely translated as ambiance or atmosphere. So the “mahaul” at WTO this week, did not feel like this would be a make or break ministerial conference. (At least, not yet.) For global health watchers, there has been a sense of resignation, brooding and maybe even quiet wisdom on what could be coming. Read on.

In today’s edition, we bring you the story on the much debated TRIPS waiver at the WTO’s 12 Ministerial Conference. No consensus had been reached on the waiver decision by the time this story was published. We will follow up with an update soon.

It has been a fascinating, if somewhat underwhelming to report on MC12, partly because it was more subdued than expected, and also because ministers and diplomats were, to an extent, fire-walled from the media. Interactions were harder. A nervous WTO secretariat and non-negotiable Swiss police, meant that there were fewer feisty activists on site.

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Until later!

Priti

Feel free to write to us: patnaik.reporting@gmail.com or genevahealthfiles@protonmail.com; Follow us on Twitter: @filesgeneva

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WTO MINISTERIAL CONFERENCE: JUNE 2022

"Power" Trips the Waiver at the WTO

No consensus yet hours before the close of MC12

The journey of the TRIPS Waiver proposal through the labyrinthine maze of trade politics at the WTO illustrates the larger story of the shrinking leverage of developing countries in multilateral institutions.

The current TRIPS Waiver proposal, the linchpin of WTO deliverables at its 12th Ministerial Conference, underway in Geneva, has become the problem child that no one is happy with – barring, perhaps, the European Union – given that the text mostly resembles its original proposal. On failing to reach consensus on a number of different deliverables, before the original date of June 15, the WTO decided to extend the conference by a day with the assumption that an agreement could be reached on some of the key objectives in fisheries, agriculture, or the WTO response to the pandemic, including on the TRIPS waiver.

When this story went to print, there were on-going negotiations on a potential TRIPS waiver outcome, and other deliverables. Trade sources also indicated attempts to craft an emerging package that would comprise an agreement negotiated horizontally across disciplines.

After an envious build-up of support that saw 100-countries supporting the original TRIPS Waiver proposal, there is reluctant appetite now to adopt a mostly unworkable text that no one is expected to use. Save the political significance of the current waiver proposal and the associated political declaration, there is no real excitement among the supporters. The declaration, the WTO’s response to the pandemic, some say, is no response at all, coming in two and half years after COVID-19 hit the world and even as there is another health emergency already brewing on the margins.

Saddled with a text of a potential waiver solution that they do not want, developing countries are under pressure from several quarters to reject the text. If adopted, it is increasingly clear that a weak waiver text could become a reality. This will make some stakeholders happy including developed countries that have fought hard to allegedly preserve incentives for innovation and the pharmaceutical industry that has been keen to safeguard the protection that the status quo provides.

This story unpacks the discussions at the WTO Ministerial on the TRIPS waiver and the wider pandemic response, at the cusp of a potential agreement before the close of the conference on June 16. The possibility of countries walking back with no deal in hand has not been ruled out when this story went to print.

THE MINISTERIAL CONFERENCE – A GROUND VIEW

The Ministerial Conference that began on 12 June in Geneva, saw hundreds of delegates comprising ministers, diplomats, trade experts convene at the WTO to buckle down on tough negotiations to deliver on trade objectives on the back of a debilitating pandemic resulting in economic pressures having socio-political implications the world over.

In her opening speech at the conference, DG Ngozi Okonjo-Iweala, warned that the road to deliver MC12 will not be smooth. “Expect a rocky, bumpy road with a few landmines along the way. But we shall overcome them,” she had said. Now with hours left before the close of the Ministerial, it is not clear whether the DG expected the kind of pushback from developing countries as has been witnessed this week.

Some countries continued to raise concerns on process particularly on the use of green rooms - the hallmark of WTO ministerial tactics. These are smaller group negotiations convened to forge quicker decisions, but allegedly at the expense of excluding developing countries. Earlier in the week, trade officials referred to TRIPS waiver, and other discussions as having “gone underground, in proverbial smoke-filled rooms”.

DELIVERABLES FOR GLOBAL HEALTH AT MC12

Jerome Walcott, Minister of Foreign Affairs and Foreign Trade of Barbados was named as the facilitator of the discussions on the WTO’s response to the pandemic and on the TRIPS Waiver. The past few days at the Ministerial saw several “green room” meetings making negotiations on these issues tougher, diplomatic sources and other experts closely tracking these discussions said.

At a thematic session discussing the WTO response to the pandemic and the TRIPS waiver, nearly 70 interventions were made by members. The political declaration on the response to the pandemic appeared to have a fair amount of support from members, Daniel Pruzin, spokesperson of the WTO indicated during a press briefing.

But unresolved differences on the current TRIPS waiver text remained as countries continued to negotiate on key elements. Sources told us that the political declaration had a placeholder for the TRIPS waiver. And it was foreseen that these two different tracks will have to be adopted together.

As days passed, it was obvious, that the TRIPS waiver will not be a stand alone deliverable for many members including for some developing countries. At a press briefing on June 15, Federal Councillor Guy Parmelin, indicated that an eventual agreement could emerge as a result of negotiations across disciplines.

THE CURRENT TEXT OF THE TRIPS WAIVER

ELIGIBILITY

Members continued to disagree on several key elements of the TRIPS waiver decision text that has been considered by ministers and their delegations over the last few days. Worryingly, the question on eligibility had not been resolved between the US and China (Part of Footnote 1 in the text reads: “[For the purpose of this Decision, developing country Members who exported more than 10 percent of world exports of COVID-19 vaccine doses in 2021 are not eligible Members.”) It was not clear whether bilateral consultations were held between these members to address the question. Queries sent to American and Chinese authorities were not answered.

Ministerial watchers say that this question alone could sink the waiver if either side do not change their position. But efforts were made to draft language to seek a compromise, sources said this morning.

THE SCOPE OF APPLICATION

Countries also disagreed on what should be included as the subject matter of a patent. While developed countries such as the UK have allegedly pushed for exhaustive language, developing countries have tried to keep the definition of subject matter as non-exhaustive.

The draft decision text – June 10 – reads thus:

“For the purpose of this Decision, it is understood that 'subject matter of a patent' [includes][means all finished COVID-19 vaccine products,]ingredients and processes [necessary] for the manufacture of the COVID- 19 vaccine.
Alternative wording [For the purpose of this Decision, it is understood that 'subject matter of a patent' refers to [finished] COVID-19 vaccine products, and [ingredients][products] and processes necessary for the manufacture of the COVID-19 vaccine.]”

THERAPEUTICS AND DIAGNOSTICS

For developing countries, one of the few remaining elements in an otherwise weak text is the promise of including therapeutics and diagnostics to the scope of any potential waiver.

(The paragraph reads: “No later than six months from the date of this Decision, Members will decide whether to extend this decision to cover the production and supply of COVID-19 diagnostics and therapeutics.”)

But countries have struggled with committing to discuss the scope of the waiver to include therapeutics and diagnostics. In a statement during the Ministerial, Indian minister Piyush Goyal made clear: “It is of paramount importance for us to commence negotiations on therapeutics and diagnostics. We cannot have a pandemic response which does not deliver an effective and workable document on TRIPS, nor can we agree to any pre-shipment notification requirements.”

Swiss authorities indicated that the current text was a framework that limited the discussion to vaccines. A representative from the pharma industry told us on the sidelines of the conference, that the current text would be problematic for therapeutics.

One expert told us that the economics of therapeutics will be quite different from that of vaccines. And therefore, a similar framework of the current waiver text may not work for treatments.

Interestingly, access to medicines advocates also believe that the current text would prove to be too restrictive for therapeutics.

It is not clear whether this would be a red line for the sponsors of the TRIPS waiver proposal. Many fear that, in effect, this may never be discussed at the WTO.

In a scathing follow on statement made at a meeting of co-sponsors of the TRIPS Waiver, published late one evening this week, Minister Goyal of India is reported to have told co-sponsors, “So, my own sense is that what we are getting is completely half baked and it will not allow us to make any vaccines, they have no intentions of allowing therapeutic and diagnostics and if at all they try to say that we are the cause for its collapse, I think we should unanimously speak to the world and tell them that no we ideally we want a holistic solution including therapeutic and diagnostics.”

DURATION

Hours before the close of the conference, the question on the duration of any potential waiver also remained unresolved. (Pre-dawn consultations on June 16, indicated that an agreement on this issue may be reached, sources familiar with the discussions said. No details are known yet)

The UK had allegedly sought to link the termination of a compulsory license with the end of the period of the implementation of the waiver.

Geneva trade officials also pointed to suggestions to link the duration of the waiver to the inclusion of the therapeutics and diagnostics.

The draft text had read: “An eligible Member may apply the provisions of this Decision [so that authorized uses continue no later than][until] [3][5][10] years from the date of this Decision. The General Council may extend such a period taking into consideration the exceptional circumstances of the COVID-19 pandemic. The General Council will review annually the operation of this Decision.”

ON NOTIFICATIONS AND ENFORCEMENT

The language on notifications and anti-diversion in the current text has also worried activists.

“The current text makes the enforcement right more of a public responsibility, rather than a private right,” James Love of Knowledge Ecology International told us on the sidelines of the conference. Love has worked extensively on these issues.

The relevant provisions of the draft text, on these matters, said:

3 (b) An eligible Member may waive the requirement of Article 31(f) that authorized use under Article 31 be predominantly to supply its domestic market and may allow any proportion of the products manufactured under the authorization in accordance with this Decision to be exported to eligible Members, including through international or regional joint initiatives that aim to ensure the equitable access of eligible Members to the COVID-19 vaccine covered by the authorization.
(c) Eligible Members shall undertake all reasonable efforts to prevent the re-exportation of the products manufactured under the authorization in accordance with this Decision that have been imported into their territories under this Decision. Members shall ensure the availability of effective legal means to prevent the importation into, and sale in, their territories of products manufactured under the authorization in accordance with this Decision, and diverted to their markets inconsistently with its provisions, using the means already required to be available under the TRIPS Agreement.
(Associated footnote: In exceptional circumstances, an eligible Member may re-export COVID-19 vaccines to another eligible Member for humanitarian and not-for-profit purposes, as long as the eligible Member communicates in accordance with paragraph 5.)

As we reported earlier these provisions entail only waiver in the current text - of Article 31 (f)

In an update, Love shared on Thursday morning, he said:

“The three core elements of 31bis are notifications to the WTO, anti-diversion measures and eligibility. 31bis applies to drugs, vaccines and some diagnostic tests. It is permanent. It applies to all diseases.

The new text had marginally less problematic notifications, different anti-diversion requirements, more trade restrictions on eligibility for both imports and exports. It is temporary, Only applies to vaccines and it only applies to one virus – COVID 19.”

THE WTO RESPONSE TO THE PANDEMIC

Several countries appeared favorable to adopt draft Ministerial Declaration On The WTO Response To The Covid-19 Pandemic And Preparedness For Future Pandemics, given that it will set a precedent and will become a reference for the future on these issues, in addition to having certain elements that can be binding in nature.

Experts say that “the Declaration can have an effect on existing rights, obligations and flexibilities, particularly when applied as a subsequent agreement or subsequent practice.” WTO ministerial declarations could operate as subsequent agreements, they said citing opinions of the WTO Appellate Body.

However, activists also told us, that the declaration was not strong enough to bring any real change to how trade policies could be adapted at the time of health emergencies.

One senior diplomatic source referred us to paragraph 23 of the declaration, as significant for the future:

“We underscore the importance of understanding how WTO rules have supported Members during the COVID-19 pandemic, and their role in future pandemics. We affirm the need to review and build on all the lessons learned and the challenges experienced during the COVID-19 pandemic, to build effective solutions in case of future pandemics including on balance of payments, development, export restrictions, food security, intellectual property, regulatory cooperation, services, tariff classification, technology transfer, trade facilitation, and transparency, in an expeditious manner.”

In a brief sent prior to the ministerial, on the declaration India had said, “Certain developed countries (EU, US, UK, Canada) are seeking to include elements pertaining to limiting the scope for export restrictions, seeking permanent disciplines with respect to trade facilitation measures, increased market access and limiting the scope for TRIPS waiver. On other hand, developing nations [South Africa, ACP group, Sri Lanka, Egypt, Tunisia, Uganda, Jamaica] want the WTO response to address issues with respect to the supply side constraints, increased access for services, such as, healthcare and related services namely ICT etc, flexibilities with respect to export control measures, food security measures and limiting the scope for any additional disciplines.”

“The declaration includes terminology that differentiates between developing countries, by using a qualifying term ‘some’ before ‘developing countries’ in multiple paragraphs of the declaration. This will potentially feed into the attempts to normalize differentiation among developing countries and their access to special and differential treatment. It sets a political precedent which is likely to make it more difficult to resist ongoing attempts to differentiate amongst developing countries,” a note from Third World Network said.

It was also reported that the UK and Switzerland sought to dilute the language on intellectual property in the declaration. But sources told us, that the declaration and the waiver decision were linked. It is not clear how the declaration can be adopted if there is no corresponding agreement on the waiver.

THE LINK BETWEEN THE WAIVER AND THE DECLARATION

In the thematic session on these issues, Minister Goyal of India said:

“India has made several compromises along the way to make this possible, like the TRIPS automaticity clause, which was not accepted, extensive dilution of the language on IP and tech transfer; a muted ambition on food security and economic resilience, compromises on a strong forward-looking agenda on these issues, resolution of the issue of developing countries and LDCs, acceptance of issues and language we have not been comfortable with in areas of transparency, export restriction, market openness and developing countries etc.
Therefore, disturbing this delicately poised document even slightly would unravel the months-long complex negotiations and will run the risk of failing an outcome we are close to achieving.
This document, however, has an inextricable link with the satisfactory resolution of the TRIPS document. One cannot go through without the other and they both should be finalized together. It is of paramount importance for us to commence negotiations on therapeutics and diagnostics. We cannot have a pandemic response which does not deliver an effective and workable document on TRIPS, nor can we agree to any pre-shipment notification requirements.”

THE FATE OF THE WAIVER HANGS IN BALANCE

Although the WTO is a member-driven multilateral organization, ultimately the deliverables at the Ministerial depend on a few key members, such as China and the US for the waiver, the UK and Switzerland, also on the waiver, and India on the decision on public stockholding for food security, or fisheries.

Diplomatic sources indicated that many of the negotiations could also be the result of proxy wars between bigger members.

There is a clear anti-India narrative prevailing at the WTO, not unsurprising given India’s positions in previous ministerial. However, diplomats also suggested that this was a convenient narrative to blame southern countries such as India.

It is also becoming evident, that while important, the waiver is not the priority for India, as much as its proposals for food security and fisheries. In a brief, ahead of the ministerial, India indicated, “The department of commerce has organized a few consultation meetings with the Ministries concerned and the industry stakeholders on this subject. The Indian pharmaceutical industry has acknowledged it though the draft text that emerged does not reflect India’s envisaged outcome; still, it is a significant step to pressure the International pharma community to provide voluntary licenses for COVID Vaccines.”

But another developing country diplomat told us that “vaccines will not be a sacrificial lamb for public stockholding for food security”, indicating that for some countries an outcome on the waiver is key.

THE ROLE OF THE DG

Depending on who one speaks to, the role of the DG in the run up and during the ministerial, has evoked strong reactions. While some have called her charismatic and determined, others have found her over-bearing in her zeal for the WTO to deliver outcomes.

Multiple sources told us that WTO DG Okonjo-Iweala has put a lot of pressure on developing countries to hasten negotiations towards conclusion. “This is about the image of the DG, rather than whether the current waiver text is suitable for countries,” one diplomatic source said. Some believe that African countries would have participated better, without the determined role that the DG has played.

“This is a member-driven organization, she should leave this to the countries”, the source added.

At the end of tense negotiations and discussions on the TRIPS waiver, among other issues, many WTO members may not be in any mood to give greater powers to fewer countries.

THE POST-WAIVER WTO

As we reported before, some believe that the delay is the defeat of the TRIPS Waiver discussions at the WTO.

There is pressure building on countries to walk away from the text. After pushing for a full TRIPS waiver for 20 months, hundreds of activists all of the world, say that they have recognized the futility of the current text. More than 150 CSOs called on countries to not accept current draft of Ministerial Decision on TRIPS.

But irrespective of the outcome on the TRIPS waiver, the discussions on the access to medicines have turned a corner at the WTO.

Felipe de Carvalho, Advocacy Advisor for Brazil, MSF Access Campaign, pointed out that irrespective of the outcome, the discussions on the waiver had generated a global debate on the issue of access and inequity, it showed the extent of the barriers posed by intellectual property. “For the first time we have discussed the barriers imposed by trade secrets, for example”, he said at a briefing by CSOs. The discussions opened the way towards a transformative agenda in health, he said.

Compulsory licensing was expanded in Brazil, we had new laws for local production, we had new rules to pierce trade secrets using CLs, he added emphasizing the impact of the discussions in Geneva, in some countries.

Not everyone shares this view. Ellen ’t Hoen, director Medicines Law & Policy, and a former head of the Medicines Patent Pool, said on the sidelines of the conference, "The waiver text as currently being considered risks doing a disservice, not only to the public the WTO is meant to serve, but also to the WTO itself. WTO IP rules offer a broad range of flexibilities without restrictions on type of diseases, products or countries that may apply them and those flexibilities risks being eroded by a restrictive waiver. For the WTO to be relevant in public health it needs to be much more ambitious. This is also why we support the proposal for a public goods agreement”.

Experts recall another lost opportunity in the access to medicines journey two decades earlier and find echoes in the current situation.
Carlos Correa, the executive director of the South Centre, told us this week, “There is, in effect, a parallel. Like in the case of the waiver negotiated pursuant to the Doha Declaration on the TRIPS Agreement and Public Health, while implicitly admitting that patents can be a barrier to expand the supply and access to vaccines, developed countries delayed the needed action in response to the request by India and South Africa. They also drastically narrowed down the scope of the waiver and sought to impose conditions (e.g. notifications, restriction on re-exportation) that substantially limit its possible effectiveness. The story has been repeated after 20 years showing that solidarity and cooperation continue to be proclaimed by those countries but not practiced.”

There is already introspection among developing countries and supporters of the waiver. The story of how an expansive proposal seeking to waive several provisions across the TRIPS Agreement, got whittled down to essentially the waiver of a single provision.

The negotiations have been very tough, several developing country negotiators told us. Speaking at an event in Geneva, alongside the Ministerial, Baone Twala, Legal Researcher, Section27, in South Africa said, “The immovable met with the unstoppable,” alluding to developed countries as an immovable force despite the demand for a full waiver form more than 100 countries. The southern negotiators were unstoppable, but there have been limits to how much they could push for, she added.

THE VIEW FROM THE OUTSIDE: MC12

The pressure on the WTO to deliver especially in the face of the pandemic continues. An open Letter was sent from the Special Rapporteur on contemporary forms of racism, racial discrimination, xenophobia and related intolerance to the WTO.

It said:

“Systemic racial discrimination is embedded into transnational legal, economic and political structures, including the international intellectual property regime. These systems uphold racial inequality by constraining the possible solutions for challenging such inequality. In the context of the COVID-19 pandemic, this has meant that the burdens of the pandemic have been borne disproportionately by certain States, peoples and territories most harmed by colonialism and racism, while the mechanisms for reducing these burdens are controlled almost entirely by States, peoples and territories which were the beneficiaries of colonialism.”

But far from examining the politics underneath trade law, some believe that the WTO has come to assume a “negative neutrality” that has been unable to ensure a level-playing field for all countries.

In her opening speech, DG Okonjo-Iweala said:

“….A trust deficit dating back to the breakdown of the Doha Round and even before took its toll. The media coverage reflected this and was brutal, with uniformly negative headlines about a failing WTO and failing ministers.
Permit me to be blunt and say that Geneva has internalized many of these negative messages.
The negativism is compounded by the negative advocacy of some think tanks and civil society groups here in Geneva and elsewhere who believe the WTO is not working for people. This is of course not true, although we have not been able to clearly demonstrate it, but it worsens the trust deficit that I have noticed in these past 15 months. Despite this, ambassadors have been working very hard, trying to overcome, to work hard together, and work to deliver. I want to say a heartfelt thank you to all the ambassadors in Geneva. I hope as ministers you can work even better together to complete nearly completed deliverables so this organization can be put back on a results-focused trajectory. I would like you to spend just a little bit of the political capital you have stored for your bilaterals and regional deals, to support multilateral deals at the WTO.”

Many critics of the WTO, including scholars and the civil society disagreed with the DG’s assessment.

Negotiations continued till pre-dawn, the night before the last day of the ministerial. No agreement was announced with less than few hours before the close of the conference.

By the time this story went to print, it was not clear whether the waiver decision would be adopted.

Winnie Byanyima, UN Undersecretary-General, UNAIDS executive director, and Co-Chair of the People's Vaccine Alliance, urged developing countries to “persist, persist, persist”. Unity is our only strength, she said this week.

Also see:

See here statements made at the ministerial.

The WTO faces a make or break week over vaccines: The Guardian

Big Tobacco Is Funding Opposition to Global Covid Vaccine Access

Geneva Health Files