WTO DG Serves Up New Proposed Text on the TRIPS Waiver to a Divided House, Tense Negotiations Expected
Newsletter Edition #135 [The Friday Deep Dives]
The TRIPS Waiver discussions are proving to be a cross of Albatross, that could unsteady the WTO, an institution that Ngozi Okonjo-Iweala is trying to steer in the very troubled waters of these times.
This month WTO members are taking back control on the TRIPS waiver discussions, that have been, for the past 6 months or so, been debated mostly among key members, brokered by top WTO officials.
Our edition this week takes a look at recent developments that explain the pressure and politics at the WTO. (This story will be updated subsequently, following today’s formal meeting of the TRIPS council where WTO members are considering a new text.)
No matter the outcome on the TRIPS waiver discussions it is important to have a record on the circuitous paths these consultations have taken over the last 18 months.
In the course of reporting on these highly political and divisive discussions we are struck by how facts and events can be conflated to color narratives.
The TRIPS Waiver is being seen as the key that could revitalize the WTO. It is a lightening rod for the pharma industry, even as it has electrified the medicines movement.
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STORY OF THE WEEK
WTO DG Serves Up Proposed New Text on the TRIPS Waiver to a Divided House, Tense Negotiations Expected
This week WTO members were given access to a letter that was described as an outcome document based on the discussions between select members. This letter was sent by the Director General Ngozi Okonjo-Iweala to the Chair of the Council for Trade-Related Aspects of Intellectual Property Rights, Ambassador Lansana Gberie of Sierra Leone, describing the progress of the informal discussions on the TRIPS Waiver proposal. The letter also shared a proposed text by the DG on the waiver discussions.
Although the document does not specifically mention the quadrilateral group (comprising the US, the EU, India and South Africa) it is understood that this text that was shared with the wider membership, is based on the discussions between these key members.
In her letter to the TRIPS Council Chair, the new text is presented to the WTO membership under the DG’s ownership.
DG Okonjo-Iweala says in the letter, “What was evident was the need for additional impetus to the TRIPS waiver discussions given the impasse in the TRIPS Council. I therefore informed Members that I would be reaching out to various Ministers for needed input. In this regard, working with DDG Gonzalez, we have tried to support an informal group of Ministers to come together around what could be a meaningful proposal, without prejudice to their respective positions, that could provide a platform to be built upon by the membership.”
The letter further says, “I assured Members that whatever outcome emerged from this informal process would be put forward transparently to the full Membership for discussion in the TRIPS Council”.
Why is this important?
Sources say that this so-called outcome text has struggled to get endorsement and ownership from the US, India and South Africa. The EU has supported the text. In the meantime, even as these three countries have not completed internal consultations on the text, as has been suggested, pressure continued to build on the DG to make the text public, albeit without the endorsement of all the members of the Quad.
Today, 6 May, WTO members discussed this text at a formal meeting of the TRIPS Council. A General Council meeting of the WTO is scheduled next week on 9-10 May.
THE CONTENTS OF THE “OUTCOME DOCUMENT”
The “new” proposal in the DG’s letter is similar to the leaked text (March 2022) on the discussions between the four key members. Similar to the EU’s proposal, this text essentially clarifies and waives certain provisions regarding the issuance of compulsory licenses with respect to patents over vaccines. We reported earlier that this leaked text has been panned by critics and civil society organizations who believe that such a proposal could set a negative precedent for the access to medicines.
There are two changes in square brackets (suggesting lack of agreement), compared to the leaked text: one addresses the definition of eligible countries; the second, on the requirement to list each patent in non-voluntary authorization, Knowledge Ecology International said in an update when this document first became public this week.
ON THE ELIGIBILITY OF COUNTRIES
A policy brief by South Centre has systematically analysed the proposal by the DG. “Footnote 1 of the draft has two parts in separate square brackets. The first part makes all developing country Members eligible but encourages such Members that have capacity to export vaccines to opt out of the decision. The other formulation in the third sentence of footnote 1, in square brackets, excludes developing countries that have exported more than 10 percent of COVID-19 vaccine doses in 2021,” the analysis by South Centre says. This, experts say, is to exclude China based on vaccine production numbers.
It is understood that China has expressed reservations on such a potential outcome. Experts believe that such an exclusion might affect China even outside of these negotiations. This might also have implications for other developing countries.
Sources familiar with the discussions suggest that efforts could be made to persuade other developing countries to forfeit the use of such flexibilities intended through a waiver proposal. “There could be quid pros quos offered by powerful members in exchange for not taking advantage for potential waiver provisions,” a diplomatic source told us.
In a separate commentary, Third World Network (TWN) said, “It is sheer common sense that during a public health emergency, there can be no place for criteria that deliberately excludes countries with production capacity from using the system to support other countries. From this perspective, the inclusion of a criterion that arbitrarily excludes any developing country WTO Member that exports more than 10 percent of world exports of COVID-19 vaccine doses in 2021, and all developed countries from using the proposed system not only as importing countries but also exporting countries is reprehensible. Clearly, petty politics are in play.”
“Such a criterion is a major step backwards for addressing global public health concerns and a significant departure from the Doha Declaration on TRIPS and Public Health adopted at the height of the HIV/AIDS crisis that is applicable to all WTO Members. Even Article 31bis of TRIPS is applicable to all WTO Members, with countries having the option to self-opt out from using the mechanism for purposes of importing products. There is no exclusion of any country for purposes of exporting products,” Sangeeta Shashikant, a legal expert at TWN said in her piece.
ON THE LISTING REQUIREMENTS OF PATENTS IN NON-VOLUNTARY AUTHORIZATION
The new text has the following square bracket suggesting a lack of consensus between the four members on this provision:
“3. Members agree on the following clarifications and waivers for eligible Members to authorize the use of patented subject matter in accordance with paragraphs 1 and 2:
(a) [With respect to Article 31(a), an eligible Member may issue a single authorization to use the subject matter of multiple patents necessary for the production or supply of a COVID-19 vaccine. The authorization shall list all patents covered. In the determination of the relevant patents, an eligible Member may be assisted by WIPO's patent landscaping work, including on underlying technologies on COVID-19 vaccines, and by other relevant sources. An eligible Member may update the authorization to include other patents.]
Experts had already criticised this language for making it onerous to list all patents to produce vaccines. Authors of the South Center paper further say, “Interestingly, compulsory licenses have been granted in the USA in the past without the required listing, in relation to present and future patents.”
(See: Third World Network, WTO DG’s proposed solution unsuitable for global public health crisis)
THE PUSH FOR THE INCLUSION OF THERAPEUTICS AND DIAGNOSTICS
On the inclusion of therapeutics and diagnostics in the scope of a potential waiver, the current text says, “No later than six months from the date of this Decision, Members will decide on its extension to cover the production and distribution of COVID-19 diagnostics and therapeutics.”
Sources indicated to us that developing countries will push for an inclusion of therapeutics and diagnostics in the current negotiations. “It does not make sense to put off a decision on the applicability of the waiver to other products later in the year,” a diplomatic source from a developing country told us.
It is also understood that given the delay in the decision on the waiver, the goalposts have now shifted. The evolving epidemiology of the disease suggests that COVID-19 will become endemic in many parts of the world. “While vaccines have been incredibly helpful, the world now needs access to therapeutics. Vaccination continues to be very low in Africa, and diagnostic capacities across the developing world are inadequate,” a developing country diplomat said underscoring the need to expand the product scope in any outcome on a potential waiver.
In his recent remarks, WHO DG Tedros Adhanom Ghebreyesus said, “We cannot accept prices that make life-saving treatments available to the rich and out of reach for the poor. This is a moral failing.”
IS IT A BIRD OR A PLANE? (“Outcome” Vs “Agreement”)
Apart from the substantive elements of the proposed text, that critics say has little in common with the original waiver proposal by India and South Africa, the process guiding the introduction of this new text also raises questions.
Earlier this week, there was confusion on whether the Quad group had indeed endorsed and agreed on the text.
Sources familiar with the process indicated that the DG has been under pressure to introduce the text to the wider membership. It is understood that the US was keen that an official text be brought to the membership in order to begin formal consultations on the text. Other members at the WTO, have also been hesitant to make public statements on their positions on the text, because till today’s (May 6) formal meeting of the TRIPS Council, there was no opportunity to discuss the new text.
It was only after the new proposed text was shared following the informal meeting on May 3, that members officially had access to the text. To be sure, ever since the text was leaked in mid-March 2022, members have discussed it informally, in small groups.
Efforts to suggest that an alleged agreement between the Quad has been reached, could indicate the pressure to reach a consensus on these highly sensitive and political discussions. In less than 6 weeks, trade ministers will gather for a ministerial conference, after nearly five years.
By the evening of May 3, the WTO published an update on the outcome document, that said, “After an impasse of more than one year in the TRIPS Council, DG Okonjo-Iweala, working with Deputy Director-General Anabel González, supported an informal group of ministers to come together around what could be a meaningful proposal, without prejudice to their respective positions, that could provide a platform to be built upon by the membership.”
This suggests that negotiations will begin on this new proposed text as the basis. This also does not rule out any other proposals, or efforts by other WTO members to improve upon the text. Similarly, opponents to the TRIPS waiver, will express their positions on this approach to address the pandemic.
In an update, TWN said:
“Elements of the proposed outcome read out by the TRIPS Chair during the recent informal meeting, as prepared by the Secretariat, also mis-characterized the content of the proposed outcome, for instance, by suggesting that the proposal to “limit” Article 28.1 provides additional flexibility and that a patent waiver for vaccines is being offered. This representation is very far from the truth and reality. Experts and civil society groups globally have raised serious concerns over the contents of the WTO DG-led proposal.
There is consensus that the proposed outcome does not waive “patents” on vaccines. Instead, it introduces further conditions and uncertainties with respect to use of non-voluntary licenses of patents (also commonly referred to as “compulsory licenses”), and contains harmful negative precedents on how to address global public health emergencies.”
In addition, TWN pointed out:
“Nowhere is there any mention of any Quad Member or their agreement on any aspect of the proposal. In addition, reference to “whatever outcome” would suggest to include outcomes that have not been agreed to.
However, this did not prevent from the WTO Secretariat from issuing a public statement that misleadingly referred to the DG proposal communicated to the TRIPS Council as “Quad’s outcome document”.
PRESSURE CONTINUES ON MEMBERS TO REJECT TEXT
This week MSF asked governments to reject the text. “This draft text being discussed at the WTO is simply not the effective intellectual property Waiver that more than 100 governments were asking for, and governments should reject it,” said Yuanqiong Hu, Senior Legal and Policy Advisor for MSF's Access Campaign.
On the provision in the current new text to delay extending any waiver applicable to therapeutics and diagnostics, Felipe de Carvalho, MSF Access Campaign Coordinator in Latin America said:
“It is particularly disheartening to even consider delaying a decision on treatments and diagnostics by an additional six months, especially when access to COVID-19 treatments remains a significant problem for people in many low- and middle-income countries, and particularly in Latin America,” said Felipe de Carvalho, MSF Access Campaign Coordinator in Latin America. “The impact of the pandemic on people in countries in Latin America, including Brazil, Bolivia, Colombia and Peru, was devastating, and access to affordable generic medicines would be crucial if another COVID-19 wave were to hit this region.”
More than 40 civil society organisations sent an open letter calling on the European Union to refrain from rushing WTO members to rapidly adopt the draft text.
Today WTO members considered the new text at the TRIPS Council formal meeting. (This story will be updated later. We are following up on the discussions). It is expected that an update on the discussions from the TRIPS Council will be presented at the General Council Meeting next week on 9-10 May.
Bilateral meetings and small group meetings are expected in the coming days and weeks. “Members will finally begin text-based negotiations,” diplomatic sources said. WTO members have not engaged in text-based negotiations on the original proposal from India and South Africa. In the past, a lack of consensus was cited as a reason, to prevent text-based negotiations among all the 164 members of WTO.
In addition, WTO members continue to discuss WTO’s response to the pandemic that will also have an element on intellectual property. This process steered by Ambassador Dacio Castillo (Honduras) in his capacity as the General Council Chair's Facilitator. These discussions will address issues such as export restrictions, transparency, trade facilitation, transfer of technology among other issues. It also seeks to find a way on how WTO could work with other international organizations and how countries can preserve policy space during health emergencies.
Given the delay in the decision on the waiver, developing country diplomats also hope that they might be able to push for language that could be applicable for circumstances beyond the current pandemic. “We cannot be unprepared for the next emergency, there has to be an agreed understanding on WTO’s response during health emergencies,” a trade official said.
Undoubtedly, these are complex times. The DG has acknowledged that the ministerial in June 2022, is taking place against the backdrop of the COVID-19 pandemic, rising food and energy prices, debt distress, and war.
"This is not an ordinary Ministerial Conference," she said. The difficult context made reaching agreements both harder and more urgently necessary, she noted.
In the best of times, intellectual property issues at WTO have been thorny. With an estimated 15 million excess deaths associated with COVID-19, these are extraordinary circumstances that need innovative solutions. Will the WTO membership stand up?
This story has been updated to add the following:
See official update from WTO the TRIPS Council Formal Meeting on May 6: TRIPS Council hears initial reactions to Quad’s outcome document on IP COVID-19 response
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