Dangers of “take-it-or-leave-it” compromise on TRIPS waiver

Intellectual property rights

Geneva, 23 Feb (D. Ravi Kanth) – In the face of growing “vaccine inequity” amidst the ongoing COVID-19 pandemic across countries, the chances of finalizing a credible outcome on the temporary TRIPS waiver at the WTO seem to be getting slimmer, with the likelihood of a “take-it-or-leave-it” compromise solution being foisted on the members apparently gaining ground, said people familiar with the development.

A senior WTO official, who is overseeing the discussions on the TRIPS waiver between the trade ministers/senior officials of the United States, the European Union, India, and South Africa, has cautioned that no side will be satisfied with the final outcome.

In her brief statement at a TRIPS Council meeting on 22 February, the Deputy Director-General (DDG) Ms Anabel Gonzalez from Costa Rica said that the progress has been difficult during the ongoing quadrilateral consultations between the four members on the temporary TRIPS waiver and the EU’s proposal on compulsory licensing which mostly restates Article 31 of the TRIPS Agreement, said people, who asked not to be quoted.

Without sharing the concrete details of the ongoing consultations among the four members, Ms Gonzalez said the talks have been intensified during the past several weeks, insisting that with some additional dedicated work, a compromise could be reached soon, said people who asked not to be quoted.

Echoing WTO Director-General Ms Ngozi Okonjo-Iweala’s earlier statement, Ms Gonzalez, who had earlier worked with the Washington DC-based liberal trade think-tank the Peterson Institute for International Economics, emphasized that the aim is to arrive at a workable compromise, adding that no one side will be completely happy with the final outcome.

Ms Gonzalez also indicated that work is being done on what pertains to vaccines, suggesting that a second track would address the issues of diagnostics and therapeutics, said people, who asked not to be quoted.

However, the DDG’s comments on the compromise that is being worked out ostensibly by the DG and herself seem to have raised some fears because of what had happened with such compromises in the past, including the paragraph six mechanism of the Doha Declaration on the TRIPS Agreement and Public Health, said people familiar with the development.

Also, by dragging out the quadrilateral talks till the eleventh hour before the upcoming WTO’s 12th ministerial conference (MC12), to be held sometime in the second week of June, the increasing chances of foisting a “take-it- or-leave-it” compromise solution on the members could pose a serious problem for the developing countries, said people who asked not to be quoted.

The temporary TRIPS waiver, co-sponsored by 65 countries with a groundswell of support from parliamentarians, leaders from many countries and international civil society groups, seeks to suspend certain provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information for ramping-up the production of diagnostics, therapeutics, and vaccines across countries to combat the COVID-19 pandemic.

In contrast, the EU’s proposal on compulsory licensing mostly restates Article 31 of the TRIPS Agreement.

However, the EU’s proposal has so far failed to garner much support among the members, said people, who asked not to be quoted.

DEVELOPING COUNTRIES DEMAND TRIPS WAIVER

In her intervention at the TRIPS Council meeting, South Africa’s trade envoy Ambassador Xolelwa Mlumbi-Peter apparently acknowledged the usefulness of small-group consultations for finding a landing zone that can take members forward in these discussions on the TRIPS waiver.

She expressed serious concern that the delay in approving a TRIPS waiver is hampering efforts to diversify proper production of vaccines, and address “vaccine inequity.”

In Africa, countries are still faced with “vaccine inequity” as 80% of Africans are yet to receive vaccines, said South Africa.

The South African trade envoy argued that the TRIPS waiver would ensure freedom to operate, suggesting that production beyond fill-and-finish is essential.

South Africa reminded members that while it welcomes the support from the global community in establishing an mRNA hub in South Africa, as well as manufacturing facilities in Kenya, Tunisia, Nigeria, Senegal and Egypt, it noted that the full operationalization of the mRNA hub faces hurdles due to the intellectual property barriers, said people, who asked not to be quoted.

Tanzania, which is one of the co-sponsors of the temporary TRIPS waiver, said that it is looking forward to the quadrilateral process to be completed soon so that members could finalize the waiver.

Bangladesh apparently said the least-developed countries would like to know how the mRNA hub will work. It sought to know how members are going to deal with issues concerning diagnostics and therapeutics.

India said that it has engaged constructively on this crucial issue all these months, adding that it remains committed to working towards finding a practical and effective multilateral solution on this very critical issue.

Indonesia, which is also a co-sponsor of the temporary TRIPS waiver, sought to know more about the negotiations between the four members on the TRIPS waiver.

Tunisia suggested that a credible outcome on the waiver is essential for the results on other “deliverables” for MC12, noting that it is one of the beneficiaries among the six countries in Africa for setting up the mRNA hub.

The EU, which has fiercely opposed the temporary TRIPS waiver, reiterated its commitment to finding a solution on intellectual property that can contribute to the diversification of production of COVID-19 vaccines.

Brussels expressed confidence that WTO members can find the bridge between those members who advocate for a waiver and those who believe that the TRIPS Agreement provides enough flexibility to ensure that the enabling qualities of intellectual property can be used to the maximum.

The EU maintained that it has shown utmost flexibility and has moved its position significantly throughout this process.

It touted its proposal, saying that it would allow members to authorize their manufacturers to produce and export vaccines in the fastest possible manner and without red tape, and with maximum flexibility as to the legal instruments used to do so.

The US apparently said it has stated its support for a waiver of intellectual property protections for COVID-19 vaccines, adding that it will continue to engage with members to look for areas of convergence that can lead to a solution, including its participation in the Director-General’s consultations.

Several other members such as Chile, the African Group, the LDC Group, New Zealand, the United Kingdom, Australia, Nigeria, Japan and Switzerland made their respective interventions.

Apparently, several members expressed confidence over the ongoing efforts to bring about convergence on this most important issue that has been blocked by a handful of countries for the past 18 months, said people, who asked not to be quoted.

SWITZERLAND CRITICIZES SMALL-GROUP CONSULTATIONS

At the TRIPS Council meeting, Switzerland and the United Kingdom raised sharp concerns over the continued “opacity” of the small-group consultations among the United States, the European Union, India and South Africa on the temporary TRIPS waiver and the EU’s proposal on compulsory licensing.

Switzerland, which is one of a handful of countries that has severely opposed the waiver, has, for the first time, come down heavily on the small-group consultations, saying that they do not correspond to the fundamental WTO principles of inclusiveness, transparency or regular reporting to the membership.

Bern raised concerns about the imbalance of representation in this small-group process and demanded to be part of it. An inclusive and transparent process is indispensable if we are to find a mutually agreeable outcome on this matter, Switzerland said.

Switzerland maintained that any WTO outcome needs to be comprehensive and balanced in order to be meaningful, saying that IP has played a positive role in fighting this pandemic effectively.

The UK, which has also vehemently opposed the waiver, raised some doubts about small-group formats ensuring transparency and representation of the wider WTO membership, especially if the composition of a grouping does not represent a range of views and positions of members.

The UK considered it important to remember that any agreement reached outside of the TRIPS Council will need to be presented, scrutinized, and discussed by all WTO members to arrive at an agreement by consensus.

Several other countries also called for greater transparency and emphasized in their meetings with TRIPS Council chair, Ambassador Dagfinn Sorli from Norway, that the wider membership will have to be included in discussions of any approach or proposal that could be developed into a consensus-based outcome.

At the TRIPS Council meeting, members adopted the draft statement proposed by the TRIPS Council chair to continue discussions on either the waiver or the EU’s proposal on compulsory licensing, due to lack of convergence among the members.

TRIPS COUNCIL CHAIR’S DRAFT STATEMENT

The full text of the TRIPS Council chair’s draft statement is as follows:

“Report under Article IX:3 of the Marrakesh Agreement

ON THE CONSIDERATIONS BY THE TRIPS COUNCIL ON THE REVISED “PROPOSAL FOR A WAIVER FROM CERTAIN PROVISIONS OF THE TRIPS AGREEMENT FOR THE PREVENTION, CONTAINMENT AND TREATMENT OF COVID-19” (IP/C/W/669/Rev.1)

1. At the meeting of the TRIPS Council on 15-16 October 2020, India and South Africa introduced document IP/C/W/669, requesting a waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19, which had been circulated on 2 October 2020 and has since been co-sponsored by the delegations of Kenya, Eswatini, Mozambique, Pakistan, Bolivia, Venezuela, Mongolia, Zimbabwe, Egypt, the African Group, the LDC Group, the Maldives, Fiji, Namibia, Vanuatu, Indonesia and Jordan.

2. Since the introduction of the document, discussions took place in various formal and informal TRIPS Council meetings. Delegations exchanged views, asked questions, sought clarifications and provided replies, clarifications, and information, including through documents IP/C/W/670, IP/C/W/671, IP/C/W/672, IP/C/W/673 and IP/C/W/674, on the waiver request.

3. On 21 May 2021, the co-sponsors issued a revised proposal which was circulated in document IP/C/W/669/ Rev.1. The revised waiver request was presented at an informal open-ended meeting of the Council on 31 May, and introduced at its formal meeting on 8-9 June 2021. It has since been co-sponsored by Malaysia and Argentina. On 29 September 2021, the co-sponsors circulated a summary of their interventions in document IP/C/W/684.

4. Status reports on the considerations by the TRIPS Council on the revised “Proposal for a Waiver from Certain Provisions of the TRIPS Agreement for the Prevention, Containment and Treatment of COVID-19” were delivered to the General Council on 3-4 March, 5-6 May, 27 July, 7 October and, most recently, on 22 November 2021.

5. In the course of discussions on the revised waiver proposal, delegations held focused discussions on the topics of “scope”, both from the perspective of products and of IP rights, on “duration”, “implementation” and on protection of undisclosed information. Delegations engaged positively and their detailed substantive exchanges helped clarify various aspects and nuances of positions. While delegations remain committed to the common goal of providing timely and secure access to high-quality, safe, efficacious and affordable vaccines and medicines for all, disagreement persists on the fundamental question of whether a waiver is the appropriate and most effective way to address the shortage and inequitable distribution of and access to vaccines and other COVID-related products.