EU, allies adopt diversionary tactics on TRIPS waiver at WTO

Intellectual Property cover

Geneva, 8 Nov (D. Ravi Kanth) – Notwithstanding the groundswell of international support for the much-delayed TRIPS waiver, a handful of countries led by the European Union seem to be adopting “diversionary” tactics in finalizing the waiver as part of the WTO’s response to the COVID-19 pandemic at the 12th ministerial conference (MC12) scheduled to begin in Geneva on 30 November, said people familiar with the development.

At an informal meeting of the TRIPS Council on 5 November, the participants echoed divergent positions on how a breakthrough on the TRIPS waiver must be accomplished, said participants, who asked not to be quoted.

During the closed-door bilateral/small-group consultations held in the past two weeks between the European Union, the United States, India, and South Africa among others, the core issues raised in the waiver appear to have been skirted without any engagement, while seemingly unimportant issues appear to have been discussed, including the EU’s proposal relating to the use of compulsory licenses, said people familiar with the discussions.

In the bilateral/small-group consultations seemingly held in an opaque and secretive manner, apparently issues concerning the likely dispute settlement proceedings that could arise from the implementation of the TRIPS waiver seem to have figured.

However, there is no clarity on how the moratorium on initiation of dispute proceedings in the Dispute Settlement Body (DSB) will be factored in the final outcome, said people familiar with the development.

Also, it is not clear whether the moratorium will apply only to vaccines or to all three areas, namely diagnostics, therapeutics, and vaccines, said a person, who asked not to be quoted.

The 64 co-sponsors of the TRIPS waiver proposal had already included a paragraph in their revised proposal (IP/C/W/669/Rev.1) on dispute settlement issues.

That paragraph proposed that “members shall not challenge any measures taken in conformity with the provision of the waivers 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.”

From the statements made at the TRIPS Council meeting by some of the co-sponsors of the TRIPS waiver as well as the handful of countries including the United States, the European Union, Switzerland, and the United Kingdom, it appears that some progress has been made.

However, the members from the opposing sides did not mention what that progress would constitute in terms of suspending provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents and protection of undisclosed information for ramping up production of diagnostics, therapeutics, and vaccines across countries in combating the COVID-19 pandemic, said people, who are familiar with the proceedings at the informal TRIPS Council meeting.

The pandemic has already claimed more than 5 million lives so far, according to official figures, or well over 15 million as per the unofficial figures that are prepared by researchers in various international universities.

If the bilateral/small-group consultations are to be credible then the participants must share with the membership the contents of their proceedings, otherwise, the developing countries could suffer yet another loss in the global trade negotiations when a “take-it-or-leave-it” outcome is foisted on them at MC12, said people, who asked not to be quoted.

At the TRIPS Council meeting, the co-sponsors of the TRIPS waiver proposal expressed sharp concerns over the non-engagement of a handful of countries on their proposal.

TRIPS CHAIR’S REPORT

The chair of the WTO’s TRIPS Council, Ambassador Dagfinn Sorli from Norway, reported that many members have stuck to their positions.

He said several countries reported that they were actively engaged in frank and candid bilateral discussions in a solution-oriented framework.

The chair said he would keep open the TRIPS Council agenda items for a little longer period of time in order to permit delegations to continue engaging in their consultations.

Members also asked for additional time for their consultations, the chair said, suggesting that he would prepare his status report to the General Council, scheduled to meet on 22-23 November, until there is more clarity on the ongoing discussions.

In his report (Job/GC/279) to the informal Doha Trade Negotiations Committee (TNC) meeting on 25 October, the chair said that “the co-sponsors of the revised waiver proposal once again indicated their flexibility towards considering the EU proposal as a complementary approach, but emphasized that – in their view – a TRIPS waiver was a central and necessary element in the WTO’s response to the pandemic.”

The chair said “they urged Members to end the binary view of the two proposals as alternatives, and suggested that we work with the General Council chair and the facilitator, Ambassador Walker, to ensure that the on-going TRIPS waiver discussions are also recognized in the facilitator’s process on the WTO’s response to the pandemic.”

The chair, who is from Norway, a member of the Ottawa Group of countries led by Canada, said “other members, while welcoming the increased engagement in the small-group consultations, said they remained unconvinced that a waiver would be an appropriate or effective tool to scale up production or ensure equitable distribution of vaccine doses around the world.”

These other members (who were not named), according to the chair, “highlighted the broader Trade and Health initiative as the right tool to address the supply chain bottlenecks that the pandemic response was facing.”

Ambassador Sorli said “some urged convergence on the basis of the EU proposal aimed at clarifying, or improving the functioning of, existing TRIPS flexibilities.”

The chair said “while it was clear that discussions had not bridged the persisting disagreement on the fundamental approaches underlying the different proposals, all delegations remained willing to continue discussions on the proposals in the various formats we had used in the past.”

The chair said that “in light of this situation, the TRIPS Council decided to keep the agenda items related to these discussions open, in order to permit Members to continue exploring common ground, and with a view to resuming the Council meeting when Members might be closer to reaching consensus on a recommendation.”

CO-SPONSORS CALL FOR URGENT OUTCOME ON WAIVER

At the informal TRIPS Council meeting, South Africa apparently said that there are no breakthroughs that can be reported at this juncture, adding that useful conversations are taking place and that the resolve of the co-sponsors with regards to the TRIPS waiver remains intact.

South Africa indicated that it will intensify engagement in all configurations with a view to finding solutions.

It expressed “a great deal of disappointment” over the continued refusal by a very small minority of members to even engage in the text-based negotiations.

Notwithstanding the disappointment, South Africa suggested that some modest progress is being made in the bilateral/small-group consultations, adding that it remains optimistic and that the window is open for only a few weeks before MC12.

It cautioned that if members do not agree on a decision soon then history will judge the WTO most unfavourably.

South Africa also suggested that another encouraging development is that members have apparently moved from their “ideological” positions with regards to the role of IPRs (intellectual property rights), said people familiar with the proceedings.

South Africa indicated its willingness to engage with all proposals with a view to seeking an outcome that truly responds to the need to ramp up and diversify production of vaccines and other COVID-19 related medical products in developing countries.

South Africa said the final solution must include the use of all policy instruments within the WTO toolbox, taking into account the constraints faced especially by developing countries for which the solution is designed.

It concluded that members cannot see an MC12 outcome that does not address the TRIPS waiver proposal in a serious manner.

In a similar vein, India warned that without an outcome on the TRIPS waiver proposal, there will not be a credible WTO response to the pandemic.

India apparently expressed regret that, despite the various outreach efforts in the past months, a few members continue to show lack of enthusiasm in engaging on the TRIPS waiver text.

Without naming these members, Pakistan severely criticized “a couple of delegations” for not allowing the discussion on the TRIPS waiver to move forward.

It said that while things get stalled at the WTO, the pandemic, however, is not stopping.

Given the little time left for MC12, Pakistan said members are fast approaching the point where the waiver either gets adopted and incorporated into the WTO as a response to the pandemic, or WTO members prepare themselves to face the world without having delivered any response.

Pakistan argued that the political will and the evidence is there to find a solution and members must use all their skills to find the landing zone that brings all elements together in the respective texts and other complementary proposals.

Sri Lanka said that the proposal of the European Union to improve the use of the compulsory licensing system is a tool that members can benefit from, but that other existing IP rights regimes that are also hindering equitable access to vaccines and other medical products must be addressed.

Nigeria said that it is pleased to hear about the “growing consensus” among members around the idea that manufacturing companies ready to produce vaccines can be put in a position to do so without the risk of infringing on intellectual property rights.

Nigeria stressed that this can be fully achieved if members agree on a TRIPS waiver – the only realistic way to ensure an equitable distribution of vaccines and to scale up vaccine production in developing countries.

Nigeria said that while the EU’s proposal to improve and facilitate the use of TRIPS flexibilities, particularly the compulsory licensing system, is a positive step, it is insufficient to address a global pandemic of this level because the system remains non-transparent and does not contribute to the global commitment of ensuring that vaccines and COVID-related tools are readily accessible in a timely and cost-efficient manner.

EU TOUTS ITS PROPOSAL

The EU touted its proposal relating to the use of compulsory licenses, arguing that its proposal is pragmatic, targeted and effective in responding to the current needs while keeping the necessary incentives for innovation.

Responding to the concerns raised by Nigeria, the EU said that its proposal provides for tools that can be used in times of a pandemic and that it can contribute to overcome potential IP-related obstacles.

As regards the work between now and the next TRIPS Council meeting, the EU favoured bilateral exchanges being given priority and that sufficient time should be granted for these exchanges to take place in a transparent manner.

Switzerland maintained that members’ views widely diverge on the fundamental point of the role and significance of IP and TRIPS in the fight against the pandemic.

The United Kingdom called on members to make use of all policy options available to access COVID-19 goods through flexibilities or legitimate tools to access pharmaceutical products.

The United States spoke about the consultations held by the US Trade Representative (USTR) Ambassador Katherine Tai in the capital as well as bilaterally with members in Geneva, but did not divulge their contents, said people familiar with the proceedings.

The US said it will continue to engage with members and look for areas of convergence that can lead to a solution ahead of MC12.

China said that it is ready to work with all parties to enhance vaccine accessibility and affordability in developing countries.

China said that it remains engaged with members in all forms of consultations and discussions in order to achieve a meaningful result.

Australia said that it looks forward to building on the shared understanding that IP should not pose a barrier to vaccine access and to securing a positive outcome at MC12, which will require both ambition and compromise for members.

Australia said it supports the waiver and its availability to work closely with all members to find common ground in the lead-up to MC12.

“We’ve been pleased to hear from some of those members with the strongest views on this issue that they have been engaged in bilateral consultations with a solutions-orientated mind-set,” Australia added.

NON-VIOLATION AND SITUATION COMPLAINTS

Also at the informal TRIPS Council meeting, the WTO members agreed on a draft ministerial decision on non- violation and situation complaints (NVSCs), which is expected to be adopted at MC12.

Under the draft decision, the TRIPS Council would be asked to continue its discussions on this issue and to make recommendations to the 13th WTO Ministerial Conference.

In the meantime, members would refrain from bringing such cases to the dispute settlement system.

This “moratorium” has been extended several times, from one Ministerial Conference to the next. NVSCs refer to whether and under what conditions members can bring WTO dispute complaints where they consider that another member’s action, or a particular situation, has deprived them of an expected advantage under the TRIPS Agreement, even though no obligation under the Agreement has been violated.