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TWN Info Service on WTO and Trade Issues (Jun22/07)

8 June 2022
Third World Network

WTO: US storms out from discussions on WTO response to pandemic

Published in SUNS #9590 dated 8 June 2022

Geneva, 7 Jun (D. Ravi Kanth) – The United States apparently stormed out of a meeting on the
WTO’s response to the pandemic on 3 June in fierce opposition to the inclusion of language that
TRIPS flexibilities apply automatically to future pandemics, health emergencies and other
crises, placing the outcome on this major issue in the balance, said several people, who asked
not to be quoted.

The US is also joined by the EU, though Brussels said that it is willing to engage in negotiations
despite its serious concerns.

Washington, however, made the language on automaticity a “red line” and walked out of the
meeting, said several people, who asked not to be quoted.

In fact, it appears that the US is somewhat ready to block several key decisions concerning the
WTO response to the pandemic as well as the language on proposed WTO reforms, said people,
who asked not to be quoted.

The US has also expressed serious reservations on agriculture, particularly on the DG’s draft
decision on the removal of export restrictions on purchases made by the World Food
Programme (WFP). The US dropped the idea of a plurilateral pledge on the WFP issue, said
people, who asked not to be quoted.

AUTOMATICITY

Earlier, the ACP (African, Caribbean, and Pacific) group and several other developing countries
like Sri Lanka, Pakistan, Egypt, South Africa, and Tunisia among others stated in their restricted
document (Job/GC/304) that “we re-affirm the need for a solution on IP in addressing the
difficulties faced by developing countries in accessing TRIPS flexibilities to apply automatically
to future pandemics, health emergencies and other crises.”

During a small group meeting on finalizing the text on the WTO’s response to the pandemic for
the 12th ministerial conference (MC12) on Friday, the facilitator for the trade-related aspects of
the WTO response to the pandemic, Ambassador Dacio Castillo of Honduras, had to suspend
the meeting because of the US walkout from the meeting.

The chair acknowledged that he had to “suspend the drafting group session following a heated
debate on the question of balance.” For full transparency, Ambassador Castillo chose to explain
his decision.

Apparently, the European Union, before the start of the meeting of the small group on Friday,
informed the chair that “they were unhappy with the balance of the text that was emerging.”
The chair seems to have advised the EU to “revert to this issue after the consideration of all the
paragraphs before us given the sensitivity of the matter,” said people familiar with the
development.

The chair apparently told the EU that his intention was “to complete the consideration of the
texts today or tomorrow which would have allowed for a proper assessment of the overall
balance,” said people familiar with the development.

Apparently disregarding the chair’s above statement, the EU went ahead with its concerns about
“the balance of the text including its assessment of the progress being made on issues of
importance to it and what was being achieved in other areas – including on intellectual
property.”

According to several people, who spoke to the SUNS, the EU’s alleged “pestilent” comments
“triggered a heated debate including about the status of the automatic TRIPS trigger mechanism
for future pandemics.”

As to “whether this was a red-line”, the chair said “one delegation said it was, but that it was
ready to engage in a discussion.”

Without naming the US, the chair maintained that “given this response, another delegation
indicated that it could no longer continue its participation in these negotiations.”

Apparently, the chair made an effort to reach the US, but it is his assessment that it is not
“productive to continue with our work. I have informed the Chair of the General Council about
this situation.”

The facilitator is understood to have informed members that “this is a very serious situation,”
adding that he hopes “everyone appreciates what is at stake.”

Ambassador Castillo also cautioned members that “if this (situation) persists, we risk losing not
only a WTO Response to the Pandemic, including the TRIPS Waiver – but this could have
broader implications for other MC12 issues, for the conference itself and the credibility of this
organization.”

The chair said that if there is no resolution by Tuesday, he will make a report to the special
General Council (GC) meeting on Tuesday, when it meets for the last time before MC12.

GC CHAIR’S SEPARATE MEETING

Subsequently, the GC chair, Ambassador Didier Chambovey of Switzerland, apparently held a

meeting to discuss the outcome document for MC12.

The US and the EU also raised “red-lines” there, opposing the language proposed by the chair
that mentions that the WTO reforms will be based on “the foundational principles of the WTO”
as well as including developmental issues raised by a large number of developing countries.

Ambassador Chambovey is understood to have proposed the following language: “We

acknowledge the need to take advantage of available opportunities, address the challenges the
WTO is facing, and ensure the WTO’s proper functioning. We commit to work towards
necessary reform of the WTO. While reaffirming the foundational principles of the WTO, we
envision reforms to improve all its functions. The process should be open, transparent,
inclusive, and must address the interests of all members, including developmental issues. The
General Council will oversee the process, review progress and consider decisions, as
appropriate, to be submitted to the next Ministerial Conference.”

It is reliably learnt that India has apparently supported the GC chair’s formulation based on the
foundational principles and development issues, said a person, who asked not to be identified.

Surprisingly, in what appears to be a desperate attempt by the US and the EU to erase any
mention of the Marrakesh Agreement or the “foundational principles of the WTO” for discussing
reforms, Washington and Brussels seem to be leaving no stone unturned in their effort to pursue
reform by turning the WTO on its head, said people familiar with the development.

The US has apparently conveyed its opposition to the chair’s formulation, perhaps, treating it as
another “red-line”, the person said, who asked not to be quoted.

It remains unclear what emerged from a “green room” meeting that was supposedly scheduled
on Sunday, the person added.

TRIPS COVID-19

During the discussions in a “green room” meeting on the TRIPS COVID-19 draft outcome
document on 6 June, the DG and her deputy Ms Anabel Gonzalez apparently conducted the
crucial discussions, while the chair of the TRIPS Council, Ambassador Lansana Gberie of Sierra
Leone, remained a silent spectator, said people, who asked not to be quoted.

Yet, the DG and her deputy found it difficult to close the gaps among the members, particularly
the continued aggressive stance adopted by the United Kingdom and even Switzerland, who
challenged the draft agreement on several grounds with their textual suggestions that seem to
have atrophied the DG’s document, said people familiar with the discussions.

During the meeting, Switzerland and the UK inserted textual language in several paragraphs of
the DG’s text, that further curtailed the flexibilities centering on Article 31 of the TRIPS
Agreement, said a trade envoy, who took part in the meeting.

As reported by the Third World Network in an article on 7 June, the UK and Switzerland
“working in concert, a series of amendments have been proposed to the DG’s text to first limit
the scope of the decision, and then additionally to narrow the scope of the only waiver in the
text. Secondly, to limit application of the Decision specifically to the acts of production,
exportation and importation, without explicitly mentioning the act of “using” for domestic
purposes. Thirdly, to nullify the existing flexibility related to protection of undisclosed
information under Article 39.3 of the TRIPS Agreement. Fourthly, to impose an obligation to
notify the TRIPS Council prior to the shipment of vaccines produced under the Decision.”

Several developing countries like Argentina, Indonesia, and members from the African Group
raised their specific concerns on several paragraphs, including the need to include diagnostics
and therapeutics among others, said people, who preferred not to be quoted.

The US, which is one of the core members of the so-called “Quad” process that involved the
European Union, India, and South Africa, apparently remained silent at the meeting, while the
EU responded to some issues.

The DG apparently said several times that members should go back to the original draft
outcome document to clarify the issues raised during the meeting but was unable to address the
concerns raised by members, said people who asked not to be identified.
The Working Document which includes a collection of textual proposals as of 6 June 2022 (6
p.m) contains many textual proposals in square brackets.

Even the very first paragraph is in square brackets. It says: “[Notwithstanding the provision of
patent rights under its domestic legislation,][A][a]n[eligible] Member (first footnote) may [limit
the rights provided for under Article 28.1 of the TRIPS Agreement (hereinafter “the
Agreement”) by ]authorizing ][authorize ] the use of the subject matter of a patent (second
footnote) [required for] [for the purpose of] the production of COVID-19 vaccines without the
consent of the right holder to address COVID-19, in accordance with the provisions of Article 31
of this Agreement, as clarified and waived in paragraph 2 to 6 below].”

Argentina and Indonesia protested the deletion of “and supply” in the above paragraph.

Apparently, while footnote 2 was amended (“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 COVID-19 vaccine.”), paragraph
3(d) remains in square brackets.

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