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Source: Small Island Developing States

As reports of COVID-19’s second wave dominate news headlines, the urgency for a coordinated international response has grown, especially as the pandemic continues to expose the potential limitations of existing global governance frameworks. In Geneva, the situation has lately revived one of the most entrenched debates in international trade: whether the World Trade Organization’s (WTO) rules on intellectual property rights protections are well-suited to responding to public health needs and whether further flexibilities and new approaches are needed, especially in times of crisis.

This debate took center stage at the 20 October meeting of the WTO’s TRIPS Council – the body that deals with the implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Ahead of the gathering, India and South Africa, which have long been vocal about the TRIPS Agreement’s limitations when it comes to ensuring fair, affordable, and equitable access to medicines, submitted a communication proposing a waiver from certain TRIPS provisions for “the prevention, containment, and treatment of COVID-19.”

Among the concerns they raise are “intellectual property rights hindering or potentially hindering timely provisioning of affordable medical products to the patient.” India and South Africa note the urgent changes that some countries have made to domestic patent laws “to expedite the process of issuing compulsory/government use licenses.”

Another issue the two countries flag involves the “institutional and legal difficulties when using flexibilities available in the [TRIPS Agreement],” especially the relatively new article 31 bis and related annex and appendix that allow for granting special compulsory licenses for pharmaceuticals meant for export, expanding their potential use beyond production destined for domestic markets, as originally set out in TRIPS article 31(f). 

The waiver proposed by India and South Africa targets four sections of the TRIPS Agreement – Sections 1, 4, 5, and 7 from the second part of the treaty. These sections deal with copyright and related rights, industrial designs, patents, and protection of undisclosed information, respectively. The waiver would cover the “implementation, application, and enforcement” of these sections insofar as they apply to the “prevention, containment, or treatment of COVID-19.”

The proposed COVID-19 waiver, which takes the form of a draft decision for the WTO General Council, leaves in brackets the number of years that it would be in place, meaning this would be up for negotiation among WTO members. It also foresees annual reviews until the waiver’s application ends.

The proposed waiver was reportedly opposed by the EU and the US, as well as a mix of developed and developing economies, while others sought further time to consider its feasibility and wider impact, beyond the immediate pandemic needs.

The EU reportedly argued that intellectual property rights were not proving to be a hindrance to the COVID-19 response. Rather, the EU said, the core issues involve “rapidly developing safe and effective treatment or vaccine against COVID-19; increasing manufacturing capacity; keeping global supply chains open; [and] ensuring broad and equitable global distribution of treatment and vaccines once they become available,” according to a copy of their statement circulated by Knowledge Ecology International.

The issue will be revisited before the end of the year, according to a WTO summary of the meeting, in line with the existing rules for reviewing proposed waivers. A separate technical workshop on the trade-health-intellectual property nexus was held at WTO headquarters the day after the TRIPS Council meeting, focusing on how to improve the collaboration between these areas in the COVID-19 context.

TRIPS Flexibilities and WTO Waivers

The TRIPS Agreement, which has been in force since 1995 and was one of the more contentious outcomes of the Uruguay Round negotiations that established the WTO, has long faced intense scrutiny. Critics warn that its approach of setting minimum standards for intellectual property rights protections may, in practice, prioritize the needs of commercial pharmaceutical companies over public health imperatives, making efforts to ensure fair and equitable access to medicines even harder.

Not long after its entry into force, WTO members negotiated and adopted the 2001 Doha Declaration on the TRIPS Agreement and Public Health in a bid to address some of these challenges. The declaration recognizes various flexibilities in the TRIPS Agreement that are at members’ disposal, and clarifies that the WTO’s intellectual property rules “can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.”

Since then, the practical impact of TRIPS and its flexibilities on access to medicines has continued to spark intense debate both within the trade community, as well as among public health experts, civil society groups, and intergovernmental agencies. Notably, a 2016 report by a High-Level Panel on Access to Medicines convened by the UN Secretary-General openly criticized the adverse impacts of “TRIPS-plus” provisions in regional trade agreements, stating that “expansive patent and test data protections on health technologies, which exceed the minimum standards [under TRIPS] may impede access to health technologies.” This was famously a sticking point in the negotiations for the deal previously known as the Trans-Pacific Partnership, with the US being the biggest proponent of these types of protections. Many of these were later suspended by the other countries involved in the agreement after the US withdrew.

Moreover, the high-level panel’s report warned that governments often face “political and economic pressure” not to use the flexibilities they are allowed under TRIPS, which, in turn, “undermines the efforts of states to meet their human rights and public health obligations.”

India and South Africa refer to the challenges inherent in putting these TRIPS flexibilities into practice as part of the rationale for their proposal, especially given that many developing and least developed countries (LDCs) may lack the manufacturing capacity to do so. Their suggested approach does not aim at clarifying these flexibilities’ use, given the “exceptional circumstances” of the pandemic, and instead pitches a temporary, agreed deviation from WTO rules.

The WTO Agreements make this option possible under waivers, which must be agreed by WTO members and be time-bound, “exceptional,” and subject to certain “terms and conditions,” which are qualifications that have been debated in past trade disputes.

In practice, the purpose of WTO-approved waivers has varied significantly. Some waivers have tackled commercial issues, such as the famed dispute between the then-European Communities and various Latin American countries over trade in bananas. Others have involved unilateral trade preference schemes or public interest issues, including, notably, the 2003 waiver for the Kimberley Certification Scheme for Rough Diamonds, which aims to tackle trade in conflict diamonds and has been renewed regularly. There have also been past waivers involving the TRIPS Agreement, including the 2003 waiver that eventually become the above-mentioned Article 31 bis.

Challenges of TRIPS for LDCs: Transition Period Renewal Talks Begin

While the COVID-19 waiver took center stage at the TRIPS Council meeting, another crucial issue involving access to medicines and international development was also on the agenda. At issue was whether the WTO’s poorest members would be able to continue being exempt from most TRIPS rules after July 2021, and thus have the space to continue developing their “technological base” and adapt to the economic and financial challenges inherent in this process, without risking a WTO dispute for lack of TRIPS implementation or enforcement.

This transition period, codified in Article 66.1 of the TRIPS Agreement, from 1996 – the date when the treaty became applicable to the rest of the WTO membership, one year after the global trade club opened its doors. This article exempts LDCs from being required to implement the vast bulk of the WTO’s intellectual property rules, with the exception of articles devoted to national treatment, most favored nation treatment, and “multilateral agreements on acquisition or maintenance of protection” under the World Intellectual Property Organization (WIPO).

This exemption has been renewed multiple times, with the taking place in 2013. A separate LDC transition period for applying certain WTO rules on pharmaceutical products is in place until 2033, having last been extended five years ago. Meanwhile, WTO members are due to meet in the new year to review the implementation of a separate TRIPS article devoted to encouraging technology transfer from companies based in developed countries to LDCs. However, broader systemic questions remain, including whether more can and should be done to build up the technological and manufacturing capabilities of LDCs in these areas, as well as whether the TRIPS Agreement itself needs a major rethink in light of the lessons seen over its 25-year history – especially in the wake of today’s pandemic.

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This policy brief was written by Sofía Baliño, Communications and Editorial Manager, Economic Law and Policy, IISD. 

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