After the surprise of the United States coming out in support of a TRIPS waiver for COVID-19 vaccines and related products, everyone has been looking to the EU and other wealthy countries to see if they would come around and support the general idea of a waiver. Negotiating a waiver will be a challenge even if every WTO Member supports it, because agreeing on specific language will be difficult. But support in principle is a necessary step.
From what the EU just announced today, it is clear they do not support a waiver at the moment. Here are some documents that describe the EU position: Questions and answers; EU communication to the WTO General Council; EU communication to the WTO TRIPS Council. The three key components of the EU's proposals are:
- limit export restrictions and facilitate trade;
- encourage the expansion of vaccine and treatment production, in collaboration with industry; and
- address intellectual property issues.
Here are a few quick thoughts on each.
On the issue of export restrictions, the EU says:
All WTO members should be ready to subscribe to the G20 commitment to ensure that any export restrictive measures relating to health products are targeted, transparent, proportionate, and temporary, and consistent with WTO obligations. Such principles have been incorporated into a draft Declaration on the Trade and Health Initiative (‘Covid-19 and Beyond: Trade and Health (JOB/GC/251/Rev.2’) that the EU along with 12 other WTO members put forward back in December 2020. It is encouraging that 50 WTO members (including 27 EU Member States) have signed up to this initiative but the involvement of the whole WTO membership is required for it to have a significant effect. This initiative constitutes a basis that WTO membership should build on not only in a response to the current crisis but also in anticipation of any future emergency.
The draft Declaration develops further the concept of temporariness, and strengthens Members commitments regarding transparency and proportionality.
I have a sense the EU is trying to play up its differences with the U.S. in this area. Back in April, someone in the White House put out a long Twitter thread trying to defend the U.S. position, but in the process seemed to confirm that the U.S. measures were a de facto export restriction. One of the tweets in the thread stated:
To make vaccine here in the US we have used the DPA to ensure we have access to all needed supplies with many US companies. DPA in these cases just means U.S. companies must prioritize their government contracts ahead of other orders, it doesn’t mean an export ban
This seems to refer to vaccine inputs as opposed to vaccines themselves, but the same principle applies in that context. Maybe there's no export "ban," but if the DPA has signed purchase contracts with pharmaceutical companies that require prioritizing sales to the U.S. government, practically speaking this means the U.S. is restricting exports. The Biden administration has tried hard not to acknowledge any of this, but from what I can tell it's a real problem in terms of getting vaccines to the rest of the world. The Biden folks do seem to be looking for workarounds, but it's difficult when this is the starting point. Just today, the Washington Post reported: "Responding to criticism that the United States has hoarded lifesaving coronavirus vaccines, the Biden administration on Thursday announced a plan to share 25 million doses globally in what officials described as a down payment on tens of millions more doses to come." This is good, although it doesn't really deal with the underlying problem.
Next we get to the point about encouraging production. Here the EU says:
Governments should strongly encourage vaccine and therapeutics manufacturers and developers to contribute towards the objective of expanding production and ensuring affordable supply of vaccines and therapeutics to low- and middle-income countries during the pandemic. Such actions could include licensing agreements, providing for the sharing of knowhow, tiered pricing which involves a non-profit sale to the low-income countries, contract manufacturing and new investments in manufacturing facilities in developing countries.
This could mean a number of things. It could mean strongly worded requests by governments for manufacturers to agree to licensing agreements; it could mean government payments to the manufacturers to do so; or it could mean laws or regulations that require the manufacturers to do so. Here, I think it's worth noting that some day it might become clear that the U.S. support for a TRIPS waiver may have been designed as the "strong encouragement" the EU mentions.
Finally, on intellectual property, the EU seems to be pushing for an easier use of compulsory licensing:
In the absence of voluntary licences, compulsory licences are a legitimate tool to ensure that intellectual property rights do not hinder the expansion of production during the pandemic. The EU therefore calls on WTO members to agree that:
- the pandemic is a circumstance of national emergency, and therefore the requirement to negotiate with the rights holder may be renounced;
- we need to support manufacturers who are ready to produce vaccines or treatments at affordable prices under a compulsory licence, and that the level of remuneration paid by that manufacturer to the patent holder should reflect such affordable prices;
- the compulsory licence could cover any exports to countries that lack manufacturing capacity, including via COVAX.
The EU also sets out the following view of intellectual property in this context:
6. The rapid development of several safe and effective COVID-19 vaccines has shown the value of intellectual property, in terms of the necessary incentives and rewards to research and innovation. With the support of public financing, pharmaceutical and biotechnology companies throughout the globe have built on their expertise and invested resources to find solutions against COVID-19. ...
Maybe some day we'll have a debate on the extent to which 20 year patent terms contribution to innovation. Is 20 years the right number? Would prizes work better? It's hard to get governments to think about these things. Anyway, it's great that the pharmaceutical companies came up with the vaccines, but I think the TRIPS waiver is not quite what some people are making it out to be. As I read the various exceptions and flexibilities in the TRIPS Agreement, there are pretty strong arguments that governments can do all the things they want to do (e.g., issue compulsory licenses) under the existing rules. The TRIPS waiver just gives them a little additional certainty that they won't be challenged at the WTO (and possibly in domestic courts as well, although it's hard to get a handle on how that would play out). I'm not sure why the EU is drawing the line where they are, but they seem determined not to budge and support anything called a "waiver."