WTO’s MC12 decision on the TRIPS waiver
Edward Kwakwa
Assistant Director General, Global Challenges and Partnerships Sector,
World Intellectual Property Organization
2022.09.14
1. A Ministerial Decision regarding the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement was adopted at the 12th Ministerial Conference (MC12) of the World Trade Organization (WTO) in Geneva, on June 17th, 2022. The rationale behind the decision was to diversify COVID-19 vaccine production capacity and to facilitate vaccine exports to developing countries, particularly to those with no capacity to manufacture their own vaccines.
2. At the outset, this short piece will analyze some key aspects of the TRIPS Ministerial Decision. It will focus more extensively on the factors that shaped the new TRIPS waiver (e.g., the fast evolution of events and the change of priorities during the COVID-19 pandemic, the state of multilateral negotiations at the WTO, as well as the complex relationship between developing countries’ public health needs and intellectual property protection, etc.), and the diverse reactions to the Decision.
Key features of the TRIPS waiver
3. The core provision of the TRIPS waiver states that “an eligible Member may limit the rights provided for under Article 28.1 of the TRIPS Agreement by authorizing the use of the subject matter of a patent required for the production and supply of COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic”. Also central to this waiver is the cancellation of the requirement to supply the products manufactured under the authorization predominantly to the domestic market, expressly allowing any proportion of the production to be exported to eligible Members.
4. The Decision applies exclusively to COVID-19 vaccines and does not cover other products or technologies, but WTO Members committed to decide within six months from the date of the Decision on the possibility of extending it to the production and supply of COVID-19 diagnostics and therapeutics.
5. While the Decision applies to all developing countries Members of the WTO, a footnote encourages developing countries with existing capacity to produce COVID-19 vaccines to undertake a commitment not to avail themselves of this Decision. This provision seems to aim at encouraging production in developing countries that currently have no capacity to produce and export COVID-19 vaccines, most notably in Africa. China is a Member which is bound by such a commitment not to avail itself of this Decision. This may also have something to do with the US position in the negotiations leading up to MC12, as expressed by the Deputy US Trade Representative Maria Pagan: “the second-largest economy in the world, which has COVID vaccines and mRNA technology, does not need the waiver.” At the same time, from a public health point of view, this provision represents a significant limitation of the waiver, because countries with real manufacturing capacity will not be expected to make use of it.
6. Some other significant features of the waiver are a stronger language on preventing re-exportation of products manufactured under the Decision and a flexible approach on the determination of adequate remuneration, which may take into account the humanitarian and not-for-profit purpose of vaccine distribution programs.
7. The mechanism established in the Decision has an applicability term of 5 years, but there is a possibility for the General Council to extend it. The General Council will also review the operation of the Decision annually. The waiver applies only to patents. It is recalled that the initial proposal by India and South Africa had sought a waiver from the implementation, application and enforcement not only of patents, but also of copyright and related rights, industrial designs, and the protection of undisclosed information.
Factors that shaped the TRIPS waiver
8. At MC11 in Buenos Aires, WTO Members failed to deliver substantive negotiated outcomes. Further, the WTO faced many struggles ranging from the US-China trade conflict to the Appellate Body crisis. More recently, a long pandemic exposed the world’s unpreparedness to face a large-scale global health crisis. The conflict in Ukraine, and a strong economic crisis further destabilized the already shaky foundation for multilateral cooperation and rule-making.
9. Under the leadership of a new Director General, the WTO was in desperate need for negotiated outcomes at the MC12. Members of the multilateral trading system aimed to show that multilateralism is still relevant, and that the WTO remains the central arena for trade negotiations where results can be delivered. And finally, the WTO Members managed to secure a package of agreements (the “Geneva Package”) after more than 5 days and nights of intense negotiations in Geneva at MC12. While showing that countries can set aside their differences and cooperate in the face of emergencies, the real value and usefulness of the “Geneva package” has been the subject of heated debates.
10. In order to consider the MC12 TRIPS outcome, one must bear in mind that it is part of a wider “package” of outcomes, meaning that not only proponents and non-proponents of the TRIPS waiver had to find compromise language, but also that correlations were made with other negotiating topics in order to arrive at a set of decisions acceptable for all Members. In between red lines, extremist proposals, and many crises that paved the way to MC12, the TRIPS waiver, together with the Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics, served the role of providing the world with a WTO response to the health emergency.
11. The long-standing debate on TRIPS rules, and whether they are fit for addressing health needs in developing countries, as well as the limited and delayed availability of vaccines in many low- and middle-income countries, are some other critical aspects that shaped the waiver. Some developing countries see intellectual property as a barrier in the way of expanding their production capacity and acquisition of new technology for health, therefore effectively constituting an impediment in their efforts to tackle the COVID-19 pandemic. In this vein, India and South Africa had submitted a proposal in October 2020 for a TRIPS waiver that was significantly wider and more ambitious than the final outcome. At the same time, many developed countries insist on the lack of proof that intellectual property does constitute a real obstacle for the production and distribution of COVID-19 vaccines and therapeutic products. Stemming from this position, in June 2021, the European Union submitted a counter-proposal to the India and South Africa waiver proposal, which was focused on encouraging the use of the existing TRIPS flexibilities, particularly of compulsory licensing and trade facilitation. In the end, the MC12 waiver is what could be considered a middle-ground compromise between the two proposals.
Contradictory reactions to the MC12 TRIPS waiver
12. While being praised by some, the MC12 TRIPS waiver is regarded as toothless by others, and is harshly criticized by yet others. The Decision proved to be one of the most contentious issues in the “Geneva package”. It seems that nobody is quite pleased with it, creating the impression that a large part of its value is a systemic one, where a negotiated outcome aiming to tackle the health crisis proved that WTO Members can come to consensus on emergency issues and that they remain committed to the multilateral trading system.
13. While some developing countries view the Decision as falling short of their expectations and not providing sufficient means for addressing present and future pandemics, notably due to its limited scope covering only vaccines and not covering therapeutics and diagnostics, other countries are clearly opposing new decisions that would enlarge the scope of the waiver, and want to observe first the use of existing flexibilities by gathering evidence on the impact of intellectual property on the access to COVID-19 vaccines.
14. At the same time, it is not only the content of the decision that is criticized, but also its timeliness. Things have been evolving very fast during the COVID-19 pandemic, requiring equally prompt measures from governments and international organizations. At first, the world needed to develop vaccines for a new virus in a record time. It was subsequently faced with the challenge of producing the vaccines in adequate quantities. At WTO, which postponed its MC12 (originally scheduled for December 2021) because of the sanitary emergency induced by a new strain of COVID-19, the TRIPS Decision was adopted only in June 2022. Many see very limited use in this Decision, given the relatively late stage of the pandemic, with some reports claiming that COVID-19 vaccines supply has surpassed the demand, and that the lack of adequate capacity and infrastructure to distribute the vaccines in a timely manner and persistence of trade barriers are the real problems now.
15. It goes without saying that large pharmaceutical groups have also been very critical of the MC12 TRIPS waiver. For example, the European Federation of Pharmaceutical Industries and Associations and Vaccines Europe stated that the TRIPS waiver is actually a backward step in the efforts to tackle the COVID-19 pandemic, because it undermines the solid intellectual property framework that facilitated research and innovation, and brought solutions to the health crisis.
Conclusion
16. The process of negotiating the new TRIPS waiver was very long and tedious. The final result is causing quite a bit of controversy. Research, development, and innovation need protection to provide us with fast and efficient remedies in health crises. At the same time solidarity, collaboration, sharing of intellectual property and manufacturing know-how are of utmost importance in a global health emergency that has been ravaging the world for over two years now. We need to make sure that no one is left behind in the race to tackle COVID-19 and other health crises. The MC12 TRIPS waiver is a step by the WTO in this direction. It remains to be seen if it will prove to be efficient and fit for purpose, or if further adjustments or completely different instruments will be needed.
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Notes about the author
Edward Kwakwa is Assistant Director General, Global Challenges and Partnerships Sector, World Intellectual Property Organization (WIPO) in Geneva. He served as General Counsel at WIPO from 2004 until 2016. Kwakwa holds an LL.B. degree from the University of Ghana, an LL.M. from Queen’s University in Canada, and an LL.M. and a J.S.D. from Yale Law School in the U.S.A. Before joining WIPO, Kwakwa practiced corporate and international trade law and investment with the law firm of O’Melveny and Myers in Washington, D.C. He also worked as International Legal Adviser at the Commission on Global Governance in Geneva, as Senior Legal Adviser at the Office of the United Nations High Commissioner for Refugees (UNHCR), and as Legal Affairs Officer at the World Trade Organization (WTO). His publications include four books and numerous articles on international law.
In September 2011, he was elected as an Associate Member of the Institut de Droit International, and became a full Member in September 2017. He served from 2001 to 2004 on the Executive Council of the American Society of International Law (ASIL), from 2012 to 2015 as Counselor of the ASIL, and as Vice President of the ASIL from 2015 to 2017. He is Adjunct Professor of Law at the Graduate Institute of International and Development Studies in Geneva, and has been an Adjunct/Visiting Professor of Law at the Fletcher School of Law and Diplomacy, the University of Denver College of Law, and the University of Pretoria, South Africa, where he has been appointed as an Extraordinary Professor in Law.