[CTC] China says it won’t use new TRIPS proposal as WTO moves to text-based talks

Wed May 11 05:50:07 PDT 2022

China says it won’t use new TRIPS proposal as WTO moves to text-based talks
Inside US Trade, May 10, 2022 at 4:59 PM

The majority of World Trade Organization members this week supported the recently released compromise proposal to waive some intellectual property protections for COVID-19 vaccines as the basis for text-based negotiations in Geneva, a process likely to be at least somewhat smoothed by China’s pledge on Tuesday not to take advantage of the text’s flexibilities.

The proposal, presented last week to the members by Director-General Ngozi Okonjo-Iweala following high-level negotiations with the U.S., the European Union, India and South Africa, has been largely welcomed by members for fueling momentum in the long-stagnated talks, although several have raised a variety of concerns with the text. During a General Council meeting on Tuesday, members agreed the text could be a “solid basis for further discussions,” according to a WTO readout of the meeting. But, as they did at a recent meeting of the Council for Trade-Related Aspects of Intellectual Property Rights, members also said they needed more time for domestic consultations before they could begin negotiations in Geneva, the WTO noted.

This reflected the response from the U.S., one of the “Quad” of members part of the director-general's high-level process. “We welcome the step that the Director-General has taken to put forward an official text for Members to consider and to consult on,” U.S. Ambassador María Pagán said, according to a copy of her General Council remarks. “We are actively engaged in domestic consultations on the text and look forward to continuing to engage with all Members to look for areas of convergence that can lead to a consensus solution.”

Notably, only one of the Quad – the EU – has endorsed the text. The U.S. is being squeezed on both sides domestically, with GOP lawmakers strongly and repeatedly opposing any version of a TRIPS waiver and, on the other side, progressive lawmakers along with civil society and advocacy groups pushing for a version that is more akin to the original, broadly applied proposal.

In a letter to U.S. Trade Representative Katherine Tai on Monday, more than 150 health, faith and advocacy groups outlined their “deep concern” with the new text, arguing it should be rejected because it does not do anything to waive IP barriers and does not include diagnostics and therapeutics.

In the face of Republican opposition, however, USTR has at least one piece of good news: China during Tuesday’s meeting announced it would not seek to use any of the flexibilities enshrined in the compromise proposal – if language in a footnote excluding countries that exported at least 10 percent of vaccine doses in 2021 is dropped. Republican lawmakers have repeatedly argued that any TRIPS waiver amounts to a “giveaway” of U.S. intellectual property to countries like China – and, more recently, Russia.

“To further demonstrate our pragmatism and constructiveness and to better facilitate the negotiation, China hereby announces that if our concern on the footnote is properly addressed, we will not seek to use the flexibility provided for by this decision,” Beijing said during the meeting, according to a copy of its remarks. “We hope our positive movement could be reciprocated with the same level of pragmatism and flexibility from other major stakeholders.”

The footnote China refers to in the text has two sets of bracketed language, both of which define which countries would be eligible to take advantage of the IP options outlined in the proposal. The first set says all developing members are eligible but urges those with vaccine export capacity to opt out. The second set of brackets excludes those developing members that “exported more than 10 percent of world exports of COVID-19 vaccine doses in 2021.” That requirement would affect only Beijing, according to WTO data on vaccine exports.

Although this language affects only China – in a proposal Beijing says it does not intend to take advantage of – the country argues it sends “a wrong signal.” During last week’s TRIPS Council meeting, China added that such language incentivizes protectionist policies rather than facilitating exports of vaccines, as it should.

China’s announcement was “very, very well-received” by other members, WTO spokesman Keith Rockwell told reporters on Tuesday. 

The proponents of the TRIPS waiver have long pushed for text-based discussions in the TRIPS Council and the new text has “highly elevated” the chances for such a process, Rockwell said. Indeed, both India and South Africa – the original sponsors of the first waiver proposal – said on Tuesday they hoped the new document can be a step toward good-faith, text-based talks.

“I think we should look at the document on its merits and see whether this is something that we can take forward to the stage of negotiation,” TRIPS Council Chair Lansana Gberie, Sierra Leone’s ambassador, said on Tuesday, according to the WTO.

“I think it is important that we reflect on this because it is, frankly, the only product we have, the only game in town,” he added. “We don't have a lot of time.” -- Hannah Monicken (hmonicken at iwnpews.com <mailto:hmonicken at iwnpews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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