mc12 briefing note

Trade and health: WTO response to the COVID-19 pandemic

The COVID-19 pandemic represents an unprecedented disruption to the global economy and world trade, as production and consumption have been impacted across the globe.

Since the pandemic outbreak, WTO members have been working on a holistic approach in formulating a multilateral response to COVID-19 which takes into account the exceptional character of the current crisis — in terms of the loss of human lives and the economic and social challenges — and addresses current and future pandemics.

Discussions facilitated by Ambassador David Walker of New Zealand and Ambassador Dacio Castillo of Honduras highlighted the importance of a meaningful and credible outcome on this issue. Both ambassadors worked closely with members through different configurations in solutions-oriented, text-based discussions.

To this end, members negotiated a framework which would guide the WTO's work and help to render the multilateral trading system more resilient and better prepared for futures crises.

The framework will enable members to better leverage the knowledge generated by the networks established by Director-General Ngozi Okonjo-Iweala to coordinate discussions among relevant international organizations, development agencies, civil society and businesses and to better harness the WTO Secretariat's work in support of the members.

Drawing from three proposals from various delegations and a factual contribution from the Secretariat, members worked on the basis of one single document.

The result was a Ministerial Declaration on the WTO response to the current and future pandemics, which members adopted as part of the outcomes of the 12th Ministerial Conference (MC12).

The Declaration calls on relevant WTO bodies to continue or initiate work on lessons learned and challenges experienced during the COVID-19 pandemic. Areas of focus will include export restrictions, food security, intellectual property, regulatory cooperation, services, tariff classification, technology transfer, trade facilitation, and transparency. A yearly stocktaking exercise will take place in the General Council up to the end of 2024.

In parallel, the Ministerial Decision on the TRIPS Agreement, also adopted by members at MC12, provides a platform for members to work together to diversify vaccine production capacity. Members will have greater scope to take direct action over the next five years to override the exclusive effect of patents through a targeted waiver that addresses specific problems identified during the pandemic, especially facilitating and streamlining vaccine exports. Members also have greater clarity regarding related options open to them for pandemic response, including an array of emergency use measures.

While all developing country members can benefit from the decision, developing country members with existing COVID-19 vaccine manufacturing capacity are encouraged to opt out. The TRIPS Council publishes a record of such binding commitments by members pledging not to avail themselves of this decision.

This outcome also opens the way for technical support from the World Health Organization  (WHO), the World Intellectual Property Organization (WIPO), the WTO and others to make full and effective use of all the options. Members also agreed that, no later than December 2022, they will decide on whether to extend the waiver to cover the production and supply of COVID-19 diagnostics and therapeutics.

DG Okonjo-Iweala said these decisions “will make access to medical supplies and components more predictable in this pandemic, and in the next one.” The TRIPS waiver compromise “will contribute to ongoing efforts to deconcentrate and diversify vaccine manufacturing capacity, so that a crisis in one region does not leave others cut off,” she added.

During the discussions (background below), members recognized and expressed support for the WTO Director-General's contribution to making the WTO part of an integrated global response to the pandemic.

They encouraged continuing and intensifying collaboration with other international organizations through initiatives such as the Multilateral Leaders' Task Force on COVID-19 led by the heads of the International Monetary Fund, World Bank Group, World Health Organization and World Trade Organization.

Recognizing the need to address the COVID-19 crisis through timely, accurate information, the WTO created a dedicated page on its website. It provides up-to-the minute trade-related information including relevant notifications by WTO members, the impact the virus has had on exports and imports and how WTO activities have been affected by the pandemic.

The WTO has also been monitoring COVID-19 related trade-restricting and facilitating measures imposed by the Group of 20 leading economies (G20) as well as the WTO membership as a whole through its biannual trade monitoring reports.

IP waiver background - TRIPS Council

Since October 2020, members tried to seek convergence on how best to use the global intellectual property (IP) system to tackle COVID-19 in the context of the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Discussion started on 15-16 October 2020, when India and South Africa introduced at the TRIPS Council document IP/C/W/669 requesting a waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19.

The proposed waiver would cover obligations in four sections of the TRIPS Agreement — Section 1 on copyright and related rights, Section 4 on industrial designs, Section 5 on patents and Section 7 on the protection of undisclosed information.

On 21 May 2021 the co-sponsors issued a revised proposal which was circulated in document IP/C/W/669/Rev.1 and on 29 September 2021 they circulated a summary of their interventions in document IP/C/W/684.

The proposal was co-sponsored by the African Group, the Plurinational State of Bolivia, Egypt, Eswatini, Fiji, India, Indonesia, Kenya, the LDC Group, Maldives, Mozambique, Mongolia, Namibia, Pakistan, South Africa, Vanuatu, the Bolivarian Republic of Venezuela, Zimbabwe, Argentina, Jordan and Malaysia.

In the course of discussions on the revised waiver proposal, delegations held focused discussions on the topics of scope, both from the perspective of products and of IP rights, on duration, implementation and the protection of undisclosed information.

All delegations remained committed to the common goal of providing timely and secure access to high-quality, safe, efficacious and affordable vaccines and medicines for all, but discussions showed that disagreement persisted on the fundamental question of whether a waiver is the appropriate and most effective way to address the shortage and inequitable distribution of and access to vaccines and other COVID-related products.

In addition, a proposal (IP/C/W/681) for a draft General Council declaration on the TRIPS Agreement and Public Health in the circumstances of a pandemic, issued by the European Union, was also discussed in meetings since its circulation on 21 June 2021.

The European Union proposal, which was backed by other developed country members, calls for limiting export restrictions, supporting the expansion of production, and facilitating the use of current compulsory licensing provisions in the TRIPS Agreement, particularly by clarifying that the requirement to negotiate with the right holder of the vaccine patent does not apply in urgent situations such as a pandemic, among other issues.

While recognizing that intellectual property rights (IPRs) should not stand in the way of deploying and creating capacity, or of ensuring equitable access to vaccines and therapeutics, several developed and developing members cautioned that this can be attained while maintaining IP as the basis for incentivizing investment in innovation, and for licensing technology transfer, so that members can effectively fight new strains of COVID-19 and any future diseases and pandemics.

Some were particularly concerned that waiving IP rights might undermine the existing efforts and arrangements for large scale production of vaccines that rely, in part, on the IP system.

After an impasse of more than one year in the TRIPS Council, WTO Director-General Ngozi Okonjo-Iweala put forward on 3 May 2022 the outcome document that emerged from the informal process conducted with the Quad (the European Union, India, South Africa and the United States) for an intellectual property response to COVID-19.

The proposal was the result of a joint effort by DG Okonjo-Iweala working with Deputy Director-General Anabel González together with an informal group of ministers to bring about what could be a meaningful proposal that could provide a platform to be built upon by the whole membership.

In their discussions, the Quad adopted a problem-solving approach aimed at identifying practical ways of clarifying, streamlining and simplifying how governments can override patent rights, under certain conditions, to enable diversification of production of COVID-19 vaccines.

The text was shared by the chair of the TRIPS Council, Ambassador Lansana Gberie of Sierra Leone, with the full membership, opening the door to the text-based negotiations that resulted  in the agreement reached at MC12.

Non-violation and situation complaints

WTO members agreed in advance of MC12 on a draft ministerial decision on so-called non-violation and situation complaints (NVSCs) in the area of intellectual property (IP). The decision was adopted at MC12.

Under the draft decision, the TRIPS Council was asked to continue its discussions on this issue and to make recommendations to the 13th WTO Ministerial Conference. In the meantime, members would refrain from bringing such cases to the dispute settlement system.

Non-violation and situation complaints refer to whether and under what conditions members should be able to bring WTO dispute complaints where they consider that another member's action, or a particular situation, has deprived them of an expected advantage under the TRIPS Agreement, even though no obligation under the Agreement has been violated.

To date, only a dozen WTO dispute settlement proceedings have been initiated which involve non-violation complaints. None of those non-violation complaints have been successful.

Under Article 64.2 of the TRIPS Agreement, a “moratorium” was established prohibiting non-violation complaints on IP rights for the first five years after the establishment of the WTO (i.e. 1995–99), after which members were to make recommendations to the Ministerial Conference, the WTO's highest decision-making body, for approval. This moratorium has been extended a number of times since, from one Ministerial Conference to the next.

Members have historically differed on whether such non-violation cases are feasible in intellectual property. Some delegations consider non-violation complaints essential to maintaining the proper balance of rights and obligations also within the TRIPS Agreement by helping to ensure that legitimate obligations are not circumvented or avoided. Others believe there is no place for the application of non-violation complaints in intellectual property because of the nature of the TRIPS Agreement and the legal insecurity and curtailment of flexibilities that could ensue, and thus favour their complete ban in the TRIPS area.

The Ministerial Decision on “TRIPS non-violation and situation complaints” adopted at MC12 says:

We take note of the work done by the Council for Trade-Related Aspects of Intellectual Property Rights pursuant to the General Council Decision of 10 December 2019 on "TRIPS Non-Violation and Situation Complaints" (WT/L/1080), and direct it to continue its examination of the scope and modalities for complaints of the types provided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 and make recommendations to the 13th Ministerial Conference. It is agreed that, in the meantime, Members will not initiate such complaints under the TRIPS Agreement.

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