Much has been written about the negotiations and agreements at the recently concluded Ministerial meetings (MC12) of the World Trade Organization (WTO) in Geneva. Truly, however, the expectation was rather low. Gone were the days of Doha Development Round when the global economy was booming and the developing countries hoped to get a fair share of the growing global trade. Twin Towers were hit by Al Qaeda and Washington was desperately in need of global cooperation to wage the war against terrorism. The Doha Development was born. The developed countries even agreed to amend the TRIPS to facilitate compulsory licensing (CL) to combat the raging epidemic of AIDs/HIV in some African countries. The WTO had become a symbol of hope. Sadly, the honeymoon was short-lived.
Development theorists generally take a holistic view of trade and technology interacting and promoting higher levels of economic development. The linking of trade with TRIPS (Trade-Related Intellectual Property System) was a strategic ploy played on hapless developing countries by the advanced countries. The attempt of the developed countries has been to enforce TRIPS as a condition precedent to market access. Within a few years, Doha was moribund. The larger question haunting trade theorists is the sustainability of the TRIPS especially when millions of people across the countries are afflicted with the Covid-19 epidemic and die.
Unfortunately, during the interregnum, the WTO itself was on life support and had become dysfunctional. The US administration under President Donald Trump attacked it for working against American interests. It was the Joe Biden administration that gave new life to the WTO and also facilitated the appointment of Ngozi Oknjo-Iweala, a Nigerian, as itsDirector-General. She formerly headed the GAVI, the Vaccine Alliance. She had thus to prove her commitment to combating the pandemic menace. More importantly, she had to energize the WTO or give it new life. Sadly, for the new D-G, the circumstances were not propitious. Faith in globalisation had faded and was under attack under Trump and other rightist leaders. Along with it, there was the rising tide of protectionism across the countries. On the Covid-19 front, patent or IP nationalism overwhelmed most leaders and policymakers who were keen on safeguarding the lives of their own people even at the cost of other lives. Restrictions were imposed on the export of testing equipment and ingredients required for the manufacture of life-saving drugs. At a time when the world was facing the gravest ever threat of the pandemic, there was no global cooperation. As Prof. Joseph Stiglitz said in a speech at the UN General Assembly, any hope of global cooperation and recovery remained a “fantasy.”
It was in this state of disarray in the WTO and global gloom that the Indian delegation commenced its effort to transform TRIPS into a mechanism to combat the pandemic by a waiver. What India and South Africa wanted was ambitious. It was a waiver of TRIPS obligations to address shortages of products required for the prevention, control and treatment of Covid-19. While tabling this, they seem to have ignored the legacy of TRIPS and the power of the drug companies who had the full support of the richer countries in the EU. Though CL flexibility was allowed, the conditions imposed negated their availability.
India and South Africa tabled the proposed formally on October 2, 2020, to waive TRPS obligations relying on Article IX of the WTO Agreement. The EU, the UK and Switzerland blocked the text-based negotiations. However, by November 2021 a decision became imperative for the successful meeting of the 12th Ministerial Conference. By March, the QUAD grouping came up with a compromise formula and on May 3, 2022, the DG tabled the text for negotiations. It was a shocker. The difference between the original version and the QUAD’s was between cheese and chalk. Every paper drew attention to the vacuity of the watered-down offer. The only concession offered was for the vaccine, not for the ingredients which go into it,or for testing and therapeutics. The Indian delegation seems to have succumbed to the power-play of the EU and drug majors who were ready to seize the global market not only during the pandemic but also in later years when it would afflict humanity as an endemic. In the WTO, GREEN ROOM exchanges are always shrouded in secrecy. Even the appeals of Prof. Stiglitz to our Prime Minister and South African President were of no avail. It is intriguing why India caved in. Apparently, there was no trade-off on other issues such as food security and fisheries.
The tragedy of WTO/MC12 is that developing countries don’t even get the benefit of Compulsory Licensing granted in Doha. Covid-19 is still a puzzle to virologists and pathologists. The vaccine itself is a complex product and contains ingredients that are themselves protected by separate patents. Moreover, over the last two years, there is a global surplus in vaccine production so much so that the limited concession offered by the WEO/MC12 will be of no value to developing countries. Commerce Minister Piyush Goyal may claim to have set and won the battle in the WTO. Developed countries and drug majors will, however, carry their flag by saying, “patents are forever”.
Kandaswami Subramanian
(Served in the Ministry of Finance, GOI, and retired as Joint Secretary)
subrabhama@gmail.com