Rethinking Trade - Season 1 Episode 43: A New U.S. Approach to the WTO? MC12, Part 2

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Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

 

Ryan 

Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Welcome everyone to MC 12 Part Two. In part one, we discuss some of the big issues at stake at the World Trade Organization's 12th ministerial conference, or MC 12, which was scheduled to take place last week in Geneva. However, that meeting was postponed after travel restrictions related to the Omnicon variant of COVID-19. Ironically, many people would consider the number one issue for the WTO to deal with is temporarily suspending intellectual property barriers that are preventing the world from producing more vaccines, tests and treatments for COVID-19. Lori, with the ministerial cancelled, what's the status of the TRIPS waiver, the suspension of the intellectual property barriers, and maybe you could talk about the irony here of the ministerial being postponed for this reason.

Lori Wallach 

There's only one thing the WTO simply must do to help end the pandemic. And in fact, to not be part of the problem of having a permanent pandemic. And that is to get the hell out of the way. So the WTO's intellectual property rules require every country to provide monopoly control for certain pharmaceutical companies over how much COVID-19 vaccine, treatments, testing, diagnostic testing products can be made, where it can be sold, at what price. So this waiver of the agreement on trade related intellectual property or the TRIPS Agreement, some provisions of that is about getting these WTO obstacles to ending the pandemic removed temporarily. And so it's incredibly ironic that the WTO ministerial got shut down. Because for more than a year, the WTO chose obstacles to manufacturing sufficient amounts of vaccine and treatment and testing to be able to not have wildfire-infections across large parts of the world, which is precisely where mutations and variants get hatched. And so you know, if international organizations are subject to karma, then the WTO had this coming, because it's part of the reason why not only hundreds of 1000s of unnecessary deaths have occurred. But why we have cycle after cycle of varients, because, you know, here we are, almost two years in 7% of people in low income countries have gotten vaccinations, Three and a half percent of people in Kenya have gotten vaccinations. In the last couple of months, there have been more people in the United States who have gotten boosters than the total of 10 African countries combined, people have gotten any shots. And this lack of access, the shortage is the reason why variants will keep getting hatched. And there's a chance we don't know yet, there's a chance this particular variant could be the one everyone's scared about that gets around the vaccines, and then we have to start from scratch. So we need to have the waiver of TRIPS so that we can unlock these intellectual property barriers. And in numerous countries where there are qualified manufacturers in the Global South, they can start the process, which is going to take depending on whether they have full technology transfer, if the company's current vaccine monopolists are compelled to share, Madonna's former chief chemist says it's three to six months to get a vaccine line going. If they have to figure it out by reverse engineering some of it, it could be a year or more. But if we don't start now, by unlocking the IP, we're going to be in the same boat in a year from now with whatever the next wave or a variant is with millions more people dead. And it's scandalous. So the only thing that has to happen now, the WTO will figure out when it's going to have its next ministerial. Not relevant to this point, before the WTO decamped for its long Christmas break. They just need to have an online meeting. They don't need a ministerial to do the waiver. They need what's called a general counsel, and a general counsel can be done online as it had been done. During other months of the pandemic, and they just need to enact this waiver and get this show on the road.

Ryan 

And Lori as we got ready to record this episode, and while the rest of the world was waiting for an agreement on the TRIPS waiver, we got word that the WTO had just announced a brand new agreement to limit regulation in the services sector. Can you explain to us what this is about in its substance, but also, what it says about where the priorities are? Right now that this was done while the waiver sat untouched?

Lori Wallach 

Well, first of all, let's just explore why the waivers stuck. There are two big reasons there are 130 countries at the WTO that say they support a waiver, about 70 countries support the waiver, that is a tax, that's a specific written proposal that South African India put forward, the newest revision is from May. There are other countries, including the United States that say they support a waiver. The US so far, and the President reiterated this a week ago, said they support a waiver for vaccines, maybe not for the other medications. The President even said, because of the new variant, we need to do this now. However, the European Union, led by Germany, with the support of the United Kingdom and Switzerland have blocked any progress on a waiver, they are strictly on the side of Big Pharma, protecting these monopoly intellectual property barriers. And that's a serious problem. And there's only one way that is going to be overcome. And that is if the president of United States makes it his business to call up the new incoming Chancellor of Germany, and say, "This has got to end." This is looking terrible for Western democracies. We are seen here as somehow this institution, we say we support the WTO is seen worldwide as an obstacle to ending the pandemic and the European Union is seen as blocking it. And maybe the President wouldn't say this, but what is true is that the US not really leading, either pushing on their close allies, the European Union, the United Kingdom, Switzerland, to get the heck out of the way, or the US really leading the process because, you know, the US says it's for a waiver, but it hasn't gotten down to brass tacks. And for a waiver to be enacted, you got to have a piece of paper that says, "Here are the intellectual property provisions. We all agree we're waiving temporarily, here's how long we're gonna waive them duration wise. And here's what medical products we're gonna waive them with respect to." And so far, the US has really not bellied up to the bar. So there's been a lot of really nice rhetoric, "We support a waiver, we should do it now." But when the rubber hits the road, the US has not put down in any detail what is "the" waiver with support. So it's super stuck. We have 70 countries saying, "Here's a piece of paper we all support." You have the US not saying what they like or don't like about that paper or their suggestions to change it, and the EU basically want to light the paper on fire. And as a result, since May, we have seen no progress on substantive negotiations, or an actual text of a waiver to adopt. And that has to happen in the next couple of weeks. It's not rocket science, there is definitely a landing place. But the US has to step up the leadership and the EU needs to get out of the way. And that's only going to happen basically, if President Biden makes this a priority, and gets our allies shifted and take some leadership on trying to get this text together has to engage. Now, while all of that isn't getting done, somehow what the WTO had time to do was ink, announce and celebrate an agreement limiting environmental and consumer regulation in the service sector, the service sector being transportation, education, retail, everything you can't drop in your foot is basically a service, tourism, etc, banking, financial services. And so this agreement is sort of a very controversial one in that it doesn't involve all of the WTO countries. It's sort of a private little party a handful of countries had, there's a question about whether it's even quite kosher, it may not exactly be legal. And somehow there's been time to finish this agreement that the world's biggest banks and airlines and others have thought was lovely and excited about but there isn't time to actually prioritize and finish the waiver of barriers that are extending a pandemic that's killing millions of people and that is making the entire world suffer economically and health wise; it's pretty damn scandalous. And this sort of gets to what you know, we all have to do, which is that is not okay. That is not okay. That is not where the priority should be. And we basically need to all raise the volume with all of our governments about our demands to in the next couple of weeks before Christmas, just get the damn WTO waiver enacted. It's really doable, but it's gonna take more leadership from the Biden administration.

Ryan 

And you touched on this a little bit. But the TRIPS waiver, part of why it's being held up is because it needs to get a consensus decision. But then why was this agreement on the service sector regulation, why was that only a portion of WTO membership, not the entire organization? Is that the area where it where it may not be a kosher agreement?

Lori Wallach 

So the service sector agreement is being portrayed as a plurilateral agreement, which is to say an agreement that only covers the countries that have agreed to it. And the reason why it's probably not kosher is there is no mechanism to start a plurilateral agreement except by the consensus of all the countries, because even if you don't sign on an agreement that a bunch of other countries that you're in agreement with are in means it's going to change what your circumstances are with respect to some of those countries. So a bunch of countries have been trying to get this particular thing done. And it was not going very far. And a bunch of countries didn't want to do it. And so the countries that wanted to do it sort of used some residual authority from an agreement from 25 years ago, and they were just going to announce they were doing an agreement. In contrast, the waiver is under a particular article, if you want to look online, look up the Marrakesh agreement establishing the World Trade Organization, Article Nine Rowman IX is a waiver. These waivers happen pretty regularly in the General Counsel, by the way, not big WTO ministerios. And that waiver has a certain kind of process, and it's something the whole membership supposed to do. Now, here's the dirty little secret, you can vote on a waiver. It's like the nuclear option because everything gets done at the WTO by consensus so far. But if you pull up that agreement, that Marrakesh agreement establishing the WTO. And you can read the GATT, it basically lays out voting rules supermajority, so it's not simple majority supermajority voting rules for a variety of things, including these waivers. So I guess it's possible if the EU won't get out of the way at some point and the US doesn't engage. If enough other WTO member countries really get desperate and furious enough, I guess they could call a vote. But you know, there's a legal way to do that. And to do a waiver, whether that service sector agreement is one little bit kosher, that really remains to be seen. But whether it's legal or not, it's still damn outrageous as a matter of priority, that, you know, we're in the face of like the zombie apocalypse. And instead of like dealing with that, and in fact, instead of removing an obstacle to dealing with that, which is what the WTO is, instead, there's a discussion about something totally different, that really isn't in the public interest at all. Very infuriating.

Ryan 

There's obviously so much more we could talk about here. And much of that will of course discuss in future episodes, some of it we've discussed in prior episodes. But to wrap up for today, Lori, when will the next ministerial be held? Because it's just been postponed? Is it in discussion? And what will or could happen between now and then we've already mentioned that we don't need a ministerial to get the waiver. So what are the next opportunities for this to happen?

Lori Wallach 

So probably what could happen is that the sponsors of the waiver, South Africa and India at some point may just literally call for a special session of the WTO as general counsel and ask for countries to get together make this a priority and get the waiver done. And we would certainly support that happening. All the other stuff that was supposed to happen at the ministerial and some of it is contentious. That's all business that will or won't get done at the next ministerial or will or won't get done between the ministerials. There was an attempt to set the ministerial for a new date in March. The countries could not agree on that some countries had concerns that it wouldn't be clear enough yet whether it was safe to be together and what the travel situation would be. So there is no new ministerial date, which is why it makes it so important to get the waiver done before the WTO leaves for Christmas holiday. And that really is the number one priority, if you care about ending the pandemic, the waiver has to get done at the WTO which can be done by an online meeting before Christmas break.

Ryan 

Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 42: MC12, Part 1: Danger and Opportunity at the 12th WTO Ministerial

 

LINKS:

MC12 Global Call to Action

3 Million TRIPS Petitions Delivered to President Biden

Senators Sanders, Warren, Baldwin and Brown call on Biden to Push for TRIPS Waiver at MC12

Reuters: Activists Urge Biden to Push for Intellectual Property Waiver for COVID-19 Vaccines

Big Tech’s “Digital Trade” Trojan Horse Strategy

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Music: Groove Grove by Kevin MacLeod.

 

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan 

Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in house trade expert, Lori Wallach. Last week, we discussed US Trade Representative Katherine Tai's recent comments on the World Trade Organization and the need for some big changes to take place there. Well, the WTO is having its 12th ministerial at the end of the month in Geneva, Switzerland. And there will or will not be some big things on the agenda. Lori, why don't you tell us first what a WTO ministerial is what happens there and why you appreciate that this specific one is scheduled to start on November 30, of all dates.

Lori Wallach 

So the WTO, the World Trade Organization, that global commerce body that replaced the GATT, the General Agreement on Tariffs and Trade, has a governing structure that involves a typically every two years big confab of the trade ministers, the politically appointed people. So in the US, it's the United States trade representative who's currently Katherine Tai. The actual part of the government, not the career staff, the professional staff who go between governments but the political people come together at a WTO ministerial. And in what is called the Marrakesh agreement, which established the WTO in 1995. The governing rules are set such that this Ministerial Conference, because that's what's officially called the Ministerial Conference. And this is the 12th one. So shorthand will be MC 12 is when the forward agenda of the organization is determined for the next several years, where important decisions are made the really high-level political decisions are made. And it's auspicious that it happens to be on N30 November 30. Because the mother of all WTO ministerial was probably was the one in Seattle in 1999. And the call to action for what became a huge protest that shut down that ministerial and in partnership with a lot of developing country negotiators on the inside saying no-way no-how to WTO expansion ended up derailing. What was planned to be a huge increase in the WTO is corporate rigging and powers meddling behind borders and non-trade stuff. So the action alert that year that Public Citizen sent out the beginning of online organizing was mark the day N30.  Exclamation point. And N30 has become a really rallying cry for global justice, trade justice activist because that was a day activism really changed the world at the WTO.

Ryan 

And so this episode is our precursor to the 12th WTO ministerial. So we're going to talk about a few of the major items. The elephant in the room is of course, the trips waiver. And the fact that this ministerial is happening at a time when many countries in the Global South have yet to break out of single figure vaccination rates, due in part to monopolies on COVID drugs. Lori remind our listeners what the trips waiver is, and what's at stake for it at this ministerial. And then maybe what are some of the things to look out for in terms of the outcomes? .

Lori Wallach 

So TRIPS is trade related intellectual property, it's one of the agreements that got hatched with the WTO. Before this WTO took over from the GATT the trade agreement, the global trade agreement dealt with trade. Instead, with the WTO, a lot of different corporate interests rigged all kinds of rules that basically got them new rights and privileges, and that constrain governments from acting in the public interest. And probably exhibit number one of that is the agreement called TRIPS, which yes, in a Free Trade Agreement requires 20 year monopolies on patents and copyrights and industrial designs. And the pharmaceutical industry, pharmaceutical corporations were mainly behind doing this because what they ended up doing is imposing worldwide obligations and every government that's in the WTO that you had to have these big long monopolies. And a lot of developing countries didn't, the US didn't have that kind of monopoly intellectual property protection system. Until we were very much developed country, we were basically borrowing technology from Europe. And so this sort of imposition of one size fits all rules, the TRIPS agreements is seen as one of the most nefarious because, you know, covers medicine. It covers seeds. So it's like, are you going to live and die or you're going to eat. And the TRIPS Agreement waiver is a proposal put forward initially by South African India that now has almost 70 official written co-sponsors, 100 countries supporting a waiver of the WTO trips, agreement monopoly rules, because those rules guaranteeing pharmaceutical corporations have monopoly control over how much COVID vaccines are made, and where they can be sold, how much of the new treatments that are, couldn't save lives are going to be made how much of the tests in this kind of incredible global pandemic disaster. This is when you use what is called the waiver mechanism. So when the WTO was hatched, it has what's called the Article Nine, that's the Roman numbers, so IX, that's Article Nine of the agreement, establishing the WTO allows for waivers of any WTO rule. So South African India basically said, "We're facing this catastrophe, we have to make sure we can get enough vaccines and treatments and we have to do it right away. And there are a lot of qualified producers. Let's have a temporary waiver of these rules until we get the COVID pandemic under control." The US came out in support of it Joe Biden reverse Donald Trump in May, which is great live other countries saw the US do that there were very few that were against, but the ones that were mainly rich countries, join the US in support of a waiver. And at this moment, we're like a week before the start of the WTO ministerial, the European Union, on behest of Germany is blocking the whole rest of the world and saying,"Nope, we're gonna stand for the pharmaceutical corporations and keep these monopolies." So the TRIPS waiver is a big honkin deal. And it would be obscene. If there wasn't an agreement. After a year since it was introduced. It was first introduced in October of 2020. If there wasn't a deal at this big wig, WTO ministerial, how what would be the reason to have a WTO ministerial except to get the WTO out of the way of stopping the pandemic. And more than 100 countries agree though, way to do that is to waive these monopoly rights that are basically prolonging the pandemic. And making it such that qualified producers cannot be making these medicines to help save lives. Will it happen though? A lot of that's been independent, all the activism, the action, the pressure, the EU is going to have to break their allegiance with pharma enjoying the rest of the world. And the Biden administration is going to have to step up and basically lead to get the EU out of the way and to bring this over the finish line with South Africa and India. It really is the only thing the WTO should be doing this ministerial.

Ryan 

And if you look in the summary of this episode, you'll see some links for the global days of action and some other context in factsheets about the trips waiver campaign. So Lori, if TRIPS, you know if TRIPS is a good example of what Big Pharma can do when they get their hands on trade rules. Let's talk about something we also talked about in a recent episode, which is so called digital trade rules, and how big tech firms are pushing and utilizing trade rules to extend their own monopoly powers. Can you talk about the state of digital trade rules at the WTO and what the big tech firms are pushing for in terms of global trade rules?

Lori Wallach 

So in the department of learning from history, the notion that there would be a trips waiver at this ministerial after in that famous infamous one in 1999 in Seattle, there wasn't a waiver then for medicine for HIV AIDS. And millions of people in Africa died. Thanks the two year delay until finally some action was taken in 2001 at the WTO. Well, in that same horrible category of not learning. It turns out that what Big Pharma pulled off monopoly protections in the so called free trade agreements. Right now big tech is trying to take page right out of Big Pharma has handbook and as we've discussed on this podcast before, they have branded as quote unquote, digital trade, basically a set of handcuffs, policy-handcuffs, they want to put on governments not to regulate against big tech abuses. And they have a bunch of rules are sort of anti anti trust, which is to say pro monopoly rules. So all the things that big tech is doing to abuse us as consumers, our privacy, us as human beings, all the algorithm discrimination, online surveillance, as well all of the ways in which they are directly hurting people, sales of unfair products, abusive working conditions, or the outrageous gig economy abuses. All of that stuff, governments around the world, some much more advanced than the US in this work have been creating policies to try and break up those behemoths and to get them to behave. And the US Congress is stepping up right now to do the same. So these firms are desperately trying to use the WTO, to set down rules to make it impossible for that stuff to happen. And so what is happening at this ministerial? To date, the big tech firms have not been able to get an official launch of official WTO negotiations to set up global rules that they want. So they've started sort of a side gig. And that is called the joint statement initiative on e-commerce. Could it be more arcane, so you have no damn idea that you're basically being held up? People in Geneva, talk about an e-commerce JSI sounds totally boring. But what it means is basically letting big tech screw the world. And so these rules are not completed. But the mission that big tech house for this particular ministerial is to sort of get them made kosher, which is to say they want them to be brought into the process, they want them to be officially recognized. And given this is supposed to be a body where the only thing that happens is the thing that the members of the organization, the countries agreed to as sovereign nations, this should not be happening, as countries said no. Yep, the negotiations have gone forward. And there are 80 countries no rump group of 164 WTO countries who've been just on their own like, "Well, we'll just pretend we have the authority. Let's write some rules." And so the big issue is whether this ministerial will issue and kind of a statement that somehow invites out rump operation right into the WTO.

Ryan 

And so Lori, having gone through those two kind of big items, what are some of the other items that are going to be discussed at the WTO that US and other you know, folks in our network coalition partners, we'll be tracking? And then maybe you can just take us out for this episode, because we're gonna have a part two, after the ministerial where we'll be talking about what actually happened.

Lori Wallach 

So some big union federation's like Public Services International have called for this whole ministerial to be postponed. And their logic which makes a lot of sense is if there isn't guaranteed to be a deal waiving the TRIPS, intellectual property barriers, to getting vaccines and treatments against COVID around the world, then why the hell would you even be coming to Geneva at this point, to have a negotiation because all the other things that might be on the agenda are bad news for working people, for consumers, for the planet. And amongst those other bad news, things besides the digital trade, so-called digital trade negotiations, are negotiations around what is called, again, seems really benign, but it's not: domestic regulation of services. And what that is about is basically setting up strictures limits, and how the government's though the members of the WTO, almost all the governments in the world 164 countries are not allowed to regulate services. So what's a service? It's everything you can't drop in your foot. So it's education, its retail, its transportation, it is energy, it is a whole set of, you know, sort of office and insurance and banking, and you name it, basically, it's probably a service and was literally physically, it is a product. So limiting regulation on those things has huge implications for climate, for workers, for consumers, for our economy. And this is an effort by a lot of big multinational corporations united together, so big oil, plus Wall Street, plus, plus, plus, they've all gotten together to try and get agreement on those limits. Then there's an agreement on what's called investment facilitation. But that's kind of a sideways way to try and get new foreign investor protections into the WTO. Just at the point that around the world, the investor state dispute settlement system ISDS is in ill repute and countries are backing out of it. This is an effort by the mining and oil companies that multinationals that want these rights to try and sneak back ways into putting these rules back in order through the WTO. And then there are some negotiations that aren't happening, which is really outraged a lot of developing countries, including those on food security and development issues. So you understand why some of the big international organizations have said unless it's TRIPS waiver time, this dang thing shouldn't happen at all because nothing else but badness is on the agenda. And that is what we will leave off because in a short matter of two weeks we will be on the other side of this ministerial and we're going to know if the good things happened, if the bad things happened or if it got postponed.

Ryan 

Rethinking Trade is produced by Public Citizens Global Trade Watch. To learn more you can visit Rethinktrade.org. You can also visit Tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 42: A New U.S. Approach to the WTO?MC12, Part 1: Danger and Opportunity at the 12th WTO Ministerial

Will the WTO get out of the way of global production of COVID-19 vaccines and meds so we can end this pandemic? Whether Big Pharma or humankind will win is the biggest question as the WTO’s major biennial ministerial meeting starts the Tuesday after Thanksgiving.  But Big Tech also has a play…

More than 120 countries support waiving some of the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) rules that are limiting production of COVID-19 vaccines, treatments and diagnostic tests. But the European Union, UK and Switzerland are blocking. A waiver won't happen without more leadership from the Biden administration.

With all this as a backdrop, Big Tech corporations are also vying for influence at MC12, urging the body to push so-called “digital trade” proposal that would close domestic policy space on issues of great importance, including gig economy worker protections, discrimination and algorithm transparency, competition policy and anti-trust, corporate liability, and consumer privacy. Big Tech wants the WTO to formalize what have been rump talks in violation of its own rules.

The stakes could not be higher for the WTO or for the world: Failure to enact a waiver will prolong the pandemic, leading to more death, illness, economic hardship, and social and political disruption. And rushing through a “Trojan Horse” set of “digital trade” rules will only further erode democracy worldwide.

LINKS:

MC12 Global Call to Action

3 Million TRIPS Petitions Delivered to President Biden

Senators Sanders, Warren, Baldwin and Brown call on Biden to Push for TRIPS Waiver at MC12

Reuters: Activists Urge Biden to Push for Intellectual Property Waiver for COVID-19 Vaccines

Big Tech’s “Digital Trade” Trojan Horse Strategy

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Music: Groove Grove by Kevin MacLeod.

 

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan 

Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in house trade expert, Lori Wallach. Last week, we discussed US Trade Representative Katherine Tai's recent comments on the World Trade Organization and the need for some big changes to take place there. Well, the WTO is having its 12th ministerial at the end of the month in Geneva, Switzerland. And there will or will not be some big things on the agenda. Lori, why don't you tell us first what a WTO ministerial is what happens there and why you appreciate that this specific one is scheduled to start on November 30, of all dates.

Lori Wallach 

So the WTO, the World Trade Organization, that global commerce body that replaced the GATT, the General Agreement on Tariffs and Trade, has a governing structure that involves a typically every two years big confab of the trade ministers, the politically appointed people. So in the US, it's the United States trade representative who's currently Katherine Tai. The actual part of the government, not the career staff, the professional staff who go between governments but the political people come together at a WTO ministerial. And in what is called the Marrakesh agreement, which established the WTO in 1995. The governing rules are set such that this Ministerial Conference, because that's what's officially called the Ministerial Conference. And this is the 12th one. So shorthand will be MC 12 is when the forward agenda of the organization is determined for the next several years, where important decisions are made the really high-level political decisions are made. And it's auspicious that it happens to be on N30 November 30. Because the mother of all WTO ministerial was probably was the one in Seattle in 1999. And the call to action for what became a huge protest that shut down that ministerial and in partnership with a lot of developing country negotiators on the inside saying no-way no-how to WTO expansion ended up derailing. What was planned to be a huge increase in the WTO is corporate rigging and powers meddling behind borders and non-trade stuff. So the action alert that year that Public Citizen sent out the beginning of online organizing was mark the day N30.  Exclamation point. And N30 has become a really rallying cry for global justice, trade justice activist because that was a day activism really changed the world at the WTO.

Ryan 

And so this episode is our precursor to the 12th WTO ministerial. So we're going to talk about a few of the major items. The elephant in the room is of course, the trips waiver. And the fact that this ministerial is happening at a time when many countries in the Global South have yet to break out of single figure vaccination rates, due in part to monopolies on COVID drugs. Lori remind our listeners what the trips waiver is, and what's at stake for it at this ministerial. And then maybe what are some of the things to look out for in terms of the outcomes? .

Lori Wallach 

So TRIPS is trade related intellectual property, it's one of the agreements that got hatched with the WTO. Before this WTO took over from the GATT the trade agreement, the global trade agreement dealt with trade. Instead, with the WTO, a lot of different corporate interests rigged all kinds of rules that basically got them new rights and privileges, and that constrain governments from acting in the public interest. And probably exhibit number one of that is the agreement called TRIPS, which yes, in a Free Trade Agreement requires 20 year monopolies on patents and copyrights and industrial designs. And the pharmaceutical industry, pharmaceutical corporations were mainly behind doing this because what they ended up doing is imposing worldwide obligations and every government that's in the WTO that you had to have these big long monopolies. And a lot of developing countries didn't, the US didn't have that kind of monopoly intellectual property protection system. Until we were very much developed country, we were basically borrowing technology from Europe. And so this sort of imposition of one size fits all rules, the TRIPS agreements is seen as one of the most nefarious because, you know, covers medicine. It covers seeds. So it's like, are you going to live and die or you're going to eat. And the TRIPS Agreement waiver is a proposal put forward initially by South African India that now has almost 70 official written co-sponsors, 100 countries supporting a waiver of the WTO trips, agreement monopoly rules, because those rules guaranteeing pharmaceutical corporations have monopoly control over how much COVID vaccines are made, and where they can be sold, how much of the new treatments that are, couldn't save lives are going to be made how much of the tests in this kind of incredible global pandemic disaster. This is when you use what is called the waiver mechanism. So when the WTO was hatched, it has what's called the Article Nine, that's the Roman numbers, so IX, that's Article Nine of the agreement, establishing the WTO allows for waivers of any WTO rule. So South African India basically said, "We're facing this catastrophe, we have to make sure we can get enough vaccines and treatments and we have to do it right away. And there are a lot of qualified producers. Let's have a temporary waiver of these rules until we get the COVID pandemic under control." The US came out in support of it Joe Biden reverse Donald Trump in May, which is great live other countries saw the US do that there were very few that were against, but the ones that were mainly rich countries, join the US in support of a waiver. And at this moment, we're like a week before the start of the WTO ministerial, the European Union, on behest of Germany is blocking the whole rest of the world and saying,"Nope, we're gonna stand for the pharmaceutical corporations and keep these monopolies." So the TRIPS waiver is a big honkin deal. And it would be obscene. If there wasn't an agreement. After a year since it was introduced. It was first introduced in October of 2020. If there wasn't a deal at this big wig, WTO ministerial, how what would be the reason to have a WTO ministerial except to get the WTO out of the way of stopping the pandemic. And more than 100 countries agree though, way to do that is to waive these monopoly rights that are basically prolonging the pandemic. And making it such that qualified producers cannot be making these medicines to help save lives. Will it happen though? A lot of that's been independent, all the activism, the action, the pressure, the EU is going to have to break their allegiance with pharma enjoying the rest of the world. And the Biden administration is going to have to step up and basically lead to get the EU out of the way and to bring this over the finish line with South Africa and India. It really is the only thing the WTO should be doing this ministerial.

Ryan 

And if you look in the summary of this episode, you'll see some links for the global days of action and some other context in factsheets about the trips waiver campaign. So Lori, if TRIPS, you know if TRIPS is a good example of what Big Pharma can do when they get their hands on trade rules. Let's talk about something we also talked about in a recent episode, which is so called digital trade rules, and how big tech firms are pushing and utilizing trade rules to extend their own monopoly powers. Can you talk about the state of digital trade rules at the WTO and what the big tech firms are pushing for in terms of global trade rules?

Lori Wallach 

So in the department of learning from history, the notion that there would be a trips waiver at this ministerial after in that famous infamous one in 1999 in Seattle, there wasn't a waiver then for medicine for HIV AIDS. And millions of people in Africa died. Thanks the two year delay until finally some action was taken in 2001 at the WTO. Well, in that same horrible category of not learning. It turns out that what Big Pharma pulled off monopoly protections in the so called free trade agreements. Right now big tech is trying to take page right out of Big Pharma has handbook and as we've discussed on this podcast before, they have branded as quote unquote, digital trade, basically a set of handcuffs, policy-handcuffs, they want to put on governments not to regulate against big tech abuses. And they have a bunch of rules are sort of anti anti trust, which is to say pro monopoly rules. So all the things that big tech is doing to abuse us as consumers, our privacy, us as human beings, all the algorithm discrimination, online surveillance, as well all of the ways in which they are directly hurting people, sales of unfair products, abusive working conditions, or the outrageous gig economy abuses. All of that stuff, governments around the world, some much more advanced than the US in this work have been creating policies to try and break up those behemoths and to get them to behave. And the US Congress is stepping up right now to do the same. So these firms are desperately trying to use the WTO, to set down rules to make it impossible for that stuff to happen. And so what is happening at this ministerial? To date, the big tech firms have not been able to get an official launch of official WTO negotiations to set up global rules that they want. So they've started sort of a side gig. And that is called the joint statement initiative on e-commerce. Could it be more arcane, so you have no damn idea that you're basically being held up? People in Geneva, talk about an e-commerce JSI sounds totally boring. But what it means is basically letting big tech screw the world. And so these rules are not completed. But the mission that big tech house for this particular ministerial is to sort of get them made kosher, which is to say they want them to be brought into the process, they want them to be officially recognized. And given this is supposed to be a body where the only thing that happens is the thing that the members of the organization, the countries agreed to as sovereign nations, this should not be happening, as countries said no. Yep, the negotiations have gone forward. And there are 80 countries no rump group of 164 WTO countries who've been just on their own like, "Well, we'll just pretend we have the authority. Let's write some rules." And so the big issue is whether this ministerial will issue and kind of a statement that somehow invites out rump operation right into the WTO.

Ryan 

And so Lori, having gone through those two kind of big items, what are some of the other items that are going to be discussed at the WTO that US and other you know, folks in our network coalition partners, we'll be tracking? And then maybe you can just take us out for this episode, because we're gonna have a part two, after the ministerial where we'll be talking about what actually happened.

Lori Wallach 

So some big union federation's like Public Services International have called for this whole ministerial to be postponed. And their logic which makes a lot of sense is if there isn't guaranteed to be a deal waiving the TRIPS, intellectual property barriers, to getting vaccines and treatments against COVID around the world, then why the hell would you even be coming to Geneva at this point, to have a negotiation because all the other things that might be on the agenda are bad news for working people, for consumers, for the planet. And amongst those other bad news, things besides the digital trade, so-called digital trade negotiations, are negotiations around what is called, again, seems really benign, but it's not: domestic regulation of services. And what that is about is basically setting up strictures limits, and how the government's though the members of the WTO, almost all the governments in the world 164 countries are not allowed to regulate services. So what's a service? It's everything you can't drop in your foot. So it's education, its retail, its transportation, it is energy, it is a whole set of, you know, sort of office and insurance and banking, and you name it, basically, it's probably a service and was literally physically, it is a product. So limiting regulation on those things has huge implications for climate, for workers, for consumers, for our economy. And this is an effort by a lot of big multinational corporations united together, so big oil, plus Wall Street, plus, plus, plus, they've all gotten together to try and get agreement on those limits. Then there's an agreement on what's called investment facilitation. But that's kind of a sideways way to try and get new foreign investor protections into the WTO. Just at the point that around the world, the investor state dispute settlement system ISDS is in ill repute and countries are backing out of it. This is an effort by the mining and oil companies that multinationals that want these rights to try and sneak back ways into putting these rules back in order through the WTO. And then there are some negotiations that aren't happening, which is really outraged a lot of developing countries, including those on food security and development issues. So you understand why some of the big international organizations have said unless it's TRIPS waiver time, this dang thing shouldn't happen at all because nothing else but badness is on the agenda. And that is what we will leave off because in a short matter of two weeks we will be on the other side of this ministerial and we're going to know if the good things happened, if the bad things happened or if it got postponed.

Ryan 

Rethinking Trade is produced by Public Citizens Global Trade Watch. To learn more you can visit Rethinktrade.org. You can also visit Tradewatch.org. Stay tuned for more and thank you for listening.

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Apple and Google Want U.S. Trade Officials to Attack Anti-Monopoly Law

[Reposted from PC News]

By: Karolina Mackiewicz

Tech giants Google and Apple are urging U.S. government officials to attack a pro-consumer policy by South Korea as an “illegal trade barrier,” even as the U.S. Congress is poised to pass similar legislation to break up app store monopolies.

The new Korean law would require app stores to allow consumers to use diverse payment systems, not only those controlled by the app store’s home platform. And it forbids the platforms from the current practice of banning app developers from listing on multiple platforms’ app stores.

Google and Apple claim that this law, instead of an anti-monopoly initiative that the U.S. Congress is also considering, is somehow an illegal trade barrier and perhaps even a violation of a free trade agreement between the U.S. and Korea. As flimsy as this claim is, it is a preview of coming attractions of the newest and latest corporate sneak attack via trade agreement.

From the translation of the amendments obtained by Public Citizen, it is clear the requirements apply to all app stores, regardless of the “nationality” of the company. In a letter to U.S. Trade Representative Katherine Tai, Public Citizen experts conclude that the amendments are not discriminatory. Such measures are typical of antitrust laws and competition policies around the world. The fact that the Korean policy could particularly affect American businesses is due exclusively to those businesses’ dominant market position, not because Korea is discriminating against U.S. firms, much less violating trade obligations.

“If the U.S. starts this fight on a nondiscriminatory policy because some U.S. companies don’t like it, then when we have a regulation here that impacts some other country’s platform that is neutral, but it happens to impact them because they’re a big player in the U.S., then that country will come after us,” said Public Citizen's Global Trade Watch Director Lori Wallach in the latest episode of the Rethinking Trade podcast. “It creates a circular firing squad attacking consumer policies so the only winners are a handful of mega big tech platforms.”

Public Citizen urged U.S. trade officials to refrain from criticizing the Korean law and to beware of Big Tech’s larger strategy to avert digital governance.

Big Tech interests’ latest ploy is to hijack trade negotiating venues to lock in binding international rules that limit governments from regulating online platforms in the public interest and from fighting corporate concentration and monopoly power. These interests seek to quicky establish international agreements that quietly undermine regulatory efforts in Congress and U.S. agencies. To obscure this, they have misbranded their attack against the very notion of digital governance as “e-commerce” or “digital trade” policy initiatives.

This is a multi-front effort that includes what is formally called the World Trade Organization (WTO) “Joint Statement Initiative on E-Commerce” negotiations now underway in Geneva among 80-plus countries, a plurilateral Pacific Rim “Digital Economic Partnership Agreement” (DEPA) and various bilateral negotiations.

The Big Tech strategy replicates pharmaceutical firms’ 1990s maneuver of hijacking “free trade” agreements and inserting provisions that require signatory countries to provide the corporations extended monopoly protections and limit policies that lower drug prices.

“These corporate-rigged international agreements end up becoming Trojan horse platforms, where non-trade agendas that are not able to get through the sunshine of public debate and voting in legislative bodies end up getting implemented through the backdoor of a so-called trade deal,” said Wallach.

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Rethinking Trade - Season 1 Episode 41: A New U.S. Approach to the WTO?

U.S. Trade Representative, Katherine Tai’s recent speech about the World Trade Organization was shocking. Why? Because she openly and frankly discussed the yawning gap between the WTO’s expansive rules and what is right and good for people and the planet. And she made clear that the rules of the global commerce agency need a major redo.

That sort of tough love may be the last chance for the WTO, which has suffered a deepening legitimacy crisis for decades. Today WTO intellectual property barriers empower a few pharmaceutical corporations to limit how much vaccine is made, prolonging the pandemic.

In this episode we unpack USTR Tai’s recent comments and what they mean for the future of the WTO.

Learn more: www.tradewatch.org

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Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

 

Ryan 

Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Today, we're going to be talking about a recent speech from United States Trade Representative Katherine Tai about US trade policy and the World Trade Organization. Lori before we get too far into the show, maybe you can just summarize for our listeners, what the WTO is, and a bit about the history of calls for significant changes to be made at the WTO.

Lori Wallach 

So the WTO is the World Trade Organization. And it is a body that replaced a thing called the General Agreement on Tariffs and Trade, which was the post World War II body that basically set the rules of border taxes, tariffs and quotas, how much stuff that come in. Unlike the old GATT, the general agreement, tariffs and trade the WTO broke all the boundaries of what has ever been in a trade agreement and imposed one size fits all on the whole world obligations that countries owe to corporations like extended monopoly protections for pharmaceutical corporations, which right now is making the WTO an obstacle to ending the pandemic, or requirements that you can't regulate service sector companies healthcare or transportation, or banks, for instance, how big they are, or whether they are protecting consumers. And it's set up rules that even set limits and how we can spend our tax dollars as governments. Really invasive and behind the borders policymaking. And the key requirements of the WTO is a provision that requires all signatory countries to, "ensure compliance of domestic laws, regulations, and administrative procedures," with all of the WTO is non-trade rules, so it basically sets a ceiling imposed by corporations and what our democratically elected governments can do on a whole bunch of stuff unrelated to trade. The WTO has been suffering from a crisis of legitimacy almost from when it was hatched because its very establishment was opposed by many of the developing countries that are members of it. And the US and European Union basically cooked a deal. And it came into effect in 1995, replacing the old GATT, and ever since there have been efforts by the corporate world and by some governments to expand its powers even more. And people famously remember the Battle in Seattle, the 1999 WTO ministerial in Seattle, where basically the developing countries stood up and said, " No. We are not expanding this further. We need to fix the existing rules." The WTO has never really recovered from its crisis of legitimacy. And then over the last 10 years or so it's dispute panels because it strongly enforces all these extreme rules. Its dispute panels started pushing out even further and further and kind of making up new laws given the negotiations were jammed, until ultimately, first the Obama administration then the Trump administration said this crap has to stop. And ultimately the Trump administration basically put that enforcement system out of business by not appointing new judges. And at this big speech on the WTO just recently, the new US Trade Representative Katherine Tai for the binding ministration basically said, yeah, big reforms are needed before we want this thing back in operation.

Ryan 

So I just wanted to play a quote from that speech, Lori from USTR Tai's, recent speech at the Graduate Institute, the Geneva trade platform, and then I was hoping to get your thoughts on it. Here's the quote.

USTR Kathrine Tai 

"For some time, there's been a growing sense that the conversations in places like Geneva are not grounded in the lived experiences of working people. For years, we have seen protests outside WTO ministerial conferences, about issues like workers' rights, job loss, environmental degradation, and climate change, as tensions around globalization have increased. We all know that trade is essential to a functioning global economy. But we must ask ourselves, how do we improve trade rules to protect our planet and address widening inequality and increasing economic insecurity? Today I want to discuss the United States vision for how we can work together to make the WTO relevant to the needs of regular people."

Ryan 

Lori, how significant is this quote coming from the United States Trade Representative? And what does it say about the potential future of US trade policy?

Lori Wallach 

It's a really big deal. And the reason it's so significant coming from the US is historically things like that might have been said from activists from scholars like Nobel Prize-winning economist Joe Stiglitz, from developing countries. But it's a really strong leadership development to have the US Trade Representative admitting that there are problems and in fact leading that there are problems, and then committing to try and do something about it. It's amazing.

Ryan 

I also I just want to play another quote as well. This one is maybe a little bit more in the weeds. Here's the quote:

USTR Kathrine Tai 

"Over the past quarter-century, WTO members have also discovered that they can get around the hard part of diplomacy and negotiation by securing new rules through litigation. Dispute Settlement was never intended to supplant negotiations. The reform of these two core WTO functions is intimately linked."

Ryan 

Can you speak a bit about this dispute settlement mess at the WTO? And what reforming it could look like?

Lori Wallach 

So this is the thing I was talking about, where because the agenda at negotiations is always more WTO power for corporations to set the rules on non-trade stuff, the negotiating agenda is just broken down. And so these tribunals who are the enforcement tribunals who can impose huge billion-dollar sanctions for countries to get nailed by trade sanctions unless and until they change their domestic laws to meet these WTO dictates. That system has been put out of business for three years because the US refused to appoint more appellate body judges. So they don't have a quorum, so they can't literally impose these sanctions. And what USTR Tai said, basically, was that because the way that the WTO enforcement system has played out a lot of countries instead of talking to each other at the WTO, or trying to negotiate settlements that are mutually agreeable, have started to basically try and use the litigation, the enforcement system to get their way. And that's not what it was supposed to be about. And that's actually something both sort of defenders of the current WTO rules will say, and those who think that they need to be majorly replaced. So the reform that she's talking about basically is linking both pieces, which is that the actual enforcement mechanism, the dispute settlement system needs major redo. But also she's making the exactly spot on right point, that the substantive rules also need to be updated, replaced, fixed, and that you're not going to end up with one without the other. No one wants to see strong enforcement of bad rules. If there isn't a way for countries to talk to each other and resolve their issues diplomatically, then you're not going to have successful negotiations to get the rules that deserve strong enforcement. So it is exactly the right way to be thinking about what the WTO fix agenda needs to be. And a lot of civil society groups have been taking sort of, I would say, you know, more robust, even wider position on that for some time. They talk about they don't want a new round of WTO expansion, but they want to turn around fixes to the existing rules. So again, it's super powerful that you have a US leading trade official, basically saying that both the process of enforcement and the underlying rules need to be reviewed. And I think she probably say fixed or reformed, civil society would say replaced, but at least everyone's heading the same direction, which has not been the case for the US. Typically US is going in one direction and civil society is going to another. So it's pretty hopeful and a lot of work to do but pretty hopeful that that's the perspective.

Ryan 

And Lori, what did USTR Tai say in this recent speech regarding the WTO TRIPS waiver, which our listeners are probably familiar with at this point, is there any movement on the waiver either at the WTO or from the USTR office?

Lori Wallach 

Well, this is kind of a catch-22. Because at this point, the whole world is looking at the WTO and is seeing it as an obstacle to ending the pandemic. The WTO is, again, not about trade, intellectual property rules are reaching behind borders requiring 164 WTO members to guarantee monopoly control by a handful of pharmaceutical companies over how much and where vaccines for COVID-19 treatments, diagnostic tests are made, and where they're sold. And that is obviously fueling the continuing outbreaks needless deaths, economic chaos, we're just no place close, we just have an absolute shortage in the supply. The current vaccine makers and their monopolies will not deliver what the world needs. And until these WTO rules get out of the way, the whole world that's looking at this is right, the WTO is an obstacle. It's not only not part of the solution of one of the biggest challenges facing humanity, it is basically at this moment, the biggest obstacle. So with that in mind, actually, the speech did not focus on, in a sort of pragmatic sense, how the WTO is intellectual property barriers are going to be gotten out of the way. But if they're not, that could be sort of the final nail on WTO his coffin. I mean, the organization is sort of hanging by thread. Its negotiating system has failed to work forever. The member countries are in deep disagreement about what the substance of the role should be. But clearly, they're extremely outdated and have become an obstacle not just to stopping the pandemic, but to surviving climate crisis, etc. And in the face of an existing near-fatal legitimacy crisis. If the WTO after a year, because it was October 2020, that countries proposed temporarily waiving these WTO corporate pharmaceutical monopoly rules. If the WTO can't even get out of the way of this huge pandemic counter fight, basically, its lash read of potential usefulness or legitimacy could just be totally trashed. So institutionally, the WTO needs to deliver a waiver. And USTR Tai's speech basically said, there needs to be more work, we need to have an outcome. But you know, it's not looking super auspicious. I mean, we were one month out of the WTO ministerial, which certainly isn't you don't have to go to a ministerial to do this waiver of the WTO, Trade Related Intellectual Property or TRIPS rules, you can do that at any meeting of the general basically body, which is called the General Council. But this ministerial was certainly was the far out deadline that the head of the WTO, the director-general set by which this ought to get done. And it's, you know, it's not getting done. It's in part, because the European Union on behalf of Germany is blocking it. But also the US has a very strong hand to play, that has not been played to lead forward, I think the EU would get out of the way. Because at this point, there are 130 countries that support a waiver. And you have a handful of countries that oppose: Germany, the UK, Switzerland, and they've got a couple that are just missing an action. So I think between now and the November 30, meeting of the WTO Ministerial Conference, part of the fate of the WTO is going to be sealed. And to the extent that the Biden administration is key in getting these changes done, I think we all need to be focused on how we can help make sure it happens. And part of that certainly is talking to members of Congress if you run into them, because I think a lot of them want to see this done and they can speak to the administration. But also, you know, it is talking to your friends and your family about why we don't have enough vaccines worldwide why the next variant can come kick our ass, and that is because of WTO rules, and it's fixable, but we're gonna need to organize to fix it.

Ryan 

Rethinking Trade is produced by Public Citizens Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 40: Apple & Google Seek U.S. Trade Attack on Anti-Monopoly Law

Right now, Apple and Google are lobbying the U.S. government to attack South Korean anti-monopoly policies. They claim that a recently passed Korean law requiring app stores to allow consumers to use diverse payment systems violates the US-Korea trade deal. Big Tech corporations want to hijack trade pacts to outlaw as a “barrier to trade” anti-trust, labor, environmental or consumer protections that could cut into their profits. 

On today’s show, we discuss this case and Big Tech’s current attempts to quietly thwart domestic digital governance and pro-competition policymaking now underway in the U.S. Congress, in various U.S. agencies and in countries around the world by misbranding such policies as “barriers to digital trade.”

Learn more: www.tradewatch.org

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Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan 

Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan, and I'm joined once again by our in-house trade expert, Lori Wallach. There's a good chance that you're hearing this podcast through an Apple or Google platform, and today we're going to talk about something both of these companies are doing to expand their monopolies. Under the guise of international trade rules. Apple and Google are urging US government officials to attack a recently passed South Korean law that would require app stores to allow consumers to use diverse payment systems, not only those controlled by the App Store, among other monopoly busting features. Lori, can you give us a summary of what this so-called dispute is all about?

Lori Wallach 

You bet. At issue here is a law that was passed by South Korea's Parliament that is attempting to break up what are now monopolies by Apple and Google with respect to consumers who want to buy apps, but also developers who have created apps. Under the current monopoly practices of these two, you, as a developer have to sign a deal that says you only sell through one or the other, and you won't go to any other platforms. But then also, you're required to use the Apple or Google payment system. And those big companies take a cut right out from under the developer. So the idea in this law is to say number one, you can use any payment system you want, if it's listed on Google or Apple. And number two, you can't be limited to where you will sell it. And ironically, there are bipartisan proposals that are identical in the US Congress. Now, what the companies are trying to do is pretend that instead of this being an anti-monopoly initiative, that the US Congress is replicating that somehow this is an illegal trade barrier, and perhaps even a violation of a free trade agreement between the US and Korea, which is, of course, total garbage. But it's a preview of coming attractions of the newest and latest attempt to have a corporate sneak attack via trade agreements.

Ryan 

And in addition to being a preview, this whole story also shines a light on the past. But first off, it reflects a broader big tech strategy to quietly thwart domestic digital governance and anti-monopoly actions by branding them as barriers to trade. But it's also part of a long history of companies arguing that basically anything in the way of their profits such as you know, labor, environmental or consumer protections, constitutes barriers to trade. Can you talk about that dynamic historically, and how big tech has sort of updated it and is utilizing it today?

Lori Wallach 

On this podcast, we often talk about how what is at the heart of today's so-called trade agreements often has nothing to do with trade. But rather these corporate-rigged international agreements end up becoming Trojan horse platforms, where non-trade agendas that are not able to get through the sunshine of public debate end up getting implemented through the backdoor of a so-called trade deal. And that's what we're seeing here. So as governments around the world and finally, even here in the US, are realizing the way that these mega-platforms are threatening our economy, our livelihoods, frankly, our democracy, there is action to try and incorporate some kind of basic consumer protections, gig economy worker protections, and generally established what is often called digital governance. So some rules to ensure these companies are operating in the public interest. And the companies hate this. And along a part of that alongside of those public interest protections is some anti-monopoly actions. So the companies realize that they have finally perhaps come to the end of the road of their wild abuses and lack of government oversight. And so their strategy is this effort to get negotiated in the trade context, what they are calling "digital trade rules," those are air quotes around them folks, digital trade because it's not about trade. And what they hope to do is effectively replay what Big Pharma did in the 80s where they got rules stuffed into free trade agreements that required every signatory country to guarantee the pharmaceutical corporations extended monopoly protections so straight up protectionism and free trade agreements, so that their medicines basically could have monopoly guarantees for higher prices and that governments would be handcuffed from using policies that could bring down medicine prices. And that garbage got stuck in trade agreements that doesn't have anything to do with trade. And basically, every signatory country has to meet it. That is what big tech is up to right now, they want to get the handcuffs on the Congress and Parliament's around the world, on government agencies trying to regulate them and break up their monopolies. And the way they sort of see it is they can do this in one fell swoop worldwide. And sort of, you know, excavate the policy space out from under governments around the world trying to get those big monopolist under control. And it is, you know, it is part of a theme, which is you, you know, have seen over and over non-trade policies that the corporations don't like labeled illegal trade barriers and forbidden. I mean, one of the rules in these so-called Digital trade agreements takes a page out of what the Wall Street firms got stuck into a WTO agreement, which is literally rules that say you can't regulate on the size of a firm, or how many services they offer. That's the law globally, for financial firms in many countries, because of WTO. And that's what big tech, for instance, is trying to get enacted, as well as rules that basically, you know, require governments to allow the free flow of information, your private data, which means privacy rules, basically would be very hard to establish, or that requires governments to protect and secrecy the algorithms and code of these platforms. So like racially discriminatory searches that mean different people only see certain jobs or loan opportunities or housing opportunities, incitement to violence, all of the different abuses and discriminations that can happen online. You could never do the research as an investigator or as a congressional committee, you'd have to know a crime was committed for the government to get any of this information. And similarly, liability protections so that you know, if it's sold online, and may burn down your house, that product, but you can't sue for that dangerous product. All of this garbage is part of this broader digital trade agenda and has nothing to do with trade. And so this is basically just the latest version of corporations hijacking trade agreements to do bad things that would be really hard to get past in public.

Ryan 

And what are these companies asking the US to do specifically, and what mechanisms exist through our existing free trade agreement with South Korea that they can utilize to challenge the South Korean government on this?

Lori Wallach 

The big tech companies are asking the US government to threaten to challenge the App Store anti-monopoly policies in Korea as violations of the US Korea Free Trade Agreement. And as well to threaten them with some kind of sanction or other kinds of economic pressure if these laws are allowed to stay on in the books. And number one, the US Congress is about to pass similar laws, there are bipartisan proposals just identical to the Korean law in both the House and the Senate. And number two, if those laws weren't here, and it wasn't a race to see who could pass them first, Korea did, then we shouldn't have laws like that, because we shouldn't have these kind of monopolies that are bad for consumers and bad for app developers that basically allow Apple and Google to harm both the consumer and the developer. And the notion that somehow it should be the US government's business to protect two mega-platforms, online monopolies is just obscene.

Ryan 

And you mentioned this just now. And you also mentioned it earlier with regards to the US. Are there other countries adopting similar measures, as I was in South Korea? And are there threats to those actions by big tech firms as well, I guess, in addition to the US that you mentioned?

Lori Wallach 

Yes, so part of the reason we suspect that Google and Apple are being so fierce piling on the Korean policy is it is one of the first one that has been enacted in such a big country that basically sends a signal to the rest of the world of, "Oh, well, if they're doing it. We wanted to do that. Let's join." I mean, certainly, the US plays that role if the European Union does that. A lot of developing countries can get beaten up by these companies and frankly, by you know, the US government, but when a country like Korea does it well then the big tech companies are really in a swivel about it, because and that's when they call in the US to the EU to beat up the other developed powerful country, because the tech platforms themselves don't have the ability to just single-handedly bully their way into say intimidating the entire Korean parliament.

Ryan 

So my last question Lori is about the US response. So far, the US Trade Representative has not taken up this case and has not come out to challenge the South Korean government at the behest of Apple and Google. Why is it important that they maintain this position and not elevate these attacks, and maybe you could just reflect on the US government's posture towards this?

Lori Wallach 

So this issue right now is in what's called an interagency process, that is to say a bunch of different US government agencies are weighing in and what the US position on this should be. And it is worthwhile, if you care about these issues, to leave comments in support of busting up the App Store monopolies with the USTR to mention it to members of Congress and tell them you support it because some other agencies like the Commerce Department, are basically flacking for the big tech corporations. The United States Trade Representative's office, his position has been basically, of course, they're not going to tolerate laws that discriminate literally are set up to go after US companies because they're US companies. But if there is a law that is neutral, ie just simply bans his behavior. And the reason that it impacts these monopolist is because while they're monopolist, they have an undue size, therefore, they're bigger, they're affected more. Those are the kinds of policies the US government should not go after. Those are antitrust policies. And we really urge the trade representative's office to stick to their principle of evaluating everything on the basis of what does it mean for working people? What does it mean, for consumers? It's been really refreshing to see a trade representative's office that isn't just like the Commerce Department still is thinking about what the big companies want. And so in this interagency process, because they're still talking it out, it really seems that the Trade Representative and that's Katherine Tai is the cabinet-level ambassador. USTR Katherine Tai it seems like she and her team have thought this through carefully and want the rule to be is there real discrimination or is this a legitimate policy? And there are some other agencies that would love to just go after this law because big tech wants it. And so you know, what we need to do is make sure that the good policy prevails because otherwise, you know, what are the implications? It's setting up a circular firing squad, because if we start this fight on a nondiscriminatory policy because some US companies don't like it, then you know, when we have a regulation here that impacts some other countries platform that is neutral, but it happens to impact them because they're a big player in the US, then it's going to come after us. And in the end, it's the consumers and the people who create apps. It's basically everyone but the handful of mega big tech platforms that end up losing under that scenario.

Ryan 

Rethinking Trade is produced by Public Citizens Global Trade Watch. To learn more, you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Biden’s COVID-19 Kumbaya Summit

By Daniel Rangel

In the beginning of August, some media outlets started reporting that the Biden administration was planning to convene a “first-of-its-kind, global leader-level summit” focused on ending the COVID-19 crisis and preparing for future pandemics. The summit was scheduled in parallel to United Nations General Assembly (UNGA) and was supposed to rally the international community to step up its efforts to increase vaccine production and enhance equitable global distribution as the Delta variant surges.

After nearly a full year of frustrated negotiations at the World Trade Organization (WTO) to try to enact a temporary, emergency COVID-19 waiver of certain rules of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS), UNGA seemed an appealing multilateral venue to discuss the direly needed global actions required to bring an end to the pandemic. Hence, for several weeks, journalists, diplomats, academics and activists – but most of all, regular people in the Global South unable to access COVID-19 vaccines – pinned their hopes on the summit that the U.S. president was organizing.

A group of more than 50 civil society organizations – including Doctors Without Borders, Oxfam, Universities Allied for Essential Medicines, Public Citizen and Health GAP,  – sent  President Biden a letter urging him to lead action at UNGA to ensure equitable vaccine production and distribution. The letter described the actions needed so that the president’s announced goal, vaccinating 70% of the population of every country within the next year, might actually be fulfilled.

Our organizations outlined the four crucial steps that would truly make America the world’s “arsenal” of global vaccine access:

  • work with allied countries on a final text to speedily enact a TRIPS waiver for COVID-19 health technologies including vaccines, diagnostics, and treatments;
  • launch an ambitious global vaccine manufacturing program with other countries to help produce billions more highly effective doses within one year and support a dedicated financing line item in the Build Back Better Act committing billions of dollars to this effort;
  • use U.S. government’s full authorities to require the few firms with monopolies over effective vaccines, diagnostics, and therapeutics to transfer technology and production know-how to manufacturers in the Global South; and
  • set an example for other governments by reallocating excess doses available in the United States to countries in the Global South via COVAX or regional procurement mechanisms.

And then the day of Biden’s COVID Summit arrived. It is difficult to imagine how anyone could have felt anything other than disappointment and ire after watching the four-hour long recording of the event. The “summit” was more a recollection of self-celebratory speeches and pre-recorded statements than a high-level debate between world leaders. And it certainly was not designed to launch a global partnership to end the pandemic with specific solutions and verifiable commitments.

The event was divided into four sessions that were supposed to address the urgent need to vaccinate the world to end the COVID-19 pandemic; the dire shortages of oxygen, testing kits, therapeutics and personal protective equipment (PPE) that are ravaging the developing world; and plans to be better prepared for the next pandemic.

Although the targets and commitments related to testing, therapeutics and PPE are woefully inadequate as well, this piece will focus on the problems with the portion of the summit that dealt with vaccine production, distribution and access.

From the outset, it is important to clarify that the Biden administration’s new 500 million vaccine dose donation is commendable. Similarly, the fact that with this new commitment to purchase and donate more doses to a total of 1.1 billion shots makes clear that the U.S. administration is willing to make financial efforts to get shorts in arms not just on American soil, but all over the world.

Yet, it is also true that this action will not end this pandemic or lay the foundations for a global public health framework that delivers for everyone, regardless of their country of birth. And it will transfer hundreds of millions more U.S. taxpayer dollars into the coffers of Pfizer, a company that has reaped windfall profits from the pandemic while blocking the ability of qualified producers in developing countries to make enough doses to cover the world.

At this point, no one thinks that we can “donate” our way to safety. Pledges to redistribute doses from high-income countries with relatively high vaccination rates to low-income and lower-middle income countries are only the first and most basic step needed to stop the global vaccine apartheid we are witnessing.

Why? Because this approach retains control by a few powerful donor countries and the existing monopolist vaccine firms. So, if and when shots get to arms is decided not by the governments needing doses but by those with other priorities and interests. For starters, that means most of the promised doses only are scheduled to be delivered in 2022. Of the 1.1 billion doses that the United States plans to reallocate, 800 million are not expected to ship until next year. And, to date, less than 15% of the vaccine donations that high-income countries have pledged have actually materialized.

Those realities make Biden’s COVID-19 summit not that different from the May Global Health Summit in Rome. There, many European countries pledged to redistributed doses as the main tool to address vaccine inequity, but four months later have failed to live up to the commitments. As a result, people from the Global South are still waiting for these vaccines to arrive. To make things grimmer, Biden’s call for other countries to join the United States in donating more doses only was answered by just four countries. And, the pledges made by Spain, Italy, Japan and Australia, combined, do not surpass 100 million doses.

This is an unacceptable outcome for an event that was billed as the place where world leaders would unite to agree on a plan to end the pandemic. Fortunately, South African president Cyril Ramaphosa, during his intervention at the summit, did spotlight what is necessary to reach the 70% vaccination goal: We need a global plan for developing countries to be able to manufacture their own vaccines and procure them directly.

In the same vein, UN Secretary-General António Guterres recalled his appeals for a global vaccination plan to solve the problems of intellectual property, technical support and finance to quickly ramp up vaccine manufacturing in different regions of the world.

The U.S. government also has backed the idea of expanding regional production of mRNA, viral vector, and/or protein subunit COVID-19 vaccines for low- and lower-middle income countries. However, until now, the United States has left untapped the myriad policy instruments and resources it could harness to translate this aspiration into reality.

Instead of committing to throw his weight behind the TRIPS waiver or announcing that he will use U.S. government’s contractual rights or statutory authorities to mandate the sharing of vaccine production knowledge, during the summit President Biden focused on the scattered actions that his government has carried out to support final-stage vaccine fill and finish operations in some developing countries.

Particularly, President Biden referenced the Quad partnership to finance the production of one billion doses in India and the recent deal to manufacture 500 million doses of Pfizer-BioNTech’s vaccine in South Africa. Both of these deals do not represent transformative solutions that reduce Big Pharma’s control over supply, distribution and pricing of life-saving medicines neither for the COVID-19 pandemic nor for future health crises.

The Quad partnership underpins vaccine production of Johnson & Johnson’s (J&J) shots by Indian producer Biological E. However, for the time being, Biological E is poised to carry out only the final formulation stage, being dependent on J&J for the supply of drug substance. Similarly, the deal between Pfizer-BioNTech and South Africa’s Biovac is just for fill and finish operations. These contractual arrangements do not represent autonomous manufacturing in the developing world and do not entail significant technology transfer or knowledge sharing.

The vaccine apartheid will not end and developing countries will not have autonomous capacity to protect their citizens until there are regional production hubs around the world churning out significant volumes of vaccine doses from start to finish. And, the U.S. government could contribute a great deal towards this goal if it uses its political clout and innumerable resources and levers to get a TRIPS waiver enacted and create the conditions for broad technology and knowledge transfer.

However, President Biden failed to mention the TRIPS waiver during the summit even if the White House factsheet released after the event did reference the waiver, the only truly global initiative to end the pandemic.

At the 76th Session of UNGA, the U.S. administration lost an unbeatable chance to engage with world leaders and deliver a TRIPS waiver for which it announced its support since May. Dread that this foreshadows a similar failure at the imminent November WTO Ministerial Conference.

As for the plans to be better prepared for the next pandemic, Vice president Harris unveiled a proposal to create a new financing mechanism for epidemic surveillance, vaccine development and vaccine delivery. This Financial Intermediary Fund for Pandemic Preparedness is to be hosted by the World Bank.

The U.S. will contribute $250 million, and the objective is to raise $10 billion. The final destination for these huge sums of money is, as of now, unclear. But, unless something changes radically, the only certainty is that the fund will keep nurturing the bottom line of the same pharmaceutical companies that today deny vaccine access to those that need them the most.

The lack of U.S. leadership and the fact that the COVID-19 summit did not yield any meaningful commitment resulted in an UNGA where progress on a global vaccination plan was noticeably absent, despite the calls from African heads of state for support for the TRIPS waiver.  Instead of the promised first-of-its-kind, global leader-level summit to end the COVID-19 pandemic, the summit was a peak of missed opportunity.

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Rethinking Trade - Season 1 Episode 39: President Biden Could End the COVID Pandemic at This Week’s UN Summit - Will He?

Getting the world vaccinated and ending the pandemic is a political choice: World leaders have the medical, technical and financial capacity. To produce enough vaccines involves three clear steps: getting intellectual property monopoly barriers out of the way through a temporary WTO TRIPS waiver, technology transfer through sharing the recipes, and funding global production so the world is not reliant on a few monopoly sources.

With this year’s United Nations General Assembly now underway and President Biden’s upcoming COVID Summit around the corner, the U.S. has a powerful opportunity to end the pandemic. Unfortunately, the targets for Biden’s COVID summit exclude making a final deal on the TRIPS waiver or any others steps to share vaccine recipes with the world so more shots can be produced.

To discuss all of this, we are joined by longtime HIV and social justice activist Matthew Rose, who leads U.S. policy and advocacy work at Health GAP and has been deeply involved in the fight for the TRIPS waiver.

Click here to sign the petition.

Click here to learn more about Health GAP.

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Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan 
Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Today, Lori and I are joined by our friend and coalition partner Matthew Rose. Matthew is the director of US policy and advocacy at health Global Access Project or Health GAP, which we'll talk a bit more about later in the episode. As we speak, world leaders are gathering for a largely virtual United Nations General Assembly. As a side event to the Assembly on Wednesday, President Biden is hosting a global COVID-19 summit to quote, identify concrete actions, and set "ambitious targets to end the pandemic." Lori, could you frame the UN meeting for us in the context of the fight to get the world vaccinated, and then we can talk a bit about what to expect from this COVID summit.

Lori Wallach 
So ideally, this UN summit, where heads of state from around the world get together every year should be the place where finally the world comes together, to agree on a concrete plan to end the pandemic. At this moment, there is no plan. And as a political choice. We have the technological the medical, the financial means to end the pandemic. Now, these world leaders need to choose to do so. And unfortunately, the way it looks like the agenda is prepared, which is a lot of speechifying, and the way that Biden's so-called COVID summit has an agenda and targets that largely ignore the core issues undermining global access to vaccines, which is the key step to trying to end the pandemic. I can't say that's a very auspicious prospect, that what should be the meeting to end the pandemic is actually going to deliver the Biden summit is all about sharing existing doses and donating doses. But adding a billion more doses to the pledge of rich countries giving poor countries doses does not fix the 10 billion dose-gap in the supply or distribution that now has less than 2% of people in poor countries, getting vaccines and allows the COVID variants to be brewing around the world wiping out unvaccinated people destroying people's lives and livelihoods. And the agenda, the targets for the Biden summit, in no way take on the corporate monopoly control by Big Pharma entities that is causing vaccine apartheid worldwide. So Matt rose, you are a person who has been a leader in these global access to medicine fights for a very long time. How do you see it?

Matthew Rose 
It's interesting the way you framed it, Lori because I think that what popped out of me first about the summit is there's nothing new here. There is nothing being said or done to get us further along the path. The targets that they put out are not that different from what the WHO has already identified as targets. We've done the pledging thing when we had our meeting, back in June when the G7 got together, and of those 500 million doses that the President was going to donate them, that promise to donate, they have yet to be materialized. And they're at the back of the queue when it comes to doses coming out of the COVAX system. So all we've seen, since the big announcement that we were going to say let's break pharma control. Let's make sure that doses are available back in May, when we said the trips waiver should go forward is a lot of just hoo-ha in action. In a world where millions of people are still suffering from the effects of COVID where we're watching variants continue to rise around the world and continue to wreak havoc, reigniting some of the places where we thought we were doing good. And it leads you to question are we going to actually end this pandemic? Because we've had these meetings before. Why is this different? And so far, what's been put on the table looks like more of the same, which has fundamentally not gotten us to a place of ending a pandemic.

Ryan 
Let's talk specifically about one of those big demands to end the pandemic. That is a solid proposal, one being made by governments and civil society organizations throughout the world, which is the TRIPS waiver. Lori, could you give listeners a quick reminder about what the TRIPS waiver is and where it stands currently. And then Matthew, maybe you could talk a bit about the work being done. Now, to make the waiver a reality.

Lori Wallach 
You bet. I want to also just share with people COVAX, that's the agency that's supposed to take donations and dole them out. And what Matt Rose is pointing out is if you've got a shortage of doses, that kind of an agency, which is way short of even the modest goal of getting 20% of people in developing countries vaccinated just doesn't have the shots because they're just not available. So how do you change that dynamic? So more vaccines, treatments, diagnostic tests for COVID are being made worldwide. So that instead of having very high vaccination rates in a handful of rich countries and the rest of the world screwed, you actually get the whole world vaccinated, you get the whole world tested, you get everyone treated, you save lives, and you end the pandemic. How do you do that? And the thing that 150 countries want and have wanted since a year ago, October 2 of 2020, is a waiver of the WTO rules that require all the WTO countries to guarantee pharmaceutical corporations monopoly controls for many, many years of things like the COVID vaccines. So right now, under these WTO rules in the agreement on trade-related aspects of intellectual property, it's called TRIPS. every country around the world is supposed to let these handful of companies which use enormous billions of government money to create these vaccines control if and when they're made, where they're sold. As a result, shocker, the most effective vaccines, Pfizer, Moderna, are being only largely sold in the rich countries. And most people around the world have nothing. So this waiver of these WTO TRIPS monopoly requirements was proposed a year ago. In May, the Biden administration said they would support it, they have not exerted leadership to get it done. So here we are four months later, it's a total deadlock. And this is what's so disgusting. It's blocked by literally three countries, Germany, the United Kingdom, and Switzerland, with Germany leading the crew. If Germany stopped blocking with 150 other countries around the world have stood up and said, this is necessary to deal with this incredible inequity, we must take away the former monopoly so more can be made by everyone so everyone can get it and we're jammed right now. We've got two months before a big WTO summit that starts around Thanksgiving to actually get a final deal done. And it's only going to happen if the US President Biden stands up. But Biden's agenda for this US summit isn't to land the waiver deal or to otherwise force these monopolist Big Pharma companies to transfer the technology needed to make more doses. In fact, the big highlight is announcing they're going to give more us taxpayer money to monopolist Pfizer to buy hundreds of millions of more doses to donate. So instead of actually distributing production and control to people around the world, to control their own destiny, and make sure that for this pandemic, and for the next they have the ability to survive. Instead, we're gonna have taxpayer money going to have the monopolists have more profits to make some doses not enough and ship them around his charity.

Matthew Rose 
One of the most important things in a public health crisis is time, we have squandered over almost a year now, in not giving people what they want. And what they've asked for. This would not cost the United States any new money. This would not hurt the first-world countries who've used 70% of the doses that have been allocated to the world. what it would do is give everybody a fair shake to be able to make their own vaccines, make their own diagnostic tools, make their own treatments available in their countries. And we know that this is what's needed in this kind of emergency time. And we continue to, instead of moving something forward that 150 countries have asked for. We let just three countries, three countries who are well vaccinated, who have good control of the epidemic in their countries who don't have the economic wherewithal to weather lockdowns decide that the rest of the world who is feeling the crashing effects of this delta wave have no choice, no options here. And it's really a question of do we want to have as the United States, the moral authority to say, for the good of the world, we will do the right thing. And in May, it sounded like we were going to get there. But over months of negotiations, what have we gotten? We've gotten the Europeans floating a nonproposal, which essentially exists only to slow down the process, as again, their entire populations get vaccinated, while the people on the other side have to see the horrific things of what's happening in the US x100. Because they have no access to vaccines, there's no protection for them. And we continually sit in this spot of staring down each other when people needlessly die and suffer, because we don't want to exert the authority required to push the waiver through. We know that the US leadership is key on these issues. We know the US has rallied the world before and rallied with the world to fight large global health challenges. Every president in American history, since the Carter administration has had to deal with a global health crisis. We've always taken a central role and we've helped Marshal resources and done it in a productive way. For the most part. I have some quids and asterisk there, but we can get into that later. But we know that what leadership looks like from the US, it looks like our diplomats in Geneva using every trick in their playbook offering things carrots and sticks aligned to get people to move on these questions. And we're just not seeing that this time. And it's almost gobsmacking to see how we got stuck here.

Ryan 
And Matthew, speaking of time, Health GAP grew out of the fight to ensure that all people living with HIV, especially those in the poorest parts of the world have access to life-saving medicines. That was back in the late '90s. Can you talk a bit about what that fight looked like then how it played out over the years and how it ties into the current fight for the trips waiver and getting the word vaccinated against COVID-19?

Matthew Rose 

Absolutely. Health GAP history is born from that fight when we watched triple combination therapy, be accessible to the rich countries and not getting it to our colleagues around the world knowing that the suffering we were seeing here and the transformation that we got from those drugs could also be transformed there. And it's eerily similar in very disturbing ways about what's going on. One of the interesting things in the HIV fight in the 90s in the early aughts is that we got to people who you would never think to be on our side, to come across on our side on this issue. That being George W. Bush and Dick Cheney. I know, I know, you're shocked, too. But this proves that going through the WTO can work. Why because we got Cheney and Bush to rally the world together to have the Doha Declaration, which relax IP rights on antiretrovirals so that we could push them out around the world and has generic manufacturers be able to move into the market. And you saw a massive change in the lives saved from this meaningful work and engagement. And these were staunch, staunch neoconservative Republicans who love free trade above all else. But even they were willing to recognize that trade-related barriers, had a ceiling that had a threshold that they shouldn't cross. And if that if they did cross that something, government had to step up and act. And it's wild to think that we worked with Cheney and Bush to get this done to unlock the blockages and allow this flow. Now was this flowing perfectly everything we wanted? No. But you know, that's what you get when you play with Republicans sometimes. However, it did unblock a number of things that allow us to truly set up an infrastructure that continues to allow new products coming from developed markets into the rest of the world. So you can see, you know, now we're still paying crazy drug prices in the United States because we pay crazy these drug prices in the United States. But you can have the generic version of the exact same drug available in a much more affordable manner to people in developing countries who need that drug. And this was a game-changer because it really allowed us to get treatment where it needed to be. Now, one of the places that pharma got to benefit was that it meant that there was a conference supply of people who needed drugs and had drugs paid for, and we had to create a mechanism to pay for that drug. And, you know, the generic companies at least got to have some of that cash. So pharma still gets to benefit and even in the world now, if the waivers are removed, they still get a little bit of money. It's not a whole free for all sale. But it does change the balance of power. And it allows people to make their own drug in-country and sell it to themselves at rates that they can actually afford, rather than what the United States might pay or you know, say Germany can afford to pay. Furthermore, as we watch this kind of global vaccine hunt happen, we can see that things that we've done in the HIV fight, have taught us that how to make these things work and happen. But it's a matter of do we have the political will to get there? And that's where we've been stuck is can we rally the will of the people to do what we did to do what the republicans did, it's still so strange to say, back in the early 2000s and realizing that you can indeed help people to save themselves. And that I think, was empowering, we basically created a generic market scheme by allowing this to go through. And this spurred innovation and spurred development in India, making them kind of the biological place of the world. So you can see what countries are able to do. Bangladesh is able to do places that can really do something once these barriers are removed, and that the investments that they make in those can have spillover effects for other things and other options. But you've got to get through the big block, that is the waiver and getting people on board with understanding that we can go big because we've done it before. And all your arguments about collapsing the pharmaceutical system are all empirically denied, because there's still a thriving pharmaceutical system in the world, even though people with HIV can now get medication.

Ryan 
I think we'll end it on the note of rallying the world like you just mentioned, Matthew, Lori, maybe you could talk about what listeners can do right now to help when the TRIPS waiver and then the pandemic and then Matthew, maybe you could just tell folks listening how they can support the work Health GAP is doing both in regards to the waiver and the other important areas that you focus on.

Lori Wallach 
The most important thing is to build pressure on the White House to take action to end the pandemic. This is not a technical problem. This is a power problem. We need to elevate our demands for a TRIPS waiver for technology transfer and for funding for global production to get everyone the vaccines they need to end the pandemic. There are two easy things everyone can do right now, go to tradewatch.org, top left corner, you will see a box about this crisis, click, you will see an action alert, sign the petition and then pass it on to your friends and family. Number two, it really matters to call your members of Congress at 202-224-3121. You can call the US Capitol. You just give me your zip code, they will send you to your House member have your house member transferred to your senators, ask your House representative and your two senators to talk to the White House, particularly Jeff Zeints and get a letter written back to you about what they say about what they're going to do to deliver the TRIPS waiver

Matthew Rose 
Ditto all the things Lori said it's super important that we raise the pressure and we make this White House realize that the American voters realize what is being done in their name and decide what we're willing to stand for. We can demand that our government actually shift power and create an equitable way to distribute and help support vaccines getting around the world. We can actually think about how to end this pandemic. The plans are out there. The data is out there. The information is out there. It is a matter of political will. And the best way to rally will is to talk to your friends, your family, your co-workers. Share, share, share share. There will be so much information about the waiver for the next couple of weeks and about what we're doing follow Global Trade Watch, follow Health GAP on Twitter. Go to our website to healthgap.org. We are working hard to continuously pump out new materials and resources that help explain what's going on and what's happening in the fight. But this coming summit will help set the stage for what the world does going forward. We can either decide to let a mediocre, lukewarm, boring agenda continue to drive things where we sit and stare at each other across the room and twiddle our thumbs. Or we can act with the urgency and the swiftness that is required to end a pandemic that has encased our lives for over a year and a half to actually provide and support with the rest of the world, 150 countries has asked of us and to truly transform society in ways that recognize justice, dignity and equity. This is our moment. This is a moment in a world where you might not thought it was gonna come. But here now you can make it happen. Fight to support the waiver, fight for vaccine equity and fight to end the Covid-19 pandemic.

Ryan 
Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Delta Variant Shows, Unless Biden Administration Starts Leading Global COVID Vaccine Effort, Pandemic Will Never End

[Reposted from PC News]

By Mike Keeley

The delta variant-fueled COVID-19 wave that is slamming communities nationwide and flooding ICUs is a glimpse of the endless pandemic to come unless the Biden administration secures a waiver to significantly boost production of vaccines, tests, and treatments; requires firms to share vaccine recipes; and helps to fund a major increase in COVID-19 medicine production worldwide.

A recent report by Public Citizen’s Global Trade Watch (GTW) debunked Big Pharma claims that drug corporations’ current vaccine production plan would quickly satisfy global demand. Nine months into 2021, current vaccine producers have delivered only five billion doses of the 12 billion they promised to make this year, while 14-15 billion doses were needed before rich countries started booster shots.

Less than 3% of people in low-income countries have had at least one dose, according to the World Health Organization (WHO), and those countries may wait until 2024 for mass immunization, if it happens at all, according to the Economist Intelligence Unit.

This scarcity is not only unjust and guarantees needless deaths and economic pain, but increases the chances of vaccine-resistant variants emerging that put the whole world back to square one on immunization.

The global shortage of vaccines can be traced to monopolies that empower a few vaccine makers to control if, how much, and where vaccine doses are produced. The World Trade Organization (WTO) requires 159 countries to enforce patent and other so-called intellectual property barriers to greater medicine production.

Regular Public Citizen News readers will recall that the Biden administration made history in May when it reversed the Trump administration’s position and supported temporarily waiving the WTO pharmaceutical monopoly terms to save lives amidst the COVID-19 crisis. American support for the “TRIPS Waiver” greatly elevated the issue and influenced some allies to follow suit.

However, since then little progress has been made thanks to a handful of wealthy countries opposing the waiver, especially Germany and the European Union on its behalf.

Following the U.S. announcement of support, GTW joined with a coalition of U.S. and international civil society organizations to pressure German Chancellor Angela Merkel to stop blocking the more than 130 countries that want the waiver. As Merkel traveled to Washington, D.C., in July for her final White House visit, she was met with dozens of protests organized by Public Citizen, Citizens Trade Campaign (CTC), and allied organizations focused on more than a dozen German consulates nationwide.

20210715_Merkel_Die_In_0116

Protesters arranged body bags outside the White House during a protest calling on German Chancellor Angela Merkel to stop blocking an emergency waiver of intellectual property rules needed to increase global production of COVID-19 vaccines and treatments that would help save millions of lives Thursday, July 15, 2021 in Washington. The action in support of the “TRIPS waiver” was one of more than a dozen demonstrations in the U.S. capitol and at German consulates across the nation timed with Merkel’s visit to the United States this Thursday. While President Biden and a majority of the world’s governments support a TRIPS waiver, Germany continues to obstruct it. (Eric Kayne/AP Images for Citizen Trade Campaign)

The Chancellor was directly challenged by GTW protestors—including one inside a large Merkel puppet—as she arrived for an honorary degree at Johns Hopkins that students petitioned against, given her opposition to the waiver. CTC, GTW, and allies mobilized a huge banner on helium balloons depicting the White House in the background. Body bags were also laid outside the White House the day of the Biden-Merkel meeting, generating more press. Heads of major U.S. organizations wrote to Biden and spoke at a press conference organized by GTW to publicly urge him to exert U.S. leadership at the summit and resolve the German opposition.

Public pressure put the TRIPS waiver on the agenda for the summit, but Biden apparently did not expend the political capital necessary to convince the Chancellor to move. Nor has the administration exhibited the leadership at the WTO. 

Waiver proponents had called for progress by the end of July, but with none in sight, the WTO disbanded for a six-week vacation against the WTO Director-General’s guidance. “The WTO is showing itself to not just be useless in the fight against COVID, but an actual hindrance,” said GTW Director Lori Wallach. “The WTO’s shameful inaction on the COVID waiver could be the final undoing of an organization that already was suffering a major legitimacy crisis and on its last legs.”

According to Oxford University, more than 3.3 million people worldwide have died from COVID-19 since India and South Africa first proposed the WTO waiver in October 2020. Meanwhile, White House coronavirus czar Jeff Zients appears to have no plan to end the pandemic. GTW and almost 30 partner organizations – including Be A Hero, Amnesty International USA, and Avaaz – are joining forces in a petition to Zients demanding that he:

  • Actively cooperate with waiver proponent-nations to produce a draft WTO TRIPS waiver text and use all means to press the European Union and others to end their opposition;
  • Leverage the U.S. government’s past public investments and all legal authorities to make vaccine firms transfer technology; and
  • Launch and fund a global manufacturing plan to increase and democratize vaccine production in hubs worldwide.

Biden is reportedly planning a COVID-19 summit in conjunction with the United Nations General Assembly in September. According to Wallach, “President Biden’s global COVID summit will only be a success if he uses it to exert global leadership to get the WTO TRIPS waiver done and secure commitments from other countries to help fund the necessary scale-up in developing countries’ production of COVID vaccines to end the pandemic.” More than 130 countries support the WTO waiver, and opponents are facing increasing political pressure and moral outrage. Chancellor Merkel’s upcoming retirement creates opportunities for our German allies to end their country’s obstruction of the waiver and thus end the EU’s opposition. But while there is hope, there is also peril. All eyes are now on the Nov. 30 WTO ministerial, a date far beyond when a waiver should have been enacted. And Big Pharma and other interests are pushing to transform a meaningful waiver into a meaningless WTO political declaration.

Public Citizen will keep up the pressure to force the Biden administration to show leadership and secure a comprehensive waiver as fast as possible to end the pandemic.

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Tuesday Press Conference: MoCs, Civil Society and Labor Leaders Urge Biden To Launch Global Plan to End Pandemic at Next Week’s UN Summit

For Immediate Release: Sept. 9, 2021
Contact: Derrick Robinson, drobinson@citizen.org

MEDIA ADVISORY

 South African Government Official Will Provide Update on WTO Vaccine Waiver as Delta Variant Devastation Foreshadows Devastation of Endless Pandemic 

WHAT: Ahead of the U.N. General Assembly (UNGA) heads of state summit, Member of the U.S. Congress and heads of labor, faith and health organizations will spotlight in a Public Citizen Zoom press conference why President Joe Biden’s leadership is essential to ending the pandemic.

In the months since Biden’s historic support for a waiver of World Trade Organization (WTO) monopoly barriers to greater COVID vaccine production, little progress has been made. And White House COVID Czar Jeffrey Zients has yet to unveil a global plan as the Delta variant detected in India where vaccines are scarce is now raging worldwide. UNGA and Biden’s  global COVID-19 summit will be successful if the president uses them to get the WTO waiver done, require vaccine recipes be shared via  broad tech transfer to speed expansion of COVID medicine supplies, and move funding for much expanded global production.

WHO: U.S. Rep. Jan Schakowsky (D-Ill.) 

U.S. Rep. Rosa DeLauro (D-Conn.)

Zane Dangor, Republic of South Africa, Special Advisor to the Foreign Minister           

Dr. Joia Mukherjee MD, MPH, Partners In Health, Chief Medical Officer

Father Charles Chilufya SJ, Jesuit Representative for Africa and Madagascar

Sara Nelson, AFA-CWA, President

Moderated by Lori Wallach, Public Citizen’s Global Trade Watch

WHEN: Tuesday, Sept. 14 at 9:30 am EST [GMT-4]

HOW: Press can register here.

BACKGROUND: On May 5, people around the globe cheered when President Biden announced the U.S. would support a temporary waiver of WTO intellectual property barriers to boost production of the COVID-19 vaccines needed to save lives and end the pandemic. But months later, Big Pharma monopolies remain, now exacerbated by even higher vaccine prices. Current production capacity cannot supply enough COVID-19 vaccines for the world. The poorest countries may wait until 2024 for mass immunization, if it happens at all, per the Economist Intelligence Unit. To date, 75% of vaccines have been administered in just 10 countries, and only 1% of people in low-income countries have received at least one dose, according to World Health Organization statistics.

The U.N. Global Assembly of world leaders comes at a time when the critical shortfall of vaccines, diagnostics and treatments in low- and middle-income nations is enabling more deadly and possibly vaccine-resistant variants to develop and spread domestically and abroad. The delta variant first detected overseas is burning through the U.S., and scientists warn of even deadlier variants as the pandemic drags on. Unless the UNGA results in significant breakthroughs to the WTO waiver, tech transfer and global production funding that ensure that people worldwide can access vaccines and treatments, there can be no end to the public health or economic crises anywhere.

###

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Rethinking Trade - Season 1 Episode 38: Labor Day Special: An Historic Vote in a Mexican Auto Plant

On August 19th, workers at the massive General Motors plant in Silao, Mexico participated in an historic vote that ousted the corrupt and undemocratic protection union that had long controlled labor relations there. The effort to win such a vote was made possible by the labor rules and Rapid Response enforcement mechanism of the USMCA trade deal.

In this Labor Day special, we sit down with Public Citizen’s Global Trade Watch Research Director Daniel Rangel and long-time labor organizer Jeff Hermanson, who has been supporting the General Motors campaign through the AFL-CIO’s Solidarity Center. We discuss the situation at Silao, its significance in the context of trade policy and what it says about the prospect for workers to utilize the USMCA to fight for labor rights in North America.

Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan 
Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. It's Labor Day we're doing a Labor Day special episode about a quite historic union vote at a General Motors plant in Silao, Mexico. Joining Lori and I is Public Citizen's Global Trade Watch Research Director Daniel Rangel. As well as Jeff Hermanson, former Mexico director of the Solidarity Center and a longtime labor organizer. Jeff has been pretty involved in supporting the efforts at the General Motors plant in Silao. Jeff, why don't you just start by telling us what just happened at the Silao plant. And then we're going to talk about how significant this is for the Mexican labor movement but also for the prospects of the revised NAFTA, the USMCA's labor protections, and enforcement mechanisms.

Jeff Hermanson 
The General Motors plant employs 6,400 workers. They have a collective bargaining agreement that's known as a protection contract with the CTM (Confederation of Mexican Workers), the largest union in Mexico. And under the labor law reform in Mexico and the USMCA, every contract has to be legitimated by a secret ballot vote of the workers for the first time. And the workers voted it down. And that's a big deal.

Lori Wallach 
There was a really exciting development, one that involves a lot of different streams of organizing and policy change. One, I think the key thing was the Rapid Response Mechanism (RRM) of the revised North American Free Trade Agreement, which is officially called the US Mexico Canada agreement, the USMCA. That agreement going into place required the labor law changes, Jeff, that you mentioned in Mexico and also created this mechanism, Rapid Response Mechanism that for the first time allows company-specific cases to be filed to directly enforce against an individual company, the new labor rights that were required, basic core ones right to organize rights in the revised NAFTA. And there's a lot riding on whether or not that mechanism can work. It definitely is an important new tool. And at the same time, it's, you know, first trial runs. So the US government under US Trade Representative Katherine Tai self-filed one of these rapid response cases against GM, with respect to the outrageous basically malfeasance that occurred during the first effort to have a vote on this contract. I'm wondering, Jeff, if you could explain to us a little bit of the context of this, because, you know, folks are probably not that familiar with the idea of a protection contract. And also, the obligation under the new NAFTA is that every one of these old contracts, a lot of them, which were really, you know, protecting the boss, not protecting labor rights have to be revoted. And so this came to a head in the context of that process. And I'm gonna ask you, Jeff, to take it away and give us some context of how we got to this and why this is so important.

Jeff Hermanson 
So in Mexico, there are very few non-union workplaces. But 90% of the contracts are considered protection contracts, that means that they're put in place by the employer and an union before workers are hired in many cases, without worker knowledge in many cases. But even if there is some worker knowledge as there is in the General Motors situation for the purpose is to protect the employer from any legitimate union representation. And in this case, for example, for the 12 years that this union held this contract, there was not a single assembly, not a single vote on leadership, not a single ratification of contracts, and very little help from the union on any individual grievances. So because every one of these contracts is now going to have to be voted by the first of May, 2023. Because of the importance of the plant the size of the plant. The eyes of the Mexican government and the US government were on this vote. And in April when the first vote was held, it was a two-day vote. The first day of the vote went forward, the ballots boxes were put in the union office for safekeeping, supposedly, but when they came the next day to start the second day of voting, they found that the ballot boxes had been broken into, and ballots destroyed. And they had done a count of the vote up to the end of the first day. And the vote was leaning towards rejecting the contract, 45 to 55. A surprise to everyone. The workers and the secret ballot had voted this contract down, however, because of the irregularities, as they're called the Secretary of Labor suspended the second day of voting did an investigation, and issued a finding that yes, serious irregularities had occurred. The same day that finding came out, the US Trade Representative filed a complaint under the terms of the labor chapter of the USMCA calling upon the Mexican government to take steps to remedy the situation. Labor Secretary in Mexico ordered a second vote, which was supposed to take place within 30 days of her order, the 30 days came and went, the CTM just didn't run the election. And so then an agreement was reached between the US Trade Representative and the Mexican Secretary of Labor, that a rerun election had to be held by August 20. And if it wasn't held, the contract would be invalidated. So that puts some real sanctions into the agreement. And it also required observers. And the bottom line is when they voted again, they voted the same way: 45% Yes / 55% No. And they rejected the contract.

Daniel Rangel 
Thank you, Jeff, for chairing this. I think that what our listeners are wondering now is what will come next? What's the process for workers to get through in your representation at GM- Silao.

Jeff Hermanson 
So now we're in a situation where this contract will be invalidated. I mean, there's a period in which the CTM can object to the election. And throughout that period, the contract stays in effect, we hope that that 20 day period will result in the contract being eliminated. And the workers then have the opportunity to form their own union, they've already applied for the registration and gotten registration of an independent union. And now they're campaigning to get enough support to apply to negotiate a contract.

Lori Wallach 
So what do you think was the relevance of the Rapid Response complaint for the outcome because this is like a pretty stunning outcome after decades of workers getting screwed by protection unions in Mexico was a brave thing to vote the way they did the fact that the vote actually got redone in a fair way, as you know, knockdown, drag-out stunning, given the context. Does the USMCA and the USTR self-initiated case had anything to do with that? Or is it all about internal organizing, which I know we want to hear about the amazing work that the workers did also to represent themselves? But was the RRM part of the story?

Jeff Hermanson 
Absolutely, this second vote probably never would have occurred without that complaint, because as I said, the Secretary of Labor ordered to election rerun in 30 days, and the union just didn't do it. They said, "No, we don't have to do it, we have until the first of May of 2023 to do it." Without that complaint, the second rerun probably wouldn't have occurred.

Lori Wallach 
You figured they were thinking about the sanctions and the RRM, that we're going to hit the company and the government was going to look bad, and they were all seeing that chewing on their ankles?

Jeff Hermanson 
The government in Mexico really does not want sanctions to be applied. They do not want, you know, investors to see that sanctions could be applied to them. So basically, they were ready to do just about anything that the USTR asked to get past this complaint. And what they did was order a rerun election under conditions in which the workers could vote freely, secretly, without coercion, and vote their conscience. And that's what they did. You know, and it really is an amazing testimony to the courage of these workers. Because in the past, this never would have happened in the past the CTM would have brought in, you know, 100 thugs to intimidate the workers. I mean, we've seen this so many times, there would have been no secret ballot, you know, it would have been an open vote in front of everybody. And, you know, I never would have happened. So this is a turning point in the history of the Mexican labor movement, in my opinion.

Daniel Rangel 
This case appeared on the radar of many people with these outrageous episodes of the representatives destroying to ballots of the workers that were voting no against the contract. But this fight and struggle of many workers started many years ago, right? Could you give us a little bit of the background of what was going on in that plant? And what were the main drivers for workers at the GM-Silao plant to both know for this contract?

Jeff Hermanson 
I think you know that it's true that there has been dissent within this company for years, but dissent that was repressed, the dissent that resulted in workers being fired dissent that really, you know, could not come into the open without retaliation from the company. And so as a result, the main voice of the workers was a group of fired workers, eight fired workers formed a group called Generando Movimiento (generating movement) using the initials GM, you know, they were a presence on social media, they were a presence with their personal connections to folks in the plant. And it's quite obvious that they had some real impact because we've seen other legitimation votes recently in auto plants that were one-sided in favor of the Union. Because there was no such movement in the plant because workers were intimidated. In this case, we saw the CTM, holding captive audience meetings with the help of the company, before the first vote, in which they were telling workers that if they voted the contract down, they'd lose their benefits, which is a lie. We saw threats and intimidation of workers, we saw the idea floated that if the yes vote won, that they would raffle off 10 brand-new GM vehicles, of course, workers know in Mexico that a lot of promises are made in election campaigns that are never fulfilled, and this is one of them. But you know, it was a situation in which the workers themselves had built enough of a support network in that plant that people felt safe to vote their conscience. And that's really an amazing thing.

Daniel Rangel 
Before you finish. Let me ask you this, how was this news and this historic vote received? And how is this gonna change the landscape for the relationships between employers and workers in Mexico?

Jeff Hermanson 
I expect this sends a message to employers and unions, you know, it received tremendous press coverage in Mexico. This was one of the top stories for a few days after the vote. And there are employers right now thinking, "What am I going to do when my contract is up for a vote?" In many of these cases, the workers don't even know there's a contract. So we think that a lot of these contracts will fade into history, when the deadline, first of May 2023 rolls around, most of these contracts will not have been legitimated and they will no longer be in force. Those that are voted on, we're going to see, we're going to see more defeats of protection contracts.

Daniel Rangel 
And why are you so certain that workers are going to vote down these contracts?

Jeff Hermanson 
You know, these contracts are protection contracts for a reason. And the reason is to keep wages low. And wages in the General Motors plant are half what the wages are in the Volkswagen plant in Pueblo where they have had an independent union, negotiating real wage increases for the past 25 years. And you know, the differences are very obvious. There are three independent unions in the assembly plants in Mexico, one in Volkswagen, one in Nissan, and one in Audi. And all three of them have at least 1/3 higher wages than in the GM plant. And some of them have double the wages. That's a big deal. It's a big difference. People can see that. Workers are fed up. They were fed up with the CTM in this plant, they're fed up with protection contracts in many plants throughout Mexico.

Lori Wallach 
Well, that begs the next and sort of final question, which is what needs to happen now for actually the workers at the Silau plant to get an independent union? They still have to get a new union. And GM has to recognize that new union and then they need a new collective bargaining agreement. So are there challenges between saying no to the old and getting the new that could actually change worker's lives? What are the prospects there?

Jeff Hermanson 
There definitely are challenges. Other protection unions are circling around the GM plant and talking about how they're going to represent these workers. But the workers themselves have formed an independent union, national independent union of workers of the auto industry. They have received their registration papers from the federal authorities and they are seeking right now to sign up, you know, they have to sign up 30% of the workers in order to demand collective bargaining, we expect there will be real competition for support. I mean, we can't forget that the CTM did get 45% of the vote, we expect that they will try to negotiate a new contract. If the independent union gets a 30% signup, there'll be an election between any union that can provide a 30% showing of interest, essentially, they'll be on the ballot. So we might see a competitive election between an independent union and the CTM union or another protection union.

Lori Wallach 
And the very fact they have the opportunity to have that vote and have an independent union challenging the corrupt CTM protection union is a pretty amazing development. Dear listeners, to put this in perspective, this is historic. And I think the thing thinking forward about these challenges and all is for all of us to think about what work we need to do as activists, as organizers, as policymakers listening to this interview to actually translate this opportunity, these instruments into the reality that workers throughout North America have been fighting for together since the NAFTA itself was hatched in the early 90s, to actually have a mechanism for workers to improve their lot and the transnational companies have been playing workers off of each other, taking their high wage union jobs in the US to Mexico to pay people $2-3 an hour, making sure there are no real unions. How do we translate this opportunity, this moment through action through the RRM cases through solidarity into real change? And that is what is before us. And Jeff, I don't know if you have some specific ideas about that?

Jeff Hermanson 
You know, the recommendation of the Independent Mexico Labor Experts Board has been for massive funding of US and Mexican union binational organizing efforts. I'm very much in favor of such a program. I mean, this is what needs to happen. We need to train a generation of professional trade union organizers. We need to help them create industrial unions that are independent of government and employers that are democratic, and that actually represent the interests of workers. And that can be done with the cooperation of US, Canadian and Mexican unions, this is possible now for the first time in my career. I see this as a real possibility.

Ryan 
Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 37: Hyperglobalization, COVID and Failed Supply Chains: Now What?

In our very first episode, we looked at how corporate-led globalization has fueled shortages in our medical supply-chains and limited our ability to fight COVID-19 Today, we catch everyone up on the latest, discussing two Biden-Harris Administration initiatives aimed at addressing this mess -- a targeted supply chain-review and an executive order on Buy American procurement rules. We also make sense of the latest U.S. trade data, which suggests a record trade deficit in 2021. Yup, that's probably another COVID symptom…

Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan 

Welcome back to rethinking trade where we don't just talk about trade policy, we fight to change it. I'm Ryan, and I'm joined once again by our in-house trade expert, Lori Wallach. Lori, and one of our very first episodes, we talked about how decades of hyperglobalisation have undermined our resilience against the COVID-19 crisis, and how the government has to actively intervene in the economy to rebuild a domestic manufacturing base. Today, we wanted to update listeners on what has been and hasn't been happening since that time. Let's start with an overview of the big picture. What does the pandemic look like today from a trade policy perspective?

Lori Wallach 
So, on the one hand, the expected shift towards more domestic supply chains in response to what proved from COVID, to be enormous vulnerabilities in this country, but around the world created by hyperglobalisation. And these very thin, brittle globalized supply chains. This has not happened as quickly as one might hope and expect. In part, the corporations, the big multinationals, the Amazons and other mega retailers, who've made a lot of money on that race to the bottom hyperglobalized system of sweat labor, supply chains, and just-in-time production, are very keen to maintain that system, which prioritizes their profits, and what they will consider efficiencies, no redundancy, over reliance, reliability of supply and deliverability of critical goods. And so they're pushing back. And also, we've had that system being pushed for the last 25 years of the World Trade Organization, the NAFTA Free Trade Agreement model. So it's a steamline are heading in the wrong direction, it takes a long time to turn. The evidence of that is that we have seen increased imports from China into the US, of the medical supplies we've needed from personal protective equipment, PPE to different kinds of medicines that we've needed to deal with the COVID crisis. We have seen a lot of spending domestically, as people are stuck at home and not spending more on restaurants and travel on kitchen goods, you know, fancy ovens and other things, a bunch of which are imported. So our trade deficit has gone up. Interestingly, the WTO has reported that's contrary to the cheerleaders of the corporate globalization model, there haven't been a lot of enduring trade barriers. So countries didn't use emergency tools to shut down trade and force domestic sourcing. The WTO just issued a report that many of the trade restrictions that emergency restrictions that have been put in place during the height of COVID, have been lifted. And that actually, if anything, there's been more removal of trade barriers and attempt to get the important goods that the production of which is over-concentrated in a few locations. And on the other hand, there have been some very inspiring moves by the Biden administration, which include a supply chain review in some key sectors and also a Buy American executive order. Now, we also saw during the Trump administration, some similar announcements and executive orders. And the proof is always in the pudding. The Trump administration didn't follow through, they had a lot of power and opportunities to do things just unilaterally without Congress. They didn't take them. The bind administration has taken some specific steps, and we're gonna have to watch carefully to see if they actually follow through on all of it.

Ryan 
Those specific steps are what my questions are based on the first big item I wanted to tackle you just mentioned, which is the supply chain review being conducted by the administration. What does this review entail? Like what is it what's its purpose? And what is the status of it?

Lori Wallach 
In the spring, the body Harris administration announced they would do 100 Day Review to figure out the weaknesses in and plans to strengthen certain critical supply chains. And they pick three sectors. And they pick three important sectors: critical medicines, critical minerals, the production and processing of, so for instance, the minerals used in making cell phones and the communications equipment, and then also semiconductors, and then also the supply chain for batteries, electric batteries, which is to say, the sort of advanced batteries that are used for electric cars. And then June 8, they published a report, it was perhaps the first time since Alexander Hamilton, that the US laid out a detailed industrial policy in writing. And I'm only slightly exaggerating, the report itself was incredibly inspiring. It's laid bare, the deep flaws in the current system, in a way that I would say, as someone who's observed these issues for 30 years, one could hardly have ever predicted would come out of the US government, and was quite smart in laying out the ways in which the old regime failed. And I know that wasn't easy, because some of the agencies and for that matter, even President Biden had supported the past policies that led to these problems. So in that regard, it was incredibly impressive and helpful because the only way you get a different outcome is when you start to admit that the status quo didn't work. And it takes you know, it takes bravery if you were part of hoping those old policies would work and pushing them. And some of the proposed changes of how to fix the problem, were also really inspiring and were spot on. And were things you would never expect to come out of any US administration. And by the way, weren't the kind of things that the Trump administration dug into not neither in detail of thinking it through and figuring out the solutions as compared to a bunch of superficial rhetoric that also are not compatible with the status quo big business model. So now the proof is going to be in the pudding about whether those kind of changes actually get made. And if they were changes proposed across the board, using existing authorities, things that the executive branch could do in their own capacity with respect to strengthening the Buy America policies, and Buy American policies, which has to do with the government using government procurement resources to shape the market. It included changes in the tax code, it included uses of the defense production act, for the government to create demand and incentives for changes. And it's really if implemented, could make some big differences. And now we need to see if it gets implemented.

Ryan
Another big item and you just mentioned this is the modifications the administration is made to Buy American rules. We've covered this at length in previous episodes. So listeners can go back and get even deeper into this topic. But maybe you could give us a quick introduction to what these policies are, and then talk more about what is being done and what hasn't yet been done in relation to the Buy American rules in the context of the pandemic especially.

Lori Wallach 
So again, here, the good news is the administration's executive order on Buy American and Buy America was quite broad. It covered all the programs, it covered a lot of the needed territory, and proposes to increase the domestic content rule for what qualifies is Buy American, which right now is just 55% of the value of a good needs to be American made, which is pretty pathetic. But unfortunately, it didn't really close the biggest loophole. And that is even that 55% rule is waived entirely with respect to any government procurement over a certain threshold value. That's about $180,000, which for the federal government means most of the contracts, most of them are bigger than $180,000. Because under our trade agreements Buy American is waived for 60 countries that have trade agreement, procurement agreements that basically guarantee that these foreign countries, companies and products get treated as if they were made in the US for Buy American is called the Trade Agreements Act waiver. And it is the exception that eats the rule. And the way that works is not only to goods from Hong Kong, which now is China and from Mexico and Japan and Korea in all of Europe, not only are those treated, Taiwan, treated as if they were from the US, and the government gives equal credit, equal purchasing priority to those goods, but almost worse, any good over that threshold, the domestic content rule is waived whether or not that country has a trade agreement. So that means that all that has to happen is the last step in processing has to happen in America. And there are companies have gotten that so skilled in doing this, that they basically like can construct the better part of a whole building, with all of its walls poured the plumbing in there, the electrical in there, different pieces of you know, built-in furniture in there, they ship those on barges. And then as long as like the whole building is put together all that content, all that value, that is considered meeting the Buy American rule for all of those goods that are in that building or with respect to Buy America. That is the final assembly is happening here now Buy America is stricter than Buy American. So I don't want to simplify this. I want everyone who wants to know the details to go to a website at tradewatch.org and go to the procurement section, and we have a memo that lays out all of these issues and where the gaps and flaws are. But the thing to know is that the executive order like Trump's executive order, I'm Buy American doesn't close this huge loophole. And that's a problem. The President did say that they would as a candidate, that they would be closing these loopholes. And in some of his initial statements, they said that they would and now the executive order doesn't. What the executive order does do is ask for a bunch of data. And there's a hearing this very week about what the flaws are and the current data keeping, because it's so sloppy, we don't really know what is really domestic versus what is just assembled here without domestic content versus what is from one of the 60 countries versus what is domestic content and assembled here. So it's really hard to know what's really going on. And as a result, the data makes it look like there's less of a problem than we know that there is. So with respect to the Buy American and Buy America rules, that executive order is one big piece. The other big piece is the infrastructure bill. So the house infrastructure bill explicitly didn't prioritize that trade agreement waiver, but the Senate version does. And now there's a lot of pressure to just use the Senate version, because the vote was so narrow there, and it almost didn't pass at all, the Senate version does expand Buy America. That's the construction money, and it has it go to a lot more programs and my going down to the states. And that's great. And it strengthens the rules with respect to us made iron and steel. And that's great. But it doesn't really fix the Buy America problem. And it doesn't fix the waiver there. So there's a lot more work to be done there. And there is, you know, enormous opportunity in the existing statute where the President just like President Biden can do this. Now President Trump could have and didn't, can use existing authority to simply waive that trade agreement exception, the President can just take that away. And that would certainly be something that would be smart. And if you again, go to our website, tradewatch.org, you can see letters from very senior members of the House and Senate urging him to do that very thing, President Biden.

Ryan
So my final question also involves reports and data and things you can find on the Public Citizen website, which is the fact that, so a lot of these measures that we've been discussing haven't been fully enacted yet. And so the trade data, the deficit report still shows a rising US trade deficit in manufactured goods. So the reason analysis on the website on the Public Citizen website, suggested 2021, could actually be a record high. Can you talk about the Census Bureau's trade data report? And some of the things you found those meaningful in it what's in the analysis that we published?

Lori Wallach 
Here's the thing for folks to know, it looks like the 2021 annual trade deficit could top $1 trillion for the first time in US history. And that's just horrific and astonishing. However, that says something different than what you'd normally expect, which is to say what that says most and this is where our analysis points out, is that the US has had an economic recovery from the COVID recession that is faster and broader than most other countries. So we're actually our consumers have started to buy stuff, our demand has increased. At the same time, Ryan, as you just pointed out, these initiatives by the Biden administration, which is you know, been in office for seven months now have not had an opportunity to go into effect. So to the extent that the US has had an economic recovery and people want to buy stuff, the supply chains still are largely those old ones. So there aren't, you know, yet great opportunities. If the supply chain review brings those names supply chains home, if the Buy American and Buy America improvements actually happened with a waiver closed, and as a result, there's more domestic government demand for goods. And as a result, there's more investment. And as a result, there more opportunities for folks to be able to buy American made everything, then that change hasn't happened yet, even though the demand is picked up. So as a result, what we see is our imports are way up, because we want to buy stuff, but we don't have it domestically made yet. And you know, please at the Biden administration falls through so that in a couple of years, that data doesn't look like that. At the same time in the rest of the world, there still is much more of a recession going on. So our exports stayed down, there isn't demand for our stuff. And because we have demand here, our imports go up. And so we have a pretty whopping trade deficit. The COVID phenomenon, and the economic implications of it really are overshadowing what otherwise we could see in the trade data. Because for instance, there's another indicator about manufacturing, it's a study that is done that, you know, every month looks at sort of the projections for supply chain and manufacturing. And that and domestically, and that is that that number is up that's that's doing fairly well. So normally, you wouldn't see that number go up in the trade deficit go up at the same time. But that is that is the COVID effect. I think we're all incredibly impatient to see the horrors of the COVID lessons about hyperglobalisation quickly translate into more domestic investment, more domestic manufacturing, more resilience, more reliability. For all of us more good manufacturing jobs, the proof is going to be in the pudding over time, and the Biden administration is going to have a fight in its hands with all these corporations that want to do the same old, same old, you know, "China's too expensive, let's make it in Vietnam," kind of agenda of manufacturing. And I think they're going to stick to their guns only if we really all are pushing to make that happen. Because the counter push is going to be enormous. And there is a lot of inertia of this old system. But I think what we see in what the Biden administration's supply chain reviews and what they Buy America order is showing, is there a lot of people in there now, unlike any pastime, high level Biden administration officials, who deeply understand the problem, and really do you want to change and as frustrating as it may be, that's not going as fast as we want, are there parts of it that aren't done. It behooves us all to basically make common cause with those allies, and really push hard to try and help those folks in the inside who want to make these changes because it's a unique opportunity. It's the first time in 30 years of my doing this work that that possibility even exists, and so we need to make it work for us.

Ryan 
You can check the description of this podcast for links to both of the reports that we discussed in the episode. Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 36: U.S. Inaction is Enabling COVID-19 Variants to Spread

The world celebrated when President Biden announced the U.S. would support a temporary waiver of World Trade Organization “TRIPS” intellectual property barriers to boost global production of COVID-19 vaccines. But months later, Big Pharma’s monopolies remain. 

The administration has failed to deliver on the waiver or to get vaccine makers to share their recipes. That means dire shortages of vaccines continue and with the vast majority of people worldwide exposed, COVID is on a murderous, variant-spawning rampage.

Now the delta variant first detected overseas is burning through the U.S. Public health experts are warning that lockdowns and perhaps other measures, like postponing in-person learning, may be necessary. The U.S. must act now to end the pandemic. Every moment of further inaction enables COVID-19 variants to develop and spread.

Take Action: rethinktrade.org.

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Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan
Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Lori, on May 5, the Biden administration announced its support for waiving TRIPS intellectual property barriers for COVID-19 vaccines at the World Trade Organization. As we've detailed in previous episodes, a waiver proposed by South Africa and India would help facilitate more production of COVID-19 vaccines, tests and treatments around the world. By reversing the Trump administration's block against the waiver, the administration created momentum for it to be adopted at the WTO. But today, three months later, the deal is not done. And with the Delta variant spreading rapidly, pressure is mounting on the administration to do more to make the waiver a reality. What is the current situation with the TRIPS waiver? And why are groups urging more to be done,

Lori Wallach
Just to remind folks TRIPS stands for the agreement and trade-related aspects of intellectual property. It's an agreement enforced by the WTO that all of the WTO is members, 160 countries are obliged to give Big Pharmaceutical companies monopoly control. So for instance, right now, a handful of companies are deciding if and when vaccines are made, there's a dire shortage as a result, a few companies have the powers over how many tests are made and treatments that are critical to saving the lives of people with COVID. So this waiver is urgent, and not a dang thing has happened. And that is where it is. So two things are going very wrong. One, on the one hand, the binder administration on May 5 did a historic thing and switching sides, having the US be on the right side of history and joined 130 other countries calling for this temporary waiver of these intellectual property barriers in the face of this unprecedented 100 years health crisis to try and save lives, it was exactly the right thing to do. But since then, the US has not really shown the kind of leadership that in the past has been shown at the WTO or other international negotiations, when there really is the US on a mission to get it done. Now, it's tricky, because the WTO is a place where if big developed countries too heavy-handed, it can backfire. But there is sort of a Goldilocks position not too hard, not too soft, just right. And we're not there yet with the US is leadership to try and get the deal done. On the other hand, the European Union has come in like gangbusters to mess the damn thing up. So Germany is leading has pushed the European Union, which operates the WTO is a block to oppose a waiver. And they have been strategically obstructionist. They have been merciless, they have been impossible. And instead of the US basically meeting fire with fire, the US has been fairly passive. And so the situation now is more or less Germany with the UK and Switzerland kind of hiding behind the German government, which has ginned up the whole European Union is blocking 130 plus countries that see this urgent waiver as necessary, not sufficient, there's more, but necessary to start to scale up the needed production of vaccines, tests and treatments. So what's happening now is basically Germany needs to get the hell out of the way, at this point, it is becoming a Germany versus humanity problem. This is not good history, this is not good luck. They just need to get out of the way. And then you've got the US, which needs to step up and help lead with some of the countries like South Africa and India that have this initiative in the first instance, towards getting a deal because three months of so-called negotiations have led to nowhere since the US switch sides and the US showed amazing leadership and getting some of the other small but powerful bloc of countries to stop blocking. So Japan came inside and Mexico and Canada, they're a bunch of countries that were doing the wrong thing and the US got that fixed, but they still have not been able to deliver the deal. And President Biden and USTR Tai were spot-on. The number one priority needs to be to save lives. And right now it's not just lives overseas, as important as it is that tens of millions of people could die needlessly. To put this in perspective, of the 4 billion and change vaccines that have been produced and used 85% of them have been used by just 10 countries. So if you're in the US and you're hearing this, you're getting scared about Delta, but you've had some months of having a sense of security of having some sense of the vision of what could be normal. There are dozens of countries that haven't a single shot available, and most of Africa's below 10% immunized is not supposed to be getting a full set of shots under the current production capacity until maybe 2024. Which, you know, just to be very narrow-minded. What do you think the Delta variant in any other variant is going to be coming from but from where the Coronavirus is raging? It is killing people and it is cooking up at some point a vaccine-resistant variants. So when people say no one's safe until everyone's safe, they just a slug. So we just need to get the TRIPS waiver done like two months ago as the critical first steps that we can get more vaccines, tests and treatments made around the world and end the damn pandemic,

Ryan
You were just talking about the Delta variant. We've talked about the threat of variants in the past. And that's been one of the things we've been saying about the TRIPS waiver that it would help prevent them from emerging and spreading in the first place. Now we're seeing the reality. The Delta variant is obviously threatening to bring about a new round of mask mandates and lockdowns in the US and elsewhere. Can you talk a bit more about the issue of variants and the TRIPS waiver?

Lori Wallach
So here's the deal. Variants emerge naturally out of viruses, but they need a place to be created. So the virus has to be replicating, that's when you get variants. That's where you get mutations. And if there are vast numbers of people who are infected, if there are raging outbreaks, it doesn't just kill tens of millions of people who do not need to be losing their lives at this point, because there is a vaccine, even if the vaccine, like with the Delta variant can't stop an infection, it's proving to keep people from being hospitalized or from dying. Most of the world is now in the face of huge third-wave, raging outbreaks, and just not being covered here. So the horrors that we saw in India, that's right now in Indonesia, that has been in Peru and Nepal and Pakistan, it is all over Africa. People are dying, and they have no vaccine, they have no treatments, and they're totally unprotected. And in the midst of all of that, death, destruction, economic wreckage, new variants are also breeding. And the reason why is the virus is trying to make itself better, stronger, more likely to spread and continue on. So these Greek letters, now we've heard about lambda, they are four significant variants that have basically been developed because there have been outbreaks where the virus can mutate. And then the new version can spread. And as we saw with Delta, if it's much more infectious, it just takes over. And so we practically greedily thinking just about that handful of countries have vaccines, we the privileged to have vaccines have equal interests as the person who doesn't have them in the entire world getting vaccinated. Because as long as there are raging outbreaks anywhere, there are going to be variants until there's a variant that literally gets all the way around the vaccine makes you really ill, kills people at the same numbers, and then we're going to be on global lockdown again and back to scratch. So whether you're motivated by the self-interest of not getting back to that situation, or you are horrified by the prospect of all these needless deaths, or it's a combination, it is in everyone's interests in the battle of vaccines versus variance, to get enough vaccines to wipe out the hot spots where massive new variants will develop and spread worldwide.

Ryan
And I haven't met many people who are not upset when they hear about this stuff, what needs to happen now, you know, what can get us out of this mess?

Lori Wallach
So at this point, I think the only thing that is going to change the circumstances is if people in the developed countries who've been privileged to have the vaccines and who now are the seat of Europe blocking the waiver, and the US not leading strongly enough to get the waiver. People in the rich countries need to reactivate the campaigning that, for instance, in the United States led to this amazing outcome of having the US for the first time in history, put people's health and global health ahead of Big Pharma. People did that. The President obviously has a strong moral compass in his Catholic social justice, faith-based value of caring for people's lives around the world. That is for sure with the president. But amongst many different things that were clamoring for attention, many crises, it was public attention and demand that helped make this wave or something, then in May, with all the other things demanding a president's time the President supported, and we're just gonna have to gear up another campaign at the same level, because a lot of other things are sucking up a lot of the oxygen in the room. And people in the White House, people across the country need to basically have this rise back up. And then sadly, I think the Delta variant is part of how that's going to happen anyway. But you know, as we're thinking about what can make a difference, the answer is not, "Oh, we all should get a booster." The answer is we need to get that third shot that we will be taking unless you're super immune-compromised super all there's some real reason you need it, that needs to go into an arm and someone in one of those countries where there no vaccines, and then we need to make a ton more vaccines. That's the bottom line. There are three ways this can happen. This is not rocket science. This is a question of people power. Step one. on leash the intellectual property, get the barriers out of the way. That is the waiver of the WTO rules. Simply get rid of these barriers temporarily so that it is allowed around the world to make more of the vaccines, treatments and tests. Number two technology transfer. What does that mean? It means the difference between someone giving me the piece of paper and saying legally, okay, here's the IP waiver. Here's a list of ingredients and you have the right now to take my information that previously was under monopoly control, and you can do it too. But he was cooked anything with the recipe knows listening gradients isn't sufficient you need the how you do it, what is the order of it, what you stir with what where does the egg beater come in? And so the technology transfer is that part of the recipe, where it says here is how you make, for instance, these mRNA vaccines, which actually are the easiest to scale up, because they don't require the enormous specialized like vats that you need to brew certain kinds of virus-based viral injections. units in your chemistry, you need clean manufacturing could be in a computer chip factory, it could be in another pharmaceutical factory, but you need the technology. So that's a matter of being able to do that as Moderna's chief scientists said is getting lines up in three to four months, not taking a year to reverse engineer how the hell you put the ingredients together. So number one TRIPS waiver, liberate the intellectual property. Number two, to speed up the production technology transfer. And by the way, the US government paid a lot of money to Moderna to Pfizer, to J&J. And there is, particularly with Moderna, even government patents in the vaccine. So there is leverage the Biden administration needs to exercise it is basically to say, guys, we'll even compensate you for some of this, but you just have to share the know-how. And then number three is just a good old cash money to basically scale up the manufacturing. And what is clear is this has to happen in hubs around the world, we don't have the capacity and make it out here and ship it there. Besides the fact, we all know how that will go. As soon as there is a real scare here, no one is going to be willing to send the stuff made here or there. So yeah, we need to increase production here both for more capacity for our own use. And then we can make some more and send some more. But there needs to be production capacity around the world. And the good news is and every part of the world there are companies that could do it. Some people say at this moment, there are 2 billion doses not being made were the IP liberated and the technology transferred, that could be online in the matter of months. But even more production needs to be set up. And so for instance, Public Citizen did a study, and for $25 billion, 8 billion more doses could be constructed by either retrofitting existing facilities, or adding new lines to existing clean manufacturing facilities, which again, that's all you need for mRNA. You don't need the huge vats, etc. and that work is going to take cash both for the construction, but actually the thing that's the most expensive is just the inputs. So as Professor Joe Stiglitz, the Nobel Prize winning economist says if you can get the IP barriers out of the way, the market can solve for a lot of this. So if you need more inputs to make mRNA vaccines, you need more lipids, you need more glass vials, as soon as you liberate the IP and get the technology transferred so actually, there is a demand for all that stuff. The market will solve for making more but but it's going to take money. So wave the IP transfer, the technology, manufacturing that is funded and distributed around the world. That is how we get the hell out of this disaster. That is the only way we're going to stop this pandemic. And the way to make that happen is only going to be people power. Pharma has no interest in this. The pharmaceutical companies are right now have a monopoly on these vaccines. They're not just thinking about their greedy boosters for $150 a shot, which Pfizer's literally said that's what they're going to do; not the 20 bucks a shot, that they're now charging for pandemic pricing vaccines. It's not just the vaccines where they hope to make the $150 booster shot, which is what Pfizer is on the record said they're going to do and replace $150 shot with for the $20 pandemic pricing original vaccine. It's also because these handful of companies want to corner the market, have a monopoly on this platform of mRNA with respect to cancer cures and AIDS cures and, and malaria, and the greed of thinking about these future profits over the prospect of tens of millions of people dying and never getting out of this cycle, this vicious cycle, which is profitable for Pharma to have a new variant that needs new boots so that they can then sell to the rich people. But that that is like that has no future for our world. So the one-two-three stops, people power is going to make it happen. And the very first thing I recommend is join all these organizations nationwide, that have sort of hit that basta point where it's like enough already, the Biden administration needs to step it up. And in the US there's a big petition drive and their visits with members of Congress has a lot of activity going on. And in Europe, led by the Germans same things going on basta, we've had it! The EU needs to get the hell out of the way starting with Germany and that transatlantic people power given the leadership's already come from the developing countries and their governments. That's how we're going to get this done.

Ryan
And if you check the summary of this podcast, there are links to some of the actions that Lori just described. Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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XL Pipeline Absurd $15 Billion NAFTA ISDS Claim  

By Noa Levin, Daniel Rangel

TransCanada Energy (TC Energy) announced on July 2, 2021 that it would be filing a legacy North American Free Trade Agreement (NAFTA) claim under the Investor State Dispute Settlement (ISDS) system, seeking US$15 billion in compensation for the Biden administration’s revocation of the Keystone XL pipeline permit. While the United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA, gutted ISDS between the United States and Canada, the parties agreed to allow a three-year post-termination period for “legacy” claims arising from investments that predate the entry into force of the USMCA. This is the basis for TC Energy’s claim.

A review of TC Energy’s annual fiscal reports reveals that $15 billion is an arbitrarily large damage claim, completely unrelated to the value of investments made or the actual hit that the company is assuming from the project’s cancellation.

TC Energy claimed in their 2020 Annual report that the carrying value of the Keystone XL plant, property, and equipment was US$2.2 billion, and the carrying value of associated projects was US$0.2 billion (a combined carrying value of US$2.4 billion).[1] This carrying value, which represents the asset’s worth (measured by taking its cost and factoring in any depreciation), underscores that the Keystone project was valued at only US$2.4 billion prior to its cancellation. In 2016, when TC Energy launched its first ISDS case against the United States, the corporation  claimed that it had spent US$3.1 billion on the project. It is apparent then that the company did not undertake any substantial further investment after then-President Trump issued a new permit in 2017.

Now, this does not mean that the actual “damage” caused to the Canadian firm ascends to US$2.4 billion. The project might have been cancelled, but TC Energy could sell or repurpose many of the assets initially devoted to the pipeline to reduce the financial burden. As a matter of fact, it seems that this is what has been happening since. In its First Quarterly report of 2021, TC Energy reported that the cancellation of the Keystone XL pipeline led to an after-tax asset impairment of US$1.8 billion.[2] In other words, the cancellation of the project resulted in a financial hit of US$1.8 billion for investors.

This is considerably smaller than the $15 billion demanded through ISDS. Yet, this number must be reduced further because TC Energy did not finance the pipeline alone; a significant amount of funds came from outside investors, most notably the Government of Alberta, which invested approximately US$1 billion in the project.[3] Excluding these external investments, TC Energy reported a personal financial exposure (loss) of US$0.8 billion.[4]

So, while it is demanding $15 billion in compensation from U.S. taxpayers, TC Energy actually took a financial hit of US$0.8 billion from the cancellation of the Keystone XL pipeline.

In a nutshell, TC Energy expects to get 15 times more money, coming from taxpayers’ pockets, than the asset losses it experienced from the revocation of a permit, that was already denied twice. Rather, the $15 billion reflects what the corporation in some way gauges to be its expected future profits. Or, to put it another way, $15 billion is the corporation’s projected return on an investment that generated widespread opposition across potentially impacted communities in the United States.

Are more reasons needed to swiftly and definitively end ISDS? 

 

[1] In Canadian dollars, these values are $2.8 billion, $0.2 billion, and $3 billion respectively, using the December 31, 2020 exchange rate of 0.7875 USD for 1 Canadian dollar.

[2] Or 2.2 billion Canadian dollars, using the March 31, 2021 exchange rate of 0.79601 USD for 1 Canadian dollar.

[3] $1.3 billion Canadian dollars, using the March 31, 2021 exchange rate.

[4] $1.0 billion Canadian dollars, using the March 31, 2021 exchange rate.

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Rethinking Trade - Season 1 Episode 35: NAFTA Keystone XL Pipeline $15B ISDS Attack

Within hours of taking office, President Biden revoked the permit for the controversial Keystone XL pipeline. The project, which would worsen the climate crisis, also posed major health and safety risks to indigenous people whose land it crossed. Now the Canadian corporation that wanted to build the pipeline is using a NAFTA Investor-State Dispute System (ISDS) tribunal to demand $15 billion from U.S. taxpayers.

ISDS allows multinational corporations to sue governments before a panel of three corporate lawyers, who can award unlimited sums to be paid by taxpayers, including for the loss of expected future profits. A years-long civil society and labor campaign got the original ISDS rules whacked out of the revised NAFTA. But that fix is phased-in over three years. This means legacy cases like TC Energy’s can be launched until 2023.

In this episode, we look at the Keystone XL NAFTA ISDS case, the new rules governing investor rights in North America, and the future of the ISDS regime.

Learn more at rethinktrade.org.

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Music: Groove Grove by Kevin MacLeod. 

Link: https://incompetech.filmmusic.io/song/3831-groove-grove

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

 

Ryan 

Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Lori, earlier this month, a Canadian company called TC Energy filed a claim for $15 billion in compensation from the US government for allegedly violating the terms of the North American Free Trade Agreement's Investor State Dispute Settlement system by revoking the permits for the infamous Keystone XL pipeline. Now in our last episode, we looked at the revised NAFTA, now the USMCA, one year after it went into effect. One of the big victories in the fight around the USMCA was the gutting of ISDS. But before we get deeper into what ISDS is, how it works and how a case is being launched, even after the USMC went into effect, can you just tell us about what this case looks like and what it could mean for the US and for US taxpayers.

Lori Wallach 

So as you said, this corporation is demanding $15 billion with a "b" in US taxpayers money to compensate them for the denial of their special rights as foreign investors under NAFTA, because they are claiming that the future expected profits that would accrue from this XL pipeline had it gone forward, with some up to $15 billion, and that they have a right as a foreign investor to be able to complete this project. And if any US government action stops it, we taxpayers have to compensate them. That is the infamous Investor State Dispute Settlement system, which grants rights to foreign corporations to sue the US Mexican or Canadian government. Before a panel of three corporate lawyers. The lawyers can award the corporations on limited songs to be paid by American taxpayers or Canadian taxpayers or Mexican taxpayers, including for the loss of their expected future profits. And he's from corporations only need to convince the lawyers that a law or a safety regulation or in this case, a permit for a dangerous pipeline violates their NAFTA rights. The decisions are not subject to appeal, and the amount awarded has no limit. And this part of NAFTA was largely eliminated with respect to Canada, it was simply ended. And with respect to Mexico, the worst features were eliminated. However, those new rules phased in over three years. So this is what is called a legacy case, we are one year into the new phase and two more years to go. So this case can still go forward.

Ryan 

And for the listeners, we covered a lot about ISDS. In our 10th episode of the podcast, when there were lawsuits being threatened to keep factories open during the early days of the pandemic, I would encourage you to go back and listen to that episode. But Lori, let's get a little deeper into the ISDS system. And then also let's talk about how it was gutted from the old NAFTA, we can talk a bit about the campaign. And then you already introduced us to the legacy cases. But maybe you could explain a little bit more about what a legacy case is and what the phasing looks like.

Lori Wallach 

So legacy case just means that a corporation still has a certain number of years as the investor state Dispute Settlement system phases out of NAFTA, to be able to still bring cases and it's three years one year down. So legacy cases, basically using the old NAFTA provisions before they phase out. And the process basically, as a corporation gives notice from an intent to file what is officially in arbitration. Only the corporations can start these cases governments can't sue the corporations for bad behavior. The rights are only for investors to attack governments and their regulations. And once an investor starts a case, if it's within the three-year phase-out, even after ISDS phases out the case goes forward. So it is a very pernicious facet of NAFTA. And it's a from our perspective, too long of a transition and getting rid of those terms. There are questions about the standing for this case and there will be legal fights about whether or not particular rights were denied. The problem is the decisions get made. by three ad hoc, appointed just for the case billing by the hour corporate lawyers, and these mainly men make their money by serving on these tribunals. And only the corporations can start the cases. So there's a deep financial incentive to rule for the corporations because the corporation's get to pick one of the judges, the three of them, the corporation picks one, the government picks one, and then those two have a third. So it's a club where you're likely get picked by the corporation and the corporation's one that starts the cases if you rule for corporations. So very few of the people, the corporate lawyers who specialize in these kinds of cases, and by the way, they built like $800 an hour. So even if they're going to eventually dismiss a case, it's in their interest for it to go for a long time, which is why on average, even in the cases, they're dismissed, governments pay between five and $8 million in legal fees, that's when they win. So it's a real scam. And it can't go away fast enough.

Ryan 

For many countries. I mean, for the US, the US can afford to enter the legal process around this lawsuit. But for many countries, much poorer countries, even the threat of one of these cases, might as well be one of the cases, right, like companies can often get what they want, simply by suggesting that they could launch a case.

Lori Wallach 

ISDS works as a threat because historically, so many of the tribunals and the corporate lawyers rule in favor of the governments. And for a lot of particularly developing countries, if they figure they're going to have to pay any way. They don't want to spend the extra millions fighting the case along the way. They'd just rather try and settle it pay off the corporation roll back the long question. And it's now developing countries that do that there's an infamous case where Canada reversed an environmental regulation banning a toxic substance. So that us Corporation, the Ethyl Corporation would end their lawsuits and part of the settlement was that Canada had to publish in newspapers around the world that this chemical is perfectly safe, and as well as long to be sold again in Canada. So it's a rough form of corporate bargaining, where the sword of Damocles is basically hung of the prospect of not just a lot of money and damages to have to be paid off by taxpayers, but years of litigation and millions of dollars in legal fees. It is, you know, a really outrageous and pernicious system.

Ryan 

And so there's two big things at play regarding ISDS in North America, specifically in the USMCA and the first of those legacy cases, which you described earlier. The second is the carve-out in the USMCA that maintains ISDS rules for a narrow but fairly important sector of industries. Can you talk about this carve out and what we need to be on the lookout for.

Lori Wallach 

So the carve out is an exclusion to the termination of the old NAFTA investor state. And it applies the old ISDS rules to contracts that currently seven us oil and gas companies have it's 13 contracts that were made under the old NAFTA that are specifically with one particular Mexican government agency that has to do with oil and gas exploration. And the rule is, as long as Mexico keeps Investor State Dispute Settlement, the old times with other countries whose firms have those kinds of contracts, then this carve out allows the US companies to have access to the same extreme corporate rights that their competitor other foreign investors in Mexico's oil and gas sector have. And it was, you know, that one of the, you know, really disappointing things that ended up marring what would have otherwise been incredible victory and ISDS. So when activists look at this rollback of ISDS, which NAFTA was the first agreement into which ISDS first trade agreement into which ISDS was inserted. So to have the United States which has been a great proponent, shoving ISDS in other countries and being a big benefactor and defendor have it, to have the United States say we're ending it with this country, and we're cutting it back enormously with this other country, symbolically around the world and powers a lot of other countries who are trying to exit this outrageous regime. But the sour aftertaste was that this carve-out meant with respect to those contracts and those companies indefinitely until Mexico actually decides to get out of ISDS which would be a very smart thing, then these us firms keep the legacy of the old NAFTA,

Ryan 

Sort of, as you were just alluding to Lori, there was a lot of hope when the USMCA was passed regarding the future of ISDS, not just within the context of the USMCA, but throughout the world. Obviously, NAFTA was not the only deal. It was the first, but not the only to have ISDS rules. What are some of the big fights ahead and confronting and continuing to dismantle ISDS globally?

Lori Wallach 

So a lot of very important developing countries have shown leadership and getting out of ISDS. South Africa started the trend. And then Indonesia joined in, Brazil has never had ISDS agreements. Bolivia and Ecuador both got out heartbreakingly now the right-wing government Ecuador is trying to get back in a lot of countries looked to those countries in the renegotiated its agreements to get rid of most of the pernicious elements. So when the US joined in as a main proponent, benefactor and defender of ISDS, and also a developed country, it was a super important impact worldwide where lots of countries want to get out of their investor agreements and/or if not get out of them altogether to roll them back to something more like the Mexico model. That is in the USMCA which, you know, like the India revised model requires a corporation to use up all of its domestic enforcement options before I can even contemplate going to a panel and then only allows direct exposure creation compensation as compared to all the fancy, silly made up rights, the corporation is jammed into deals like NAFTA and others. And so I think that with the Trump administration, which is you know, basically Donald Trump, a wholly owned corporate subsidiary, with right-wing tendencies, in addition, to make clear that even they thought ISDS was a bridge too far made it such that with a democrat Biden saying his trade agreements wouldn't have ISDS it's now become really the US position, that that old regime is no longer acceptable, tolerable, and that's good for us, that's good for the countries with whom the US would have trade agreements, but also opens up space for the many countries around the world that are smaller countries or developing countries to basically take the cover of the US taking that action with NAFTA.

Ryan 

Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 34: The USMCA, A Year in Review

On July 1, 2020, following a lengthy campaign by unions, civil society groups and congressional Democrats to win key improvements, the revised North American Free Trade Agreement, or United States Mexico Canada Agreement (USMCA), went into effect.

Unlike the original NAFTA, the USMCA requires its signatory countries to respect workers’ rights. And it has a special Rapid Response Labor Enforcement Mechanism. The revised deal largely gutted the disastrous Investor-State Dispute Settlement (ISDS) system. But recently-filed labor enforcement complaints and a “legacy” ISDS case with the corporation behind the XL pipeline demanding $15 billion from U.S. taxpayers provide a stark warning that if and how the USMCA improves life and work in North America will depend on activism in all three nations.

See Public Citizen’s analysis of the delayed phase-in of Mexico’s new labor justice system here: http://bitly.ws/dRnT

Music: Groove Grove by Kevin MacLeod. Link: https://incompetech.filmmusic.io/song/3831-groove-grove. License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

 

Ryan 

Welcome back to rethinking trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in house trade expert, Lori Wallach. In our recent episodes, we've been speaking a lot about COVID-19 and the world trade organizations intellectual property barriers, but today we're going to talk about the revised North American Free Trade Agreement, or the USMCA because it went into effect exactly one year ago. In addition to having Lori with us today, we're also joined by global trade watches Research Director, Daniel Rangel. Daniel has been leading a lot of our work around USMCA related labor and workers rights issues, specifically around the implementation of the new labor rights obligations in Mexico. Daniel is one of the lawyers who filed one of the first labor violations cases. Lori, why don't you start us off with a general overview of the labor rules that activists fought for during the Replace NAFTA campaign. And then Daniel, let's talk about the trade next case and the report you recently authored regarding labor reforms and implementation in Mexico.

Lori Wallach 

So one of the biggest changes between the original NAFTA and the revised deal was that Democrats in Congress forced Donald Trump to renegotiate his renegotiated NAFTA, to add a thing called the rapid response labor enforcement mechanism. And what that did is it allowed for actions to be started through petitions by unions or activists that the governments have to respond to that allow enforcement against a particular company with respect to certain specific violations. And the violations relate to obligations each country was required to implement, to, for instance, guarantee basic fundamental union rights to organize to collectively bargain to be able to have, for instance, Mexico's implementation required being able to have votes on your union contract and see it in advance or being able to elect your own officers of your union to make sure they actually represent you. And what this was focused on was the combination of the original NAFTA, having no real labor standards, there was a side agreement, it wasn't enforceable in any way. And the standards themselves were enforce your own laws. So Mexico's laws and the books were pretty good. The problem was they had been enforced for literally decades, such that what were called protection unions, were the vast mass majority of unions in Mexico and in protection union is one that protects the boss. So it's a union that basically the workers don't vote for. They don't elect that union or its officers, it signs contracts with the bosses that are intended to qualify for Mexican labor law requirements that you have a union contract, but the workers never approve it. Some of them don't even know there is a union. And then these so called unions make a lot of money off of getting deductions from the workers wages, to basically be partners with the bosses in keeping wages down. And that horrible collusion, which was just basically reinforced by NAFTA and all the investment protections that helped big US multinationals move down to Mexico to use that kind of exploited labor. That combination is a big part of why, you know, 25 years after NAFTA not only had Mexican wages not risen as NAFTA as original boosters promised, but in fact, they were slightly down, and certainly they were considerably lower than manufacturing wages in China. That was one of the things that had to be tackled, that was both horribly unfair to work as in Mexico, we're making world class products for global companies, and also as a contributing factor to over a million US jobs having been certified as having been offshored to Mexico under NAFTA. So the deal was stronger labor standards guaranteed of independent unions, and for the first time, some real enforcement, but what you have on paper you never know if you have in reality and that is why one year after that all went to a fact the real question, is it changing people's lives.

Ryan 

One of the situations that Lorijust described one of the specific examples of it is something if you listen to our show you've heard about before, which is the case at the Tridonex plant in Matamoros and You know, the situation regarding the labor lawyer who's been representing the independent union there, Susana preeto. Daniel, tell us about what has been happening at the Tridonex factory and also the case that you have lead regarding the violations of labor rights at the Tridonex factory.

Daniel 

Sure. Thank you for having me, Ryan. So basically, this all started in early 2019, when the President of Mexico and then Manuel Lopez Obrador decided to rise the wages across Mexico a 20% increase of the minimum wage. And when the workers in the northern part of Mexico wanted to have that increase for the wages, that was a right that they want decades ago, because that was a provision that was already in much of the collective bargaining agreements that were prevalent in Tamaulipas, when they decided that they want to ask for this increase. They faced repression and violence, not only from companies but also from the local authorities in Tamaulipas, specifically. So one of the ways in which workers decided to claim for the new rights was organizing through a dependent union that's called MOVIMIENTO 2032 that was born out of this struggle. Workers from many factories affiliated to this union, specifically, workers from Tridonex, who played an important role in the initial uprising. When the workers tried to organize independently, they faced a lot of repression, not only from Tridonex to company management, but also the management was parked by the local authorities that in Mexico are called conciliation and arbitration boards, and those are the authorities that Lori was mentioning before that have been colluding with for decades to repress workers and to undermine the rights. So what we have done, along with our partners in labor, both in Mexico, and in the United States, is to help them present a case before the US government arguing why this has been a violation of the labor rights that are recognized by NAFTA, by the new NAFTA, and consequently, making both the Mexican government and the US government to cooperate to try to find a solution. And if it is not possible to impose sanctions on Tridonex because it has been violating labor rights.

Ryan 

And how does this case tie into? You know, I know that there are now a few other cases as well raising the issue of labor violations under the new rules. There's also the issue of the phase implementation of the rules in Mexico. Why don't you talk about the report that you recently authored looking at the status of the labor reforms and implementation in Mexico and how those kind of relate to the Tridonex case,

Daniel 

The Tridonex case is a good parting point to explain why the stage implementation of the labor reform is worrisome. And is because a good deal of the labor reform in Mexico is related to the creation of new labor courts that will deal with the cases that are filed by unions and workers to fight for their rights. The problem is that in Tamaulipas, that is the state where treatment plans are located. This has been the state that is labeled as phase three estate. What this means is that there are not gonna be any labor courts and the new labor courts in this state until May, 2022. So workers will have to go to the old corrupt labor bodies that already exists, and that are not granting them the rights until at least May 2022, for an additional year. This is not only for Tamaulipas, but it's all for all three states that, together, they have half of the manufacturing output of Mexico, half of the labor conflicts that the country registers every year, and an overwhelming number of strikes per year. And that's the problem that we identified in our report on that we're trying to put the spotlight on so that authorities both in Mexico and in the US look for policy solutions to redress this.

Ryan 

And you can see that report at the link in the summary of this episode. Moving on from that, you know, another one of the big victories during the Replace NAFTA campaign, aside from the labor rights and implementation improvements, was the gutting of Investor State Dispute Settlement rules. While this was a huge moment in the fight For better trade policies, there are still ISDS threats looming across North America. I wanted to talk a bit about both trade deals under the ISDS rules and the situation regarding the gutting of ISDS under the USMCA. Lori, maybe you could tell us a bit about ISDS policies in general and how significant the USMCA is in the context of the ISDS status quo.

Lori Wallach 

So I want to start by reminding folks what Investor State Dispute Settlement or ISDS is, it is a system that empowers multinational corporations, to skirt domestic courts and sue governments for unlimited payments of taxpayer funds over any domestic law or policy or regulation court decision that a corporation thinks violates their special investor rights in a trade agreement or an investor treaty. And these cases are decided by tribunals have three corporate attorneys whose decisions are not subject to appeal, and the amounts they can order taxpayers to pay the corporations have no limits. So the North American Free Trade Agreement, NAFTA, which went into effect in 1994, was the first trade agreement that had this extreme system embedded into it. It basically was a mechanism under which corporations could threaten and or literally extract funds from countries for implementing laws that treat foreign and domestic firms the same. And under NAFTA, almost $400 million were paid out in attacks, on environmental policies, and on totally non trade related policies like bands of toxic substances and land use policies, and water and timber policies. And that system was really one of the most pernicious elements that corporate power rigging was one of the most pernicious elements of NAFTA, it also made an incentive to outsource jobs. Because if you took off and you went to any of the other NAFTA countries, you had more of an opportunity to behave badly. And if the government did anything about it, it was like having basically investor insurance, you could go raid the Public Treasury, if they if the government said follow labor law, follow environmental law, really the wrongheaded way of of having global policy. So the really exciting thing about the revised NAFTA, is that with respect to the US and Canada, that system was simply phased out. So we are now 1/3, of the way to the end of Investor State Dispute Settlement in North America, between the US and Canada. And so July 1 is, you know, we're heading down the road, it's really important because an enormous number of the cases where US corporations attacking Canada's better environmental laws. And when US-Canada, investor state goes away, that means that literally 90% of us investor state liability goes with it. So big improvement. With respect to the US and Mexico, the old ISDS system was replaced by a system that includes most of the reforms progressives have asked for, that, among other things, requires a corporation to actually use up all of its remedies that are available in domestic law and spend a bunch of years trying before they could even use the system. But more importantly, it replaces the old substantive rules where you could get money for almost anything, to literally compensation for actual taking of a property without compensation. And that is not what these cases are about, these cases are about a regulation that changes the use and undermines the expectations. And the way the compensation works, it's the difference between what a company thought they would make their expected profits and what they really make. So it's a big honkin deal. There is one big problem with that fix, which is there was an exception with respect to existing contracts in the petrochemical sector. So oil and gas, if a US company has contracts with Mexico, then if Mexico keeps this full investor state system with any other country that has companies with contracts, then there's a grandfathering of the old outrageous rights with respect to those legacy contracts. And that's super problematic, of course, because those kinds of companies are often the biggest players, some of the biggest money grabs a famous agreement under a US-Ecuador treaty is why the largest ones were oil company is the one that is attacking Ecuador and getting literally more than a billion dollars. So it's a it's a problematic exception, but relatively speaking, almost all the cases actually Have all the cases have happened to the old NAFTA couldn't happen under this new regime. However, three years to phase it in, and as much as we can celebrate, that means there's still three years for bad cases. And already in this first year, some of them have been filed. So there have been some, what we can call legacy cases, phase in period cases. So these corporations are scrambling to use these old corporate rights before they go away. And that's a problem.

Ryan 

You know, Lori, some of the things you just said about the existing ISDS rules under the USMCA what was good, but also the carve out and you know, the the phase in and how that presents these kinds of problems. And Daniel, you were talking about some of the phase in problems under the labor rules. When when the USMCA was passed, some, some are celebrating it as a model for future trade deals, and even a, quote gold standard. But I know Public Citizen, we saw it as progress to be built upon, but far short of a model agreement. We're going to ask you both how is the USMCA looking now after a year? And what does it taught us about the future of US trade policy?

Lori Wallach 

What the whole renegotiation of NAFTA told us is that the old US trade model, which was made worse and worse and worse, until you saw the Trans Pacific Partnership, which was horrific, NAFTA on steroids, is nothing sacrosanct. It is just one version. And it was a version that was not very widely supported. And so after all, the damage it did, it got replaced. Yet, the other thing that told us was, this is an ongoing process. This ain't the gold standard. This isn't the fix. The revised NAFTA is not the model. It was important steps in the right direction. And it fix some things and it tests out some important improvements. But there's a long way to go to get a trade agreement that is really worker centered, that is one that works first for people and the planet. And the whole fight over renegotiating NAFTA is basically from going in a way from NAFTA, which was like five layers below hell we got ourselves up to the surface, which is good. But we aint in any way in trade heaven yet. So there's a lot more work to be done. And we will see how well the changes and improvements in the revised NAFTA actually work because those are things from which we can build. But there's plenty of bad stuff that's still from the original NAFTA and some new bad stuff like rules that help big tech escape, being decent to workers, or that can trash our privacy, all that stuff get added in. So there's a lot further to go. But one very big thing I think this whole episode taught is that the old trade authority system, the so called fast track system, is just a total myth. Because the revised NAFTA was negotiated under so called fast-track. And ultimately, when it came back to Congress, and there simply wasn't a majority that was going to pass that agreement, fast-track or no fast-track, they made the administration go back and renegotiate renegotiate the deal. And it ultimately passed with such a huge supermajority you didn't need fast-track. So the theory of fast-track is you have to put handcuffs on Congress. Well, that didn't work because Congress made them renegotiate it. And then the second theory of fast-track is you'll never get an agreement through Congress unless you have fast track, and no one can have any amendments and debates are limited. Except the thing got the biggest majority of any trade agreement in the 35 years I've been working on trade. Why? Because when you actually include a broad set of interests and make an agreement that actually might work for working people, you have a broad set of members of Congress that are willing to give it a try and support it. So long way to go. Fast-track is not part of the plan going forward. And some improvements that need to be built on is the lesson for me.

Daniel 

As for me, I like to say that USMCA provides hints of what a pro-worker pro-environment trade agreement could look like. At the same time, it has worrisome elements as the ones that Lori was mentioned regarding digital governance that is dying, the states to conduct certain kinds of policies are very much still debated and in there. So now, I think that it is for activists and proposal makers to build up from the good terms that we got from USMCA and not go back to the day that corporate globalization model that has repeatedly shown its shortcomings over the last decades.

Ryan 

As this episode was going live. The company behind the notorious Keystone XL pipeline launched a new attack against the US under the USMCA is legacy ISDS terms. The company TC energy claims is due $15 billion in US taxpayer money because the US government rejected the proposed 875 mile pipeline that would have transported 830,000 barrels of highly polluting crude oil across indigenous communities and more than 1000 rivers, streams and wetlands. We're going to talk a lot more about that in the next episode, so stay tuned. Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org, you can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Victory: Pres. Biden and USTR Tai Announce that U.S. Will Support Emergency COVID-19 WTO Waiver of Big Pharma Monopolies to Boost Vaccine Access

By: Mariana Lopez

On May 5, President Biden and U.S. Trade Representative (USTR) Katherine Tai announced U.S. support for an initiative by 100 countries at the World Trade Organization (WTO) to temporarily waive intellectual property (IP) barriers to facilitate more production of COVID-19 vaccines globally.

“This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” USTR Tai announced. 

Under Trump, the United States and a handful of other WTO members blocked negotiations on this waiver from even starting last fall. The Biden administration was handed the opportunity to reverse Trump’s self-defeating blockage. Big Pharma lobbied (and will continue to lobby) heavily against the waiver, while a mighty civil society coalition, that Public Citizen helped to build and lead, waged an intensive campaign. On May 5, the administration sided with the people over Big Pharma.

This was an enormous victory that sends a powerful signal to the world by breaking decades of U.S. trade officials’ active promotion of Big Pharma interests over public health. In collaboration with Public Citizen’s Access to Medicines division, Oxfam, Partners in Health, the Association of Flight Attendants-CWA, Doctors Without Borders, Health GAP, Human Rights Watch, Amnesty International and the nurses and teachers unions, Global Trade Watch campaigned to counter Big Pharma’s team of over 100 lobbyists trolling Capitol Hill and pressuring the U.S. to remain on the wrong side of this issue.

Now, it is critical that U.S. engagement in WTO negotiations leads to the fastest possible agreement on a waiver text that encompasses all health technologies needed to end the pandemic, including vaccines, test kits, treatments, medical equipment and PPE. The pharmaceutical corporations want to protect their monopoly control of supply, in part, because as Pfizer briefed investors in March, they see great profit opportunities in producing annual boosters for sale at much higher prices in rich countries. Activists will continue to fight both domestically and globally to ensure that the scope of the negotiated waiver text does not only cover vaccines.

Background:

The WTO requires its 159 member nations to provide pharmaceutical firms certain monopoly rights in a text called the WTO’s Agreement on Trade-Related Aspects of Intellectual Property or “TRIPS.” These monopoly protections mean that pharmaceutical corporations control how much and where vaccines, tests and treatments are made.

This is significant because current production capacity can’t supply nearly enough vaccines, treatments or diagnostic tests to meet global needs. Most in low- and middle-income countries will not get vaccinated until at least 2022, and those in the world’s poorest countries may have to wait until 2024 for mass immunization, if it happens at all.

As we end the first third of the year, global vaccine production has not reached 1.5 billion doses, while 10–15 billion doses are needed. Creating greater supply capacity is critical, especially because COVID-19 vaccines may be like flu vaccines that must be given regularly, not a one-time shot.

While Public Citizen’s Access to Medicine program has been campaigning for the U.S. government to invest $25 billion in expanding U.S. and international production capacity, the Global Trade Watch program promoted another important part of the solution to these issues of capacity and global access. A temporary COVID-19 emergency waiver of some WTO TRIPS monopoly rights would help Global South producers, governments and researchers gain access to the formulas and technology to make vaccines, medicines and tests to prevent, treat and control COVID-19. The waiver was proposed by South Africa and India and supported by more than 100 WTO member countries, now including the United States. The scope of the waiver (whether it will cover more than vaccines) is to be negotiated, but the United State’s support of a waiver is a critical first step.

In every region of the world, there are firms with the capacity to produce vaccines, treatments and tests and greatly increase supply if the formulas and technology are shared. By refusing to voluntarily contract with these firms or issue voluntary licenses to qualified firms so they invest in creating new production capacity, vaccine originators like Moderna and Pfizer are effectively blocking sufficient supply from being made. Johnson and Johnson (J&J) did arrange a contract with South Africa firm Aspen to make their vaccine, but for months required that 91% of the shots be sent for sale in Europe to fulfil J&J contracts there. 

Beginning in January, GTW has built escalating pressure on the Biden administration to support the TRIPS Waiver:

Global vaccine apartheid could cost millions of lives, push tens of millions more into poverty and spawn mutated virus variants that evade vaccines. There can be no end to the public health disaster or economic crises anywhere if people in developing nations are not vaccinated. The announcement from the United States is something to celebrate, but the work does not stop here.

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First Labor Rights Claim Under the Revised NAFTA Filed by Migrant Worker Women in the U.S. -- What Does It Mean in Terms of the New Labor Rulebook in the Region?

By Daniel Rangel

The revised North American Free Trade Agreement (NAFTA) hints at key terms that a pro-worker, pro-environment trade agreement should include, thanks to the crucial engagement of congressional Democrats. In 2019, they forced Trump to renegotiate his initial 2018 NAFTA revision to meet Democrats’ demands. The final pact won unprecedented Democratic congressional support in no small part because of enhanced labor obligations enshrined in the agreement and its novel enforcement mechanisms that many hoped could improve the living conditions of working people throughout North America.

One critique made by some progressives was that the deal targeted labor conditions in Mexico, while offering little that could improve working conditions for people north of the Rio Grande — including labor protections for Mexican migrant workers employed in the Northern neighbors.

Well, it turns out that the first demand for enforcement action for failing to comply with the new labor terms is against the United States. The petition submitted on March 23 was filed by Mexican migrant workers, Maritza Perez and Adareli Ponce, and a binational coalition of organizations led by the binational organization Centro de los Derechos del Migrante, Inc. (CDM). Other signers include the American Federation of Teachers, the Association of Flight Attendants-CWA and the United Food and Commercial Workers International Union.

From the outset, it is important to point out that this submission is not under the labor Rapid Response Mechanism (RRM) that is viewed as one of the most interesting new provisions in the revised NAFTA. RRM allows challenges against specific companies and punishes them directly for violations. RRM enforcement only applies to claims about violations of freedom of association and collective bargaining rights, which are not the focus of this complaint. So, the first test run of the RRM provisions is still pending.

Rather, this submission to the Mexican Secretariat of Labor and Social Welfare is effectively a request that the Mexican government initiate what is called a state-state enforcement claim that the United States has breached the revised NAFTA labor rules by allowing gender-based discrimination in its H-2 non-immigrant worker visa program.

The 133-page complaint basically has four lines of argument.

First, migrant women are largely excluded from the U.S. H-2 visa programs. Through systemic, discriminatory recruitment and hiring practices, women are overwhelmingly left out of both the H-2A and H-2B programs. For instance, in 2018, only 3% of all H-2A visas (for non-U.S. citizens to temporarily work in agricultural essential activities) were issued to women, while women make up 25% of the U.S. agricultural workforce.

Second, the limited number of women who get admitted to the H-2 visa program are routinely funneled into H-2B visas, which are generally less desirable because of lower wages and fewer benefits, such as free employer-provided housing. The petitioners point out that the United States issues approximately three times as many H-2B visas to women as compared to H-2A visas.

Third, even within the less desirable H-2B program, employers generally assign women to less favorable and lower-paid positions than their male counterparts.

And fourth, women that participate in H-2 visa programs experience pervasive sexual harassment and sexual violence and limits to their ability to seek legal counsel.

According to the petitioners, the United States is in violation of its obligations under the revised NAFTA by failing to enforce both the new terms of the deal and its own laws that ban these kind of practices, including Title VII of the Civil Rights Act of 1964. Specifically, the case claims violations of the United States-Mexico-Canada Agreement (USMCA) Article 23.3(1)(d), labor rights; Art. 23.5(1) and (2), enforcement of labor laws; Art. 23.7, violence against workers; Art. 23.8, migrant workers; Art. 23.9, discrimination in the workplace; and Art. 23.10, public awareness and procedural guarantees.

Notably, the petitioners rely on provisions of the revised NAFTA and on U.S. domestic law to back their arguments. This speaks to the critiques about the new deal not protecting Mexican migrant workers. Unlike the original NAFTA’s labor side deal, the revised NAFTA’s Labor Chapter is part of the pact’s core text and contains “hard” obligations that are subject to the agreement’s dispute settlement provisions. This includes obligations on the elimination of employment discrimination (Art. 23.3(1)(d)) and on the protection of migrant workers (Art. 23.8). The original NAFTA’s labor-side agreement only mentioned these subjects as “guiding principles” that the parties were committed to promote without setting common minimum standards.

While the substantive standards give tools to organizations in North America to promote the enhancement of working conditions in the United States and Canada, including for migrant workers, there are no procedural guarantees a formal state-state enforcement action will proceed. Article 23.11 of the revised NAFTA obliges the parties to designate a contact point and to provide a timely response to written submissions related to labor matters. However, whether the enforcement process is launched is solely within the discretion of the government that has been petitioned. Thus, while the strong case made in the petition has advocacy value on its own merits, we must wait for the decision of the Mexican government on whether this will become a formal USMCA case and test if substantive protections for Mexican workers employed in the United States and Canada can be enforced.

Acknowledging the existence of migrant workers protections does not mean that the labor terms in the deal treat each country the same. This imbalance is particularly visible in the procedural requirements to activate RRM, alluded to above. A complaint can be initiated against Mexico based on violations of the right to organize and union democracy rights, under legislation that complies with conditions set out in an annex of the agreement. For all relevant purposes, this refers to violations of Mexico’s 2019 reformed Federal Labor Law. However, cases against the United States and Canada are limited to violations occurring after the National Labor Relations Board or Industrial Relations Board, respectively, has already issued an order, meaning that the issue already has been subject to domestic enforcement action. In practice, what this means is that there is an exhaustion of local remedies requirement to start a RRM case against the United States or Canada and there is no such requirement if the complaint is against Mexico. Furthermore, there is not RRM enforcement between the United States and Canada. 

So, what’s next on this petition? According to the revised NAFTA rules, the Mexican government has to consider and provide a timely response to the petitioners behind this brief, but it still has significant discretion about whether to proceed with state-state dispute settlement. If it chooses to do so, the first step is to start consultations with the United States to try to reach a mutually agreeable solution. If consultations fail, Mexico could initiate a formal dispute settlement proceeding and, eventually, impose trade sanctions against the United States if a panel rules that the violations indeed exist and that the U.S. government has not done anything to redress them.

Whether the Mexican government is likely to pursue this case at all or go all the way through a formal state-state enforcement case remains to be seen. Notably, earlier this year President Andrés Manuel López Obrador (AMLO) aired a proposal to create a Bracero style immigrant labor program to allow Mexican and Central American immigrants to temporarily work in the United States to fill labor shortages. Given that this complaint spotlights bad conditions for workers under existing U.S. visa programs for foreign workers, AMLO could try to leverage the case to promote his plan. However, civil society organizations, among them the lead organization behind the complaint, have sounded alarms about a potential Bracero 2.0 program, due to the exploitative working conditions under the original program during World War II.

In any event, the complaint represents many organizations’ intentions to test if the revised NAFTA’s labor terms could be an effective tool to improve workers’ conditions in the United States, in contrast to the current model that has primarily benefited transnational capital. Now, it is for the governments of North America to treat this case, and those that follow, seriously in order to make the revised deal a floor of decency for worker protection across the region.

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Rethinking Trade - Season 1 Episode 30: Deep Dive: How WTO Rules Protect Big Pharma Profits

Millions of people around the world may not get COVID-19 vaccines until as late as 2024 due to World Trade Organization rules that protect medicine monopolies for the Big Pharma giants. What do these WTO rules require? How do they implicate access to essential medicines? How do countries escape these WTO-imposed barriers that protect corporate profits for vaccines developed with boatloads of tax-payer money?

On this episode, Lori gives us a guided tour through the thorny thicket of intellectual property monopolies, the “trade” agreement rules that oblige countries to enforce them and the WTO waiver needed to boost production of COVID vaccines, treatment and tests worldwide.

Learn more at rethinktrade.org.

Music: Groove Grove by Kevin MacLeod

Link: https://incompetech.filmmusic.io/song/3831-groove-grove

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan: Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Lorie. Last week during one of our regular global trade watch meetings, you talked with us about some complex but fairly important details regarding medicine, patents, copyrights and international trade rules that impact vaccines and other medicines. This was in the context of the campaigning that we're currently doing supporting a call from over 100 nations at the World Trade Organization for a temporary emergency waiver to the WTO trips rules, which would increase global production of COVID-19 vaccines and treatments. So today, I wanted to ask you to basically give that talk again, only this time to our listeners. So if you're with me, let's take a deep dive into the world of pharmaceutical technology, patents, and copyrights.

Lori: The mission here is to get vaccines, treatments and tests to people in every country in the world. Because no one is going to be safe, the economy's not going to get back in its feet anywhere unless people are able to fight COVID everywhere. Right now there is the capacity to make about 4 billion doses of vaccine per year; 15 billion doses are needed. Governments have spent tens of billions of dollars giving it to pharmaceutical corporations to come up with vaccines. Yet the pharmaceutical corporations have monopoly control over aware how much, if the vaccines will be manufactured, where they can be sold, and at what price. And one part of the reason for this lunatic situation where dozens of countries have not had a single dose of vaccine. And many developing countries are not expected to have significant vaccination until 2024 is in part because of World Trade Organization rules in the trade-related aspects of intellectual property TRIPS agreement, these WTO rules require every signatory country to give very lengthy monopoly rights to corporations with respect to not just patents over say a medicine, but the copyright that goes to the computer program for the machine that makes the vaccine or that makes the ventilator work. And the design information about the machine that is used to do a key process and making the vaccine and what's called undisclosed information protections, which has both to do with some of the know-how about what needs to be done to make it work but also has to do with certain test information. And all of those protections are what South African and India now with 100 countries supporting them are asking is temporarily waived. So that those monopolies are suspended to the extent doing so is necessary to treat and to stop the COVID pandemic. And the campaign that's going on around the world is to get governments to support this because the WTO works by consensus. And so far the US has been one of the very few countries along with the UK, with Canada and the EU as a bloc that have been stopping this very important emergency change at the WTO and these trips rules, basically before have led to needless suffering and death. Because these extreme monopoly protections are the reason millions of people in Africa died in the 90s from AIDS. When in the US HIV diagnosis was the beginning of a chronic disease. You took antiretrovirals you had medical interventions that meant you could live a long life. And the US pharmaceutical companies wouldn't share the information. The countries in which these medicines were made fought what was then an effort to get these WTO rules suspended. And the result was millions of people died. Now in this circumstance, not only are millions of people going to die, but if we don't get this right, it's actually against our own national interest. Because if there is an outbreak of COVID any place where mutations can occur that is going to generate the variant that gets around the vaccines we've already had that puts us all back into quarantine that is more deadly but it's more infectious so really really for any of us to be safe we all need to get the vaccines the tests and the treatments.

Ryan: There's a few key terms and ideas and you talked about some of them just then Lori but maybe if you want to expand on a few of those that might help me and the listeners understand sort of the depth of what TRIPS covers when we think of medicine copyrights or medicine patent you think just oh the pill itself is patented you don't think that everything involved in dispensing it and storing it and all of these things is also covered maybe you could talk about some of that stuff and the differences between a patent and copyright when it comes to these kinds of laws. And then also i want you to get into talking about these compulsory licenses because that's a term that's being used a lot right now as some people are saying oh we can use compulsory licenses we don't need a trips waiver maybe you could talk about that and give us an understanding of what that even means how it works and if it's even applicable right now.

Lori: So one of the first things to know is that at the time i was describing with with the fight over hiv aids medications anti retrovirals typically those medicines had patents so a patents is a monopoly protection granted by a government it's like a license that protects an invention or discovery an idea effectively so if you created some new medicine and it wasn't it was what's called it's original it wasn't something someone else had done you can get this government monopoly right and a copyright protects original works of authorship so like for instance the way to think about how this comes together is at the time of the antiretroviral wto fight for hiv aids the medicines were basically protected by patents so at that time the fight was to make clear you could get what was called a compulsory license that is the ability for a government if a company will not allow a contract for a local manufacturer a monopoly patent holder you can force a license that's what a compulsory licenses you force a license and the license is literally the right to make that thing that is under the patent monopoly so let's just say I had the monopoly on come up with whatever it is medicine and you're in a different country Ryan and your country needs that you have come to me and say alright company and country a I would like this or I may be in the same country i would like to be able to make this medicine too and I would say, "Well I have a monopoly for 20 years it's a patent, go away I can charge as much as I want." And if you could prove an overriding national interest to health emergency etc, then you could go to the government say, "Hey, I've tried to get Wallach to give me this license I'm happy to pay for it but she ain't budging." And then they force it and they say, "I will grant you company, Ryan, a compulsory license to make company Wallach's drug." And the WTO fights in the early 90s was just to make clear that governments could do that because the big pharma interests were saying whoa under these WTO rules you can't even do that so the situation though got kind of more evil so the problem we have now is then there was a patent and then you would do a compulsory license if a company was being greedy. Now the companies that are what are called the originators so the companies that have made the product initially in this instance with the vaccines with literally tens of billions of taxpayer funds but related, but separate issue. So whoever has that intellectual property monopoly now their strategy has been to make what is often called a thicket of intellectual property protections. So instead of there being a patent on the medicine there is a patent on the medicine but then there is also a patent on the three precursor chemicals that were created that go into the medicine and then also the special whirlygig that you created which mixes up your components gets patented it's a machine and it's an invention and that gets patented and then you decide to make a special injector that is especially useful for this and can only your medicine can only be the shot can only be through your injector and that gets patented and then in addition your worldly gig is operated by a computer program and that gets copyrighted. And then also you have very specific rules about how the medicine can be transported and how it can be delivered and how it can be segmented and how it can be dosed. And that booklet gets copyrighted. And then in addition, you have a lot of know-how about the stuff that isn't just the recipe that isn't just here's how the machines engineering is done, that you try as these companies to get some kind of monopoly protection over as undisclosed information, you basically want to make it so it is basically nigh impossible for anyone to be able to make this but you so you control how much you control the prices. And these kind of IP thickets are what right now are like barbed wire around these vaccines. So that if these WTO rules that allow, that require all of these countries to have these rules in place, and allow this kind of mop monopoly protection, it will make it almost impossible for what needs to happen, which is production needs to be scaled up all over the world of these vaccines of these treatments of these tests. Because it's not just we need to get everyone vaccinated once it's going to be an ongoing process. And there is simply I mean, there's no way under the current paradigm, we are going to be able to get the volume, the supply, it's never the money issue. You know, a lot of the pushback from certain people in the US government officials in the US or EU is, "Oh, look, we're starting to give to these different funds that will be buying the vaccines for poor countries." And you know, it's good luck, there's nothing to buy, that's part of the problem, because the entire supply that exists is insufficient, and what is in existence has been already pre-ordered. So we have to have more made, which is why this WTO waiver covers the four different pieces of copyright because the compulsory license for a patent ain't gonna cut it, the thing that worked in the 1990s ain't gonna cut it. You have to have, to the extent it limits the treatment and crushing of COVID, you have to have temporary suspension, also of those copyright rules, as of course of the patent rules of the non disclosed information rules, you have to basically have the whole thicket, you have to have a very strong clipper to go through all that barbed wire and rip it out of the way. So more production can happen.

Ryan: How do these rules interact with our domestic laws? And what happens to them at the World Trade Organization?

Lori: So that's a very big kettle of fish generally, and as part of what is wrong with the WTO. But the short answer is the WTO has a requirement that is each country shall ensure the conformity of its domestic laws, regulations and administrative procedures, with the attached agreements. And that includes all those patents and copyright and other monopoly rules in TRIPS. So every country is obliged to have its domestic laws meet those rules. And if you don't, you can get hit with trade sanctions from another country. And also, frankly, without the blessing of the WTO, to have the changes that many countries want to make. Countries want to be able to help support domestic production, obviously, not every country can do it. But in every region of the world, there are companies in countries that could be making these vaccines and treatments and shipping in the region. And there's just endless stories of how having pharma monopoly control means no supply. There are just, you know, there's a company a very high tech company in Bangladesh, that's been begging all of the Big Pharma and Maderna and all the others to give them a license to be able to contract manufacturer, the medicine for distribution in Asia, the company that is currently having a contract with Johnson & Johnson in South Africa is obliged because Johnson & Johnson totally controls it, to export 91% of what they make to Europe, 9% can be sold in South Africa. So the keeping that monopoly control in your domestic law, when governments want to have the blessing of the WTO in the short term to take the policy changes without threat of sanction, but also effectively like the good housekeeping seal of approval, so that the pharma companies and other countries, don't threaten them with lawsuits, etc. Because you know, pharma can come into the domestic courts and say this is a violation of your obligations under the digit. They just need all of that cleared away, and honestly, also having the waivers enormous leverage, because there's been a lot of sweet-talking to Pharma, please do this please contribute that please share this and none of it's happened. None of it's happened. And so this is the stick, right? This is the stick this is if you guys don't start doing technology transfer, then we will use the rights under this WTO waiver to just do it on our own.

Ryan: Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org, you can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 29: Will Biden Build Back Green, or Import Green?

Our tax dollars should support green jobs with fair wages, not a global race to the bottom that exploits workers and poisons the environment. But thanks to corporate-rigged trade policies, “Buy American” government purchasing requirements are waived to include purchases from 60 other countries. This means our tax dollars are exported instead of being recycled at home to develop electric car and domestic solar, wind and other renewable energy manufacturing.

With the COVID-19 relief bill currently being implemented and another major spending bill on the horizon, the president must take a simple but important action to keep trillions in taxpayer dollars circulating in the U.S. economy to build a green future. Thankfully, the Biden administration’s Build Back Better plan acknowledges this as a problem for both climate justice and economic justice, but obstacles still remain.

More on this subject is available here.

Transcribed by Sally King

Ryan: Welcome back to rethinking trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Today, we're going to be talking about jobs, the climate and a major part of the Biden administration's plans for the country. Before we get into that, though, there's two things that need to be defined for me and for the listeners. The first one is Buy American. The second is industrial policy. Lori, could you give us a quick understanding of what these terms mean, in relation to the content we're about to discuss.

Lori: So Buy American is literally a statute from the FDR era, that gives preferences to domestic goods when the government spends money. So when the government procures cars or desks or paper or computers or phones, the law requires that the priority be in reinvesting our tax dollars into buying things made here, so that the money goes back into innovation and jobs in the United States. Industrial policy is a broad set of policy approaches that a government uses to incentivize the development of different sectors like manufacturing. Procurement policy, like by American is one tool of industrial policy. But other tools include tax policies. For instance, our current tax system incentivizes the offshoring of investment in jobs, you get a lower tax rate if you produce offshore, that's a choice. It's an anti-industrial policy, or sometimes industrial policy involves subsidies. So the government will give you a payment back if you buy an electric car, if you use solar on your roof, for instance, to try and incentivize certain behaviors with respect to renewable energy. And that basket of different tools many countries use and many developed countries like Germany, where its industrial policy for manufacturing, for instance, and involves tax policies involves educational policies to train workers and technical skills involves investments in research and universities involves incentives and subsidies and tax benefits to cluster different companies together so they can become a solid supply chain in a particular area. And all of those tools together are how the countries that currently are leading in different sectors have been able to do so. So the good news is that the Build Back Better plan contemplates renegotiating those parts of the trade agreements that effectively forbid us from using Buy American preferences by it's going to take a while to do that 60 countries now get that treatment, a lot of different agreements are going to need to get fixed, but a ton of money. And in fact, some of the main policy towards green energy, green auto sector infrastructure is all going to get spent is going to be allocated very quickly. And that is because there will be too big reconciliation bills, the one passed the COVID relief Bill $1.9 trillion. And the next one is going to have a lot of energy, infrastructure, etc, in it. And that is the Recovery Act, the COVID Recovery Act. And those are the two pieces of legislation that can get through the Senate with 50 votes, it's using a sort of arcane budget rule. But those are the things we know for sure are going to actually be the trains leaving the station versus the Republicans in the Senate can block a lot of other stuff. And so if the president doesn't use the authority the President has right now to do a special waiver. So that's that by American exception for all the trade women countries is not it needs to be chucked out just for the COVID spending. We can then go back and renegotiate for the regular spending the trade agreements. But in the short term, if the president doesn't use this special authority that he has, we'll end up offshoring those trillions of extra dollars including in the green energy green jobs, electric car sector instead of building instead of investing to build those sectors here. We'll just end up spending the money to import the goods from someplace else.

Ryan: You kind of hinted at some of this in what you just said. But President Biden's Build Back Better plan calls for some pretty huge investments in green technology as part of the path forward on both job creation, but also addressing some of the priority changes called for by the climate justice movement. A lot of people have observed that this is one of the closest things we've seen in a long time to having a wide-scale national industrial policy, and one that has both national and global implications. I wanted to ask you, Lori, how do Buy American rules play into the Build Back Better vision? And what are some of the critical fixes that need to be made to ensure that these rules can be used to support this initiative?

Lori: Over time, the Buy American policies that were established originally 80 years ago, have been eroded. And they've been eroded in two ways. One is that there are very loose rules about what can be considered American, you can have all the parts and components come from someplace else. And as long as it's assembled here, it qualifies under some circumstances. And so a lot of taxpayer money actually literally is being spent in goods made elsewhere. Another really big exception to the rule is that any country with which the U.S. has a certain kind of trade agreement gets treated all of its goods and services as companies get treated like they're American. So right now by American means by American plus goods from 60 other countries, it's all of Europe, it's Japan, it's Hong Kong, it's Mexico, it's Korea. And for all of those goods, there is basically offshoring of our tax dollars to buy those goods from other countries. And the hitch with the build back better plan is, it both recognizes that this is a problem, and for instance, talks about renegotiating a bunch of those trade agreement rules, which is exactly right. But the hitches a lot of the money is going to be spent through what is called the reconciliation bills, these two bills that only need 50 votes to get through the Senate are some of the only big policy bills that are going to go into place. The first one's already been passed. It's the COVID Relief Act $1.9 trillion dollars. And the next one is going to probably be focusing more on infrastructure and renewable energy. And if there's a big waiver to buy American with the trade agreements for all of that we're going to see a lot of the potential to harness that taxpayer money into a renewable energy future with good jobs being squandered.

Ryan: You were quoted in the Huffington Post recently, in an article called "How a Trade Dispute Between Two Korean Firms Could Jam Biden's Electric Car Plans." The article detailed a rather obscure case moving through the U.S. International Trade Commission's core system, that could have a big impact on some of Biden's Build Back Better plan. Maybe you can explain this case and how it shines a light on the necessity to transform our trade policies as we look towards other systemic domestic priorities.

Lori: So, the case in question is a fight between two Korean companies that make electric car batteries. And there is a piece of U.S. trade law that allows a private company to go to court and basically get an injunction a stop operating order against another company if they can argue that that other company is importing goods or is making goods that violate the intellectual property rights of the other company. So the one Korean company is saying that the other Korean company which is trying to open up an electric car battery factory in Georgia, the company number one is claiming company number two that's opening the new U.S. plant has stolen company number ones electric battery technology, and that it's violating its patent. And under this U.S. trade law, basically, the patent right of the foreign company trumps the goal of the Biden administration and getting a lot of electric vehicles and that supply chain built in the U.S., because it doesn't matter if it's a Korean company, or if it's a U.S. company, if the production is here, and the jobs are here and the supply chain is here. That helps promote what the bind administration is trying to do as far as the climate and jobs goals. So the there's been an original ruling by the International Trade Commission that is forbidding the second company to produce its electric car batteries, they can only do it for a certain number of years and then be shut down. And so there's now an effort by policymakers in Georgia and environmental groups to get the president to use authority to override the shutdown of this electric car battery plant.

Ryan: Last, Lori, for a big question. And that is, do you think the Biden administration will follow through on these promises? Or maybe more importantly, for folks listening to this podcast? What are some of the roadblocks that we need to work to transform to help clear the way?

Lori: My sense is that the administration actually intends to follow through. But it's not going to be a simple matter, because there are a lot of special interests that have enjoyed the existing system. Which is to say, obviously, the oil and gas companies have had all kinds of incentives and privileges in the tax code with subsidies, those have to be taken away. And then the green energy sector and electric car production need to be incentivized. And that's going to be a big battle. But something people can do right now is to communicate by email, by calls, if you're a user of Twitter, by Twitter, the message to your senators and your house members that you need the president to use the President's existing authority to do an emergency waiver of the trade women exception for Buy American, you don't want the big COVID relief and recovery bill money to go offshore. And you know, the easy way to say it basically is can you get the president to end the trade agreement exception for Buy American for the COVID money. That's the cleanest way to say it. So far, 13 senators and a bunch of House members have written to the president asking him to use that authority, it's very easy to do, the president just has to put a little notice in the Federal Register saying, "Hey, for this COVID money, the by American exception for trade agreements does not apply that money staying home -- we're investing at home." It's just a ploy question of getting that to be something the President actually prioritizes doing. Because if we have this unique opportunity with all these large pots of money to try and build the future green infrastructure green energy system, electric car supply chain that we need, both as a matter of having a livable planet and surviving climate catastrophe, but also to create new jobs and transition, have a just transition that takes into account people's livelihoods, then we need to have that money harness here. We've paid it in as taxpayers, we need to transform our economy, our jobs and do our part to protect the climate. And that means we need to make sure it's not all being offshored. Because, you know, the companies that got their original waiver to Buy American for the trade agreements, they always wanted to be able to get their big fat government contracts and to produce the stuff at slave wages offshore. And as a matter of climate justice and economic justice that has to end you want our tax dollars, then A: it's going to be green and B: it's going to be fair wages. So you're going to be having unions, you're gonna be making a lot of it at home, you're not going to be racing to the bottom, and we have control over that. And it's worth talking to members of Congress about that right now because the money starting to move.

Ryan: Rethinking trade is produced by Public Citizens Global Trade Watch. To learn more, you can visit rethinktrade.org You can also visit tradewatch.org. Stay tuned for more and thank you for listening

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