Rethinking Trade - Season 1 Episode 43: A New U.S. Approach to the WTO? MC12, Part 2
December 04, 2021
Music: Groove Grove by Kevin MacLeod.
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.
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.
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?
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.
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?
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.
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?
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.
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.