WTO Nations Agree to Ease Patent Rights to Boost Covid-19 Vaccine Supplies in Poorer Nations

The agreement will make it easier for developing nations to manufacture and export a patented vaccine

The member countries of the World Trade Organization agreed Friday, 17 June 2022 on a narrow measure aimed at boosting the supplies of Covid-19 vaccines in developing countries, wrapping up a bitter fight over corporate patent rights governing critical medical products during a pandemic.

The compromise measure on intellectual property rights will make it easier for companies in developing nations such as South Africa to manufacture and export a patented Covid-19 vaccine—under limited circumstances—without a consent from the patent holder if they have the approval of their own governments.

Meeting for the first time in nearly five years, trade ministers from more than 100 countries also agreed on measures to reduce fisheries subsidies to protect fish stocks and pledged to minimize export restrictions on food items amid shortages triggered by the war in Ukraine.

An existing ban on the collection of customs duty on digitally-transmitted products like music and movies was continued, to the relief of U.S. officials who had feared a possible change in the status quo would harm U.S. businesses.

The agreement on vaccines is a major win for WTO Director-General Ngozi Okonjo-Iweala, the group’s first female and the first African leader, who has pushed member countries hard in recent months to deliver deals at the ministerial meeting after the group struggled for years to produce new agreements. A former chair of Gavi, a global vaccine group, she made particularly strong efforts to complete the vaccine agreement.

“When I came and started this job, the expectations of the WTO were not very high…and heard words like dysfunctional and doesn’t produce,” she said at a news conference. “But today, we have shown that the WTO can produce outcomes and multilateral outcomes at that.”

The fisheries pact represents the group’s first trade agreement with new legally binding rules since 2017, even though it was scaled down from its proposal. It focuses on curbing illegal, unreported and unregulated fishing, while leaving out rules to phase out what experts consider the most harmful types of subsidies that contribute to overfishing.

The change to the intellectual property rules will likely have limited impact on actual production for now because a current surplus of vaccines globally means there is little demand among vaccine makers to increase output, experts say.

The existing intellectual property rule on pharmaceuticals includes a provision allowing companies to manufacture, for a fee, a patented product without the patent holder’s agreement under an arrangement known as compulsory licensing.

That imposes high hurdles for exports of products made under such a license. The new rule will pave the way for smoother shipments to developing nations facing shortages.

The measure is far less ambitious than the original proposal made by India and South Africa in October 2020 to ease severe vaccine shortages in developing nations. They had sought more extensive IP waivers including on vaccines, treatment and tests, drawing stiff opposition from the pharmaceutical industry and business lobbies.

James Love, the director of Knowledge Ecology International, a group that lobbies for making IP more widely accessible, said getting low-cost Covid-19 tests and treatments remains a challenge in many poor countries. He criticized the WTO for not covering them in the waiver.

“It is hard to imagine anything with fewer benefits than this, as a response to a massive global health emergency,” he said.

The pharmaceutical industry and business lobbies also criticized the deal, saying that the revision to the Trade-Related Aspects of Intellectual Property Rights agreement, or TRIPS, leaves the door open for new challenges to their IP rights with the next pandemic.

“Intellectual property rights helped deliver Covid-19 vaccines in record time, and today the world is awash in vaccine doses,” said Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber of Commerce, in a statement. “We can’t let this unfortunate measure set a precedent for undermining IP rights.”

The Biden administration came out in support of an IP waiver for vaccines last year, at a time when Washington was under pressure to share American-made doses with developing nations.

But in the ensuing months, the U.S. kept itself largely out of the vaccine negotiations, leaving the European Union, the U.K. and Switzerland to lead talks with India and South Africa.

“This agreement shows that we can work together to make the WTO more relevant to the needs of regular people,” U.S. Trade Representative Katherine Tai said in a statement. “The Biden administration will continue to work with WTO members, the private sector, and other partners to expand vaccine manufacturing and distribution to facilitate the global health recovery.”

Even as some of the deals announced Friday morning had been watered down from their original proposals to get countries on board, some delegates said the outcome exceeded their expectations. The meeting took place at a time when the pandemic and the war in Ukraine are driving a deeper wedge between Western democracies and autocratic governments in Beijing and Moscow—and are widening the gap between rich and poor nations.

Piyush Goyal, India’s Commerce and Industry Minister, said Thursday that the ministers were united “in the spirit that the outcomes of the [meeting] are being watched by the world as a signal that the multilateral order is not broken.”

Caught between the U.S.-China rivalry and the policy differences between rich and poor nations, the WTO hadn’t produced any broad trade agreement since 2013. Its dispute-settlement system is broken with the U.S. blocking the appointment of judges to its high court, complaining about what it considers excessive interference in domestic policy.

As India, with its strong positions on key issues, captured the attention of delegates, China, a party in many WTO disputes over its trade nonmarket practices, kept out of the spotlight. It escaped the criticism of Western governments in fisheries and vaccine deals by offering to refrain from benefits given to developing nations, even as it still classifies itself as such, to the ire of U.S. officials.

Friday’s package also included a new road map for working toward the overhaul of the WTO itself. This plan is “a litmus test for WTO’s relevance in the world today,” said Timur Suleimenov, deputy chief of staff of Kazakhstan’s president, who served as chairman of this week’s meeting.