TRIPS Talks: Interview with João Aguiar Machado, EU Ambassador to the WTO

Newsletter Edition #67 [The Weekly Primer]

Originally published on June 29th, 2021 on Geneva Health Files.

Hi,

Greetings from rainy Switzerland.

Today we bring you a comprehensive interview of João Aguiar Machado, EU Ambassador to the WTO. This Q&A discusses the various dimensions to the EU’s position on the role of trade and intellectual property in the response to COVID-19. This week WTO members continue their discussions on the TRIPS Waiver alongside EU’s proposal.

Also sharing our exclusive from last Friday: A Moment of Reckoning for the COVAX Facility, where we parsed through Gavi’s Board documents to get a glimpse of this oft-criticized international mechanism for COVID-19 vaccines.

Consider becoming a paying reader to get exclusive access to original, in-depth reporting during these crucial weeks and months ahead. Reader support for our work helps us remain critical and independent. If you are seeking institutional subscriptions for your organization, get in touch with us for discounts.

Until Friday!

Best,

Priti

Feel free to write to us: patnaik.reporting@gmail.com or genevahealthfiles@protonmail.com; Follow us on Twitter: @filesgeneva

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I. THE GENEVA HEALTH FILES INTERVIEW

“Only a multi-pronged approach will bring about real change”

Q&A: João Aguiar Machado, EU Ambassador to the WTO

As WTO members continue to negotiate on ways to streamline, adapt intellectual property rules in the response to the pandemic, we bring you this timely interview with EU’s ambassador to the WTO, João Aguiar Machado. He discusses the different strands in the EU’s overall strategy on trade and health at the WTO in the context of this health emergency. Later this week, members head to an informal TRIPS Council meeting on 30 June to discuss South Africa-India’s TRIPS Waiver proposal and elements of the EU’s alternate proposal.

[GHF] 1. Can you explain how the three different suggestions articulated by the EU, in its communication to the WTO General Council (June 4, 2021), will come together? These include: a WTO framework on trade and health, the draft Declaration on Trade and Health and a proposal on the approach to compulsory licensing.

We all agree that the common global objective in this pandemic is equitable access to COVID-19 vaccines and treatments. It is certainly a top priority for the European Union (EU). We already see incredible progress in the total global production of COVID-19 vaccines with more than 10 billion doses due to be produced by the end of 2021. For comparison, the total global output of all vaccines before COVID-19 was only 5 billion doses. However, further ramping up the production and, most importantly, ensuring equitable distribution of COVID-19 vaccines remain very essential priorities in the fight against time in this pandemic.

Setting up and ramping up the production of vaccines is a highly complex process which requires adequate facilities, trained personnel, know-how, raw materials and other inputs. It is a complex issue that cannot be solved by one simple solution. The overall strategy is not only within the WTO. The WHO, other organisations, institutions and initiatives –such as the COVAX Facility — are working on these solutions. Members of the WTO must collectively find ways to address the current delays and shortages in vaccine production to the extent that is possible in the WTO framework.

We have essentially two strands of work in the WTO: on the one hand, the proposal from a number of like-minded members (Ottawa Group) for a Trade and Health Initiative. On the other hand, the specific debate on intellectual property issues related to the proposal by India, South Africa and others to waive the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the recent EU proposal on optimising the use of licencing flexibilities provided in the TRIPS agreement. It is now time to work on all of these issues with urgency for a final comprehensive solution on health.

More concretely, the co-sponsors of the Ottawa group Declaration on Trade and Health are discussing in particular trade facilitation and production expansion through collaboration. As the vaccine production scale-up is related also to a smooth functioning of the supply chain, the EU proposed that this aspect is also discussed in the context of the Declaration on Trade and Health. The intention is to revise the current draft Declaration and to incorporate elements of the EU’s Communication to the WTO General Council. At the same time, the intellectual property strand is being dealt with in the TRIPS Council. Our objective is that these strands of work form a basis for a general understanding on health in the WTO General Council, at the upcoming WTO 12th Ministerial Conference.

[GHF] 2. The EU proposal to the TRIPS Council has focused a lot on compulsory licensing. What is the EU’s position on other aspects of South Africa-India proposal including on copyrights and trade secrets as barriers to equitable access?

The EU proposes to the WTO a comprehensive approach addressing trade issues related to the actual bottlenecks that affect the manufacturing speed and the fair supply of vaccines and medicines in the current pandemic. The component on compulsory licensing as proposed for discussion at the TRIPS Council is thus only one element of this comprehensive approach. We consider that intellectual property plays an important role as an enabler that contributes to our overall objective of ramping up production of COVID-19 vaccines and medicines. However, it is not and should not be a barrier to achieve this objective. We have been clear that in a global emergency like this pandemic, if voluntary licensing fails, compulsory licensing is a legitimate tool to scale up production. This is why we propose to clarify and simplify the use of compulsory licensing in times of a pandemic.

If we examine how intellectual property can enable the production of vaccines or medicines, the focus is primarily on patents. We believe that a debate on the entire intellectual property system will only delay urgently needed action. Moreover, the intellectual property framework is already a system of checks and balances. There are relevant exceptions that could be used with regard to every intellectual property right, be it copyright, design or protection of undisclosed data. Moreover, we must be realistic as to what can be achieved with the proposed lifting of the Members’ obligations under the TRIPS Agreement. For example, in case of trade secrets, waiving Article 39 does not grant access to companies’ confidential information. It only removes certain minimum remedies against a misappropriation of that information.

[GHF] 3. The proposal by the EU recognizes the “urgent challenge” to ensure a rapid and equitable roll out of vaccines and therapeutics — but the proposal does not mention diagnostics. Can you elaborate why this is so?

The ongoing discussions concern the whole spectrum of essential medical goods, diagnostics tools being one of them, even if the EU Communication to the WTO focuses specifically on vaccines and therapeutics. The availability of safe and effective COVID-19 vaccines and therapeutics is now the main global priority that needs to be addressed urgently.

Diagnostic tools of course remain important for containing the pandemic. When we speak about “medicines” in the EU proposal to the TRIPS Council as regards the facilitation of compulsory licences, diagnostics as well as therapeutics fall under that term. We are looking forward to discussing the EU proposal with other WTO members and will certainly be open to clarifying the text as necessary.

João Aguiar Machado, Ambassador, Permanent Representative of the EU to the WTO

[GHF] 4. Some critics are of the view that the EU communication at the WTO is more driven by protectionist industrial policy than motivations to safeguard public health. How would you respond to that?

On the contrary, the EU’s commitment to the global efforts of equitable access to vaccines and therapeutics against COVID-19 cannot be put in doubt. Just to recall that the EU is a leader when it comes to deliveries of effective vaccines to the rest of the world. By now, over 350 million doses have been exported out of the EU to the rest of the world. This equals around half of the production in the EU. We are also a major contributor to the COVAX Facility.

As already noted, the WTO can and must contribute to delivering equitable access to vaccines and medicines in this pandemic, but this complex issue needs to be addressed comprehensively. This is the reason for the EU communication. It seeks to be as concrete as possible and identify which actions should be taken. The EU proposal is very much driven by the need to ensure equity in the distribution of vaccines. While the production of COVID-19 vaccines has been increasing significantly, their distribution across the regions of the world remains unbalanced. The WTO can certainly act and ensure that this objective is unimpeded by trade barriers.

[GHF] 5. How will the EU reconcile its opposition to the TRIPS waiver proposal led by South Africa and India, with the support for this proposal by the European Parliament?

The Commission has carefully analysed the resolution of the European Parliament (EP). The resolution reflects a mix of positions expressed in the EP. The Commission is in full agreement with the EP that intellectual property is an enabler rather than a barrier to vaccines availability.

The Commission also shares the view of the EP that the proposal for an indefinite waiver as proposed in the WTO would pose a significant risk to innovation and research. At the same time, the EP calls on the Commission to support text-based negotiations for a temporary waiver of the TRIPS Agreement that aims to enhance global access to affordable COVID-19-related medical products.

The Commission has engaged in all strands of work and continues to be engaged in the text-based process that has been launched in the TRIPS Council. The EU proposal submitted to the TRIPS Council on 21 June 2021 is a significant step in that direction and a constructive contribution to the debate, as underlined by several other WTO Members. While the TRIPS waiver proposal and the EU proposal represent different approaches, they seek to address the same issue of the availability of COVID-19 vaccines and medicines.

[GHF] 6. How will the 1 billion dose vaccine donations announced by the G7 affect the negotiations at the WTO? Will it ease the public and civil society pressures for a sweeping waiver of IP?

Indeed, total G7 commitments since the start of the pandemic provide for a total of over 2 billion vaccine doses, with the commitments made since February 2021, including the last meeting in Carbis Bay, providing for 1 billion doses over the next year. To that, we should add the pledges of Pfizer/BioNtech, Moderna and Johnson & Johnson to provide 1.3 billion does of vaccines to low- and medium-income countries at cost or at lower prices respectively by the end of 2021. We should not forget the EU’s massive financing of the COVAX Facility to help deliver vaccines where they are most needed. Finally, we have predictions of the manufacturing capacity reaching around 10 billion doses by the end of 2021. These are all causes for cautious optimism and indications that our efforts are paying off. Of course that does not mean that we should not try to produce more — and hence our proposal to the WTO on how to increase production, ensure well-functioning supply chains, etc.

At the same time, we must also look at the future. The crisis has demonstrated the importance of diversifying and enhancing the resilience of global value chains. This is why the EU and its Member States — or “Team Europe” — committed to supporting the vaccine production in non-EU countries. The crisis opened up a window of opportunity for Africa and Europe. During the G20 Global Health Summit in May 2021, President von der Leyen announced a Team Europe initiative on manufacturing and access to vaccines, medicines and health technologies in Africa. Through this initiative, Team Europe will help create an enabling environment for local vaccine manufacturing in Africa and tackle both supply and demand side barriers. It will serve to complement existing efforts. As a first step, the initiative will be backed by EUR 1 billion from the EU budget and European development finance institutions, such as the European Investment Bank.

[GHF] 7. What according to the EU will be corners of a compromise as far as the waiver proposal is concerned? Will it the compulsory licensing approach as suggested by the EU?

The EU is engaging in the text-based process constructively to find a way forward in this discussion on the role of intellectual property in enhancing access to affordable COVID-19 vaccines and medicines. The objective is to proceed with concrete, pragmatic short and medium term solutions to enhance universal access to COVID-19 vaccines and medicines at affordable prices.

We would like to emphasize again that the EU considers that only a multi-pronged approach addressing the identified bottlenecks such as limited manufacturing capacity and access to raw materials can bring about a real change. Intellectual property is only a part, and not the key part, of the solution.

The EU is ready to continue discussing the revised TRIPS waiver proposal although we are not convinced that the broad waiver as proposed is the best immediate response to the reach the objective of the widest and timely distribution of COVID-19 vaccines that the world urgently needs. This is why the EU included in this discussion a different and more targeted approach focusing on facilitating the use of compulsory licensing, in other words how the flexibilities in TRIPS can be used to waive certain protections.

This approach can bring legal certainty to Members that are ready to produce COVID-19 vaccines and medicines on the basis of compulsory licences and to those that would be interested to import those. WTO Members should try to progress on this approach because it can bring solutions quickly. We hope that we will be able to convince Members that our approach, including the components that will be addressed in the General Council, represents the best way for an effective and pragmatic short-term response to the crisis.

Under a syndication arrangement for a series of interviews, this Q&A is also being published in Health Policy Watch.

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