New WTO deal waters down vaccine IP rights - but it came too late

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During the early morning hours in Geneva, WTO ministers approved a package of agreements that included the vaccine patent waiver, which Director-General Ngozi Okonjo-Iweala previously said was necessary to end the “morally unacceptable” inequity of access to Covid-19 vaccines.  

The WTO’s last-minute deal - secured after an all-night negotiating session in Geneva - is an important victory for Okonjo-Iweala, the former head of Gavi - the vaccine alliance, who actively stumped for the accord during her first year as the WTO’s top trade official.

At the same time, the deal delivers a significant blow to vaccine manufacturers such as Pfizer Inc., Moderna Inc. and AstraZeneca Plc, which fought hard to prevent nations from undermining the intellectual-property framework that enabled them to produce multiple viable Covid-19 vaccines in record time -- saving countless lives.

“The premise of an intellectual-property waiver for Covid-19 vaccines was flawed from the outset,” said Thomas Cueni, the director-general of the International Federation of Pharmaceutical Manufacturers and Associations. “To this day, there is no evidence that IP has been a barrier to Covid-19 vaccine production or access.”

The debate overcame a protracted fight between the US and China over the Biden administration’s demand that China be clearly excluded from the deal - for fear that it would enable China to steal US technologies. 

Vaccines have become a flashpoint for trade protectionism and many US policy makers want to prevent China from obtaining access to the mRNA technology that Pfizer, BioNTech SE and Moderna used to produce Covid-19 inoculations. 

Though the Biden administration supported the idea of waiving IP rights for a vaccine, it never offered full-throated support for the deal until it emerged in the early hours in Geneva. The deal will likely result in heavy political blow back from the US pharmaceutical sector and from Republican lawmakers who oppose it. 

In recent weeks, US Trade Representative Katherine Tai found herself targeted by her former Capitol Hill colleagues for negotiating a back-room deal that many lawmakers feared would undermine American innovation.

Ultimately, the negotiation took so long and the global vaccine manufacturing effort worked so quickly that the WTO’s final deal will not have a meaningful impact on the production of Covid-19 jabs, as there is a global glut of them.  

As of May, there were 2.1 billion excess doses of Covid-19 vaccines and their production has consistently outpaced the number of doses administered, according to data from the the European Federation of Pharmaceutical Industries and Associations. 

“There is no longer a supply-side constraint on the availability of vaccines,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics. 

This week, a key proponent for the IP waiver - Indian Trade Minister Piyush Goyal - publicly acknowledged that “not a single plant to make manufacturing of vaccines will come with this” agreement. 

India blamed powerful nations for dragging out the negotiations for so long that it finally lost its relevance as pharmaceutical manufacturers were ultimately able to produce an oversupply of vaccines. 

“What we are getting is completely half-baked and it will not allow us to make any vaccines,” Goyal said in a statement posted on his ministry’s website. “Vaccines have already lost relevance,” he said. “It’s just too late; there is no demand for vaccines anymore.” 

Fishing and ecommerce

WTO members separately agreed to a scaled-down agreement to curb harmful government fishing subsidies, fulfilling a key 2015 United Nations sustainability target aimed at slowing the rapid depletion of global fish stocks. 

The accord, which sets new limits on subsidies for illegal, unreported and unregulated fishing, aims to improve the jobs, economies and communities that depend on global fish stocks. The deal will expire four years after its entry into force unless WTO members agree to extend the restrictions to activities that contribute to overfishing and overcapacity. 

WTO members also agreed to temporarily renew the WTO’s 24-year-old moratorium on e-commerce duties -- which averts the prospect of new tariffs on the digital economy after India and other developing nations threatened to scuttle the agreement. 

There were fears that if the 1998 accord were to lapse, it could open a new regulatory can of worms that may result in higher consumer prices for cross-border purchases, Netflix movies, Apple music, and Sony PlayStation games.  

- With assistance from Jorge Valero.

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