WTO

The WTO Secretariat has updated the joint indicative list compiling information on critical inputs for the manufacturing, distributing and administering of COVID-19 vaccines. The revised version incorporates feedback from industry and includes information on new critical inputs that have been identified.

The “Joint Indicative List of Critical COVID-19 Vaccine Inputs for Consultation” can be found here.

On February 18, the European Union launched a legal challenge against China at the World Trade Organization, arguing that Chinese courts were preventing European companies from protecting their cellular technology patents. The EU considers that China is violating the WTO TRIPS Agreement, as Chinese courts continue to issue broad anti-suit injunctions (ASIs), thus deterring owners of cellular standard essential patents (SEPs) from litigating patent licensing disputes outside of China. Alongside the broad ASIs, it has been asserted that the Chinese courts are setting unduly low global licensing rates in their rulings. While the EU case focuses on ASIs, industry experts point out that it is the combination strategy that harms the position of European and other SEP owners. The European Commission filed the challenge on behalf of the 27 EU members, and other WTO members, such as Australia and the UK, have already joined the case. The next step is consultations. 

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Heated debates have taken place at the WTO TRIPS Council over Covid-19 vaccine patents and IP rights, with ongoing discussions still taking place among diplomats from the US, India, South Africa, and the EU. For vaccine researchers, manufacturers, and public experts, though, the focus may have moved on some time ago, says Alan Beattie in a new “trade secrets” posting for the FT. Governments seem also to be shifting focus to emphasize practical efforts to extend  manufacturing and distribution capacity globally; by way of example, the EU recently announced a €1bn contribution to finance the German company BioNTech to set up a mobile vaccine manufacturing plant in Africa assembled from kits.

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A group of 67 World Trade Organization (WTO) members, including the EU, have today concluded negotiations on a landmark agreement to cut red tape in services trade. The so-called Joint Initiative on Services Domestic Regulation will simplify unnecessarily complicated regulations and ease procedural hurdles faced by SMEs in particular. This agreement will help reduce the costs of global services trade by more than USD 150 billion every year. This is the first WTO deliverable in the area of trade in services in a very long time. Good regulatory practices are crucial for the functioning of today’s economy.

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At the WTO’s Twelfth Ministerial Conference WTO Members should agree new trade rules to support the global response to COVID-19, accelerate the economic recovery, and enhance future pandemic preparedness. WTO Members should eliminate tariffs on health products, including finished therapeutics, diagnostics, and vaccines, as well as the active pharmaceutical ingredients, raw materials, chemicals, other inputs and intermediaries, and specialty equipment used to invent, manufacture, and deploy these products.

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With the launch of a task force on vaccine production South Korea aims to become the world’s fifth-largest vaccine-producing nation in the next four years. President Moon Jae-in said South Korea aims to become the world’s fifth-largest vaccine-producing nation in the next four years. Moon has pledged to designate vaccine development as one of the nation’s three strategic technology areas, along with those of semiconductors and batteries, and invest 2.2 trillion won (US$1.92 billion) in the next five years (read the full story here).

Furthermore, according to Trade Minister Yeo Han-koo, South Korea will present a new concept for trade in five important sectors, including pharmaceuticals. Korea will provide the necessary support to companies producing vaccines to enter the global vaccine supply and establish bases in countries where major vaccine producers are located. The country will seek to reduce tariffs on vaccines through partnership with World Trade Organisation member countries (read the full story here).

Together with Thaddeus Burns, Innovation Council member Merck LF, Jennifer Brant has co-authored a paper on the delay in the COVID response caused by trade restrictions and explains why the WTO must act. The human costs of the pandemic, already dire, continue to mount. Vaccines against COVID have been developed at an unprecedented pace through a series of unprecedented partnerships. But this is not the end of the story; there is still an urgent need to expand vaccine protection worldwide, including through the expansion of biologic drug production capacity.

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Bio-pharmaceutical R&D and manufacturing inputs include: chemical or biological reagents; equipment used in laboratories; microscope parts; equipment for manufacturing such as single-use bioreactors; and the full range of raw materials used for R&D and production of vaccines and other bio-pharmaceuticals, such as guanidine thiocyanate. Researchers use these tools to make scientific breakthroughs, and bio-pharmaceutical companies rely on them to discover, develop, validate, and manufacture lifesaving vaccines, drugs, and therapies – including those necessary to address COVID-19 and future global health crises.

Some countries impose tariffs on bio-pharmaceutical inputs, in some cases as high as 25%. This raises costs and makes it more difficult for fledgling producers to compete. Eliminating tariffs on bio-pharmaceutical inputs could help to resolve some of the current global distribution challenges for COVID-related products, thereby helping to make the global COVID-19 response more equitable, affordable, and sustainable.

Unilateral elimination of COVID-19 related tariffs would provide substantial benefits in terms of the short-term dissemination of pharmaceutical inputs and vaccines.  Ultimately, however, tariff elimination should be made permanent and should cover a broader range of products. This would create legal certainty and predictability for actors along global value chains.

An appropriate vehicle for tariff elimination on inputs could be the WTO plurilateral agreement known as Zero for Zero, for which product coverage should be expanded to include the full range of COVID-19 bio-pharmaceutical inputs. In this respect, Innovation Council has developed a list of HS codes showing tariffs related to the inputs used for developing and producing COVID-19 vaccines, therapeutics and diagnostics. The list was developed in partnership with private sector actors in these value chains. A list of COVID-19 MFN product examples is available here.

Ngozi Okonjo-Iweala, the first female and first African leader of the World Trade Organization (WTO) argues why trade will help us find a way out of the pandemic with borders closed and global travel constrained.

The multilateral trading system is fundamental to fighting the current COVID-19 pandemic, preparing for future pandemics, and stimulating the global economic recovery. Trade barriers distort markets and create an uneven playing field, with the potential to reduce production when increased supplies are needed. To ensure that the multilateral trading system works smoothly and flexibly during a moment of global crisis, the WTO should play a more active facilitation role. It should work in close partnership with other relevant international organizations such as WHO, COVAX and the International Finance Institutions (IFIs) — to provide solutions to the pandemic.

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