Alliance Announcements

• On December 7, AFTE released a statement on USTR’s intention to request an ITC investigation into a possible TRIPS waiver extension. The statement was featured in an IPWatchdog article soon after its release.

• On December 9, AFTE Executive Director Brian Pomper was quoted in a Washington Times story on the dangers of counterfeiting during the holiday season. 

In the News

• Doug McKalip Confirmed by Senate as USTR’s Chief Agricultural Negotiator: The United States Senate confirmed Doug McKalip to serve as USTR’s Chief Agricultural Negotiator. Doug has considerable experience, including as Senior Advisor to the Secretary of Agriculture. (USTR, 12/22)

• WTO Member States Agree to Postpone Deadline for TRIPS Waiver Extension Decision: At the final WTO General Council meeting of the year, member states agreed to postpone the deadline to decide whether to extend the TRIPS waiver for Covid-19 vaccines to therapeutics and diagnostics. The WTO General Council will consider the length of the postponement at its next meeting early next year. (WTO, 12/20)

• United States Requests USMCA Dispute Consultations on Canadian Dairy TRQ Policies: USTR requested new dispute consultations under the USMCA regarding Canada’s use of a market-share approach for determining dairy tariff-rate quota allocations. The request expands upon the U.S. challenge of Canada’s dairy TRQ measures from May 2022. (USTR, 12/20)

• USTR Asks ITC to Investigate TRIPS Waiver Extension, Sets October Deadline: After announcing support for postponing the WTO’s deadline to decide whether to extend the existing TRIPS waiver to Covid-19 diagnostics and therapeutics, USTR penned an official letter asking the U.S. International Trade Commission to investigate the impact of a potential waiver extension on: pharmaceutical innovation; access to tests and treatments; and the drug development pipeline, among other items. USTR requested that the investigation and a corresponding report be completed by October 17, 2023. (USTR, 12/16)

• Mexico’s Economic Ministry Proposes “Work Plan” to Settle USMCA Energy Dispute: Mexico has created a “work plan” to address a USMCA dispute over its energy policies. The plan suggests creating a “technical” team, as well as working groups, to answer the United States and Canada’s questions about Mexico’s alleged discriminatory treatment in favor of domestic producers. The United States will carefully review the plan due to Mexico’s wide-ranging violations under USMCA. (Gobierno de México, 12/13)

• IPEF Negotiations Begin: Fourteen member nations participated in the first round of Indo-Pacific Economic Framework negotiations, which touched on areas such as regulatory practices, agriculture, and trade facilitation, but not tariff reductions. USTR and the Commerce Department co-chaired the event, which was held in Brisbane, Australia. One week later, IPEF Ministers gathered virtually to discuss the economic benefits of IPEF membership. The government of India also confirmed that it will host a special IPEF negotiating round from February 8-11 for IPEF Pillars II-IV (supply chains, clean energy, and fair economy). (Politico, 12/12) (DOC, 12/20)

• New Study Shows Data Localization Policies in Several Asian Countries Will Drastically Reduce Trade: A new study by the Information Technology & Innovation Foundation found that policies adopted in Bangladesh, Hong Kong, Indonesia, Pakistan, and Vietnam to restrict the flow of data across national borders will raise import costs and decrease trade. “Data nationalism” could reduce Indonesia’s volume of trade by nearly 6% over five years, for example. (ITIF, 12/12)

• Bipartisan Letter Calls for USTR to Take USMCA Enforcement Action over Mexico Biotech Policy Demands: Twenty-four House Ways and Means Committee members penned a letter to Ambassador Tai over Mexican President Andrés Manuel López Obrador’s decree to scale back the use of the herbicide glyphosate and genetically modified corn entirely by 2024. Lawmakers urged immediate action to stop threats to food security and U.S. farmers. (Rep. Dan Kildee (D-MI), 12/9)

Spotlight on Enforcement

During the December 2022 World Trade Organization General Council meeting, member states agreed to extend the deadline for deciding whether to suspend intellectual property rights for Covid-19 therapeutics and diagnostics. The General Council will determine the length of the delay at its next meeting in early March.

Thanks to months of intense advocacy from patient groups, trade experts, and congressional offices, the U.S. government has refrained from signaling support for that IP suspension.

The government’s decision to postpone any decision — while better than an outright endorsement of the IP waiver — is still far from ideal. The ongoing delay merely increases the uncertainty surrounding IP protections and disincentivizes companies from researching and developing treatments for Covid-19 and other diseases. It isn’t clear why the U.S. government needs more time to make a final decision, considering that the evidence against an expanded IP waiver has been overwhelming for months.

IP has not hindered access to Covid tests and treatments. On the contrary, IP has enabled wider access to these life-saving products. In November, Mexico and Switzerland sent a written communication to the WTO’s Council for Trade-Related Aspects of Intellectual Property noting that 138 voluntary licensing agreements already support access in more than 127 countries. Companies may have hesitated to sign these agreements without assurances that their IP would be protected. Thanks in part to global IP rules like the TRIPS Agreement, there is actually a glut of treatments across the globe. The same is true of vaccines. As the Mexican-Swiss communication noted, “no adjustments to the IP system seem to be required.”

Importantly, an expanded IP waiver would impact patients’ access to treatments for diseases far beyond Covid. As the Progressive Policy Institute warned, an IP waiver for Covid-19 treatments and tests “could apply to a variety of multipurpose medical devices and medicines yet to be invented.” Some of the technology underlying Covid therapeutics is already being used to combat other illnesses, or could be utilized this way in the future. Slashing IP rights carries the risk of chilling “dual use” innovation and investment, which would set us back in our fight against an array of pressing public health concerns.

Reducing incentives for innovation would have serious consequences for the entire economy, including U.S. supply chains, small businesses, and union workers. Biopharmaceutical firms and their investors may put off decisions until they are certain the WTO won’t be giving their IP away, thereby reducing investment in new research and the facilities where that research happens. That wouldn’t just threaten jobs for scientists and lab technicians; it’d also reduce the demand for electricians, pipefitters, and construction workers, to name a few.

Instead of undermining the system that facilitated the creation and global trade of revolutionary tests and treatments in the first place, the WTO should address the real obstacles to equitable care. The trade body can start by focusing on the elimination of trade barriers on medical products, including import and export restrictions, protectionist regulatory measures, and excessive import duties and other taxes. For instance, duties and taxes combine for an effective tax rate of up to 28% on active ingredients and finished pharmaceutical products in India. State and local taxes in Brazil, meanwhile, add up to 31% of the cost of medicines in the country, more than five times the global average.

The Alliance for Trade Enforcement will actively participate in the ITC’s investigation, seizing the opportunity to share information about the current availability of Covid-19 diagnostics and therapeutics, as well as the disastrous effects of an IP waiver expansion. AFTE urges other critical stakeholders, including Members of Congress and their staff, to voice their concerns as well.