[Ip-health] FT - THE EDITORIAL BOARD: Coronavirus must not destroy an open world economy - The global health emergency makes trade more important, not less

James Love james.love at keionline.org
Sun Mar 29 11:50:58 PDT 2020


This paragraph in the FT Editorial is something to bookmark. The Editorial
board sees the pandemic damage to health and the economy so great that
compulsory licensing of patents is a mechanism that "must be used" if
necessary.

---------------

Another vital trade policy issue will arise in the near future: the
licensing of drugs and vaccines effective against the virus. The world has
an overwhelming interest in ensuring these will be universally and cheaply
available. Fortunately, trade rules allow compulsory licensing. If
necessary, it must be used.

---------------

However, what the FT does not mention are the absurd nature of 31.bis of
the TRIPS agreement, which makes exports under compulsory licenses so
complex that no country has been able to use the clause in any meaningful
way.

https://www.wto.org/english/res_e/publications_e/ai17_e/trips_art31_bis_oth.pdf

The text of 31bis includes an Annex which states:

"It is noted that some Members will not use the system as importing Members
and that some other Members have stated that, if they use the system, it
would be in no more than situations of national emergency or other
circumstances of extreme urgency;"

Some countries have indicated they will use 31bis ONLY in "situations of
national emergency or other circumstances of extreme urgency."

However, relevant now, is that a number of member states said they would
NEVER use 31bis, regardless of even emergencies like the current COVID-19
pandemic.

Here are the countries that volunteered to make their citizens NOT ELIGIBLE
as importers in emergencies.

Australia,
Canada,
Iceland,
Japan,
New Zealand,
Norway,
Switzerland,
United States,
The European Communities, including the following member states:
Austria
Belgium
Bulgaria
Croatia
Cyprus
Czechia
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden















On Sun, Mar 29, 2020 at 6:05 AM Thiru Balasubramaniam <thiru at keionline.org>
wrote:

> https://www.ft.com/content/4a3bf282-701c-11ea-9bca-bf503995cd6f
>
> Opinion The FT View
> Coronavirus must not destroy an open world economy
> The global health emergency makes trade more important, not less
> THE EDITORIAL BOARD
> MARCH 27 2020
>
>
> The coronavirus pandemic is a shared emergency. It would be a paradox and a
> disaster if the outcome were to be the closure of borders to trade. Yet
> shortsighted export controls, protectionism and the economic slump may
> together have this result. Protection magnified the disaster of the Great
> Depression of the 1930s. It must not do so this time.
>
> The immediate concern is beggar-my-neighbour controls on exports of medical
> equipment. According to Global Trade Alert, 24 countries, including
> Germany, France, Taiwan and South Korea, restricted exports of such
> products between January and March 11 2020. The US heaps domestic insult on
> foreign injury by continuing to levy high tariffs on imports of medical
> equipment from China. Chad Bown of the Peterson Institute for International
> Economics notes that Donald Trump’s “misguided” trade war may cripple the
> fight against the pandemic.
>
> Unlike Mr Trump’s foolish tariffs, these export controls are consistent
> with World Trade Organization rules. Members may impose export restrictions
> “essential to the exporting contracting party”. Furthermore, the provisions
> on security state that a member may take “any action which it considers
> necessary for the protection of its essential security interests . . . in
> times of an emergency in international relations”. A pandemic must count as
> such.
>
> The question is rather whether export controls are good policy. They are
> not. It would be far better if they were lifted, since they damage the
> health-service capacity of countries that cannot make desperately needed
> products. They may also fracture supply chains and lead to the creation of
> higher-cost domestic capacity. Some will counter that domestic production
> is the only reliable source of supply. The virus has demonstrated the
> falsity of this: if the sole domestic factory is located in an area in
> lockdown its supply can disappear. Diversity of sources of supply, together
> with stockpiling for emergencies, is the safest policy.
>
> Another vital trade policy issue will arise in the near future: the
> licensing of drugs and vaccines effective against the virus. The world has
> an overwhelming interest in ensuring these will be universally and cheaply
> available. Fortunately, trade rules allow compulsory licensing. If
> necessary, it must be used.
>
> Crucially, trade is going to collapse, as the economic impact of both the
> virus and policies to tackle it hit home. The number of seaborne shipments
> from China into the US fell more than 40 per cent in the first two weeks of
> March relative to the same period of 2019. Worse will follow in coming
> days.
>
> Today, the worries are disease and recession. Yet, in time, people will
> return to work. Many jobs will then depend on recovery of external demand.
> This is why policy co-ordination and co-operation are so important. In
> their absence, countries may be tempted to replace their lost foreign
> demand with domestic production, by raising the barriers to foreign
> supplies. This would launch another damaging round of beggar-my-neighbour
> policies, shattering supply chains, slowing recovery and thwarting the
> return of an open and dynamic world economy. Such autarky is not a new
> idea: the Soviet Union was a failed exemplar.
>
> Trade liberalisation was launched after the second world war, precisely to
> reverse the protectionist response to the Great Depression. That
> liberalisation spurred the recovery of western Europe. Later, it spread to
> the wider world, with gratifying results for growth and poverty
> alleviation. We must avoid the mistakes of the 1930s. We need to retain
> that legacy of openness now, if we are to enjoy healthy recovery when the
> pandemic passes.
>
>
> --
> Thiru Balasubramaniam
> Geneva Representative
> Knowledge Ecology International
> 41 22 791 6727
> thiru at keionline.org
> _______________________________________________
> Ip-health mailing list
> Ip-health at lists.keionline.org
> http://lists.keionline.org/mailman/listinfo/ip-health_lists.keionline.org
>


-- 
James Love.  Knowledge Ecology International
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