[Ip-health] The Economist: The WTO has a new chief. Is it time for new trade rules too?

Thiru Balasubramaniam thiru at keionline.org
Sat Feb 20 23:07:54 PST 2021


In search of a cure
The WTO has a new chief. Is it time for new trade rules too?

Ngozi Okonjo-Iweala is not alone in thinking the WTO could do more

Finance & economics
Feb 20th 2021 edition
Feb 20th 2021


Fixing the World Trade Organisation (wto) is not enough for Ngozi
Okonjo-Iweala, the first woman and first African to lead it. On February
15th, the day she was appointed as director-general, she announced that she
wanted to help bring an end to the pandemic, too. The two are related; she
hopes to encourage members to lift export restrictions on food and medical
products, and even stimulate vaccine production. The former Nigerian
finance minister and chairwoman of gavi, a vaccine-finance agency, is not
alone in thinking the WTO could do more.

When the pandemic first struck the WTO seemed largely irrelevant. That was
partly by design: it permits trade restrictions if they protect health.
Global Trade Alert (GTA), a watchdog, recorded 202 export restrictions on
medical supplies and personal-protective equipment between January and
September 2020. Members’ failure to alert the WTO of their actions was more
egregious. Bernard Hoekman of the European University Institute calculated
that over a similar period gta recorded more than twice the number of trade
measures reported to the WTO.

Now some are asking whether the WTO should do more to discourage trade
restrictions. Members including Singapore and New Zealand have sought to
limit export controls and lower import barriers for pandemic-related
products. On paper the proposal offers gains for everyone: companies in
producing countries would access bigger markets, and consuming countries
would achieve greater security of supply. But the idea has not caught on
among exporters, perhaps because they know that they would struggle to keep
up their side of the bargain when crisis hits. Ms Okonjo-Iweala is keen to
beef up the WTO’s monitoring efforts, which should be easier.

Another complaint has been that the WTO’s intellectual-property rules are
too rigid, and protect pandemic profiteers over the poor. Médecins Sans
Frontières, a charity, has pointed to Italian producers of 3d-printed
ventilator valves threatened with patent-infringement lawsuits, or South
African producers struggling to access raw materials for covid-19 tests. In
emergencies the agreement on Trade Related Aspects of Intellectual-Property
Rights (TRIPS) allows governments to issue “compulsory” licences to make
health-related products without the permission of the patent holder. So
far, though, none has.

In October South Africa and India therefore proposed to suspend trips rules
relating to copyright, industrial designs, patents and trade secrets, until
most of the world’s population is immune. James Love of Knowledge Ecology
International, a think-tank, says the waiver could help overcome the often
intense pressure from rich-country governments on poorer ones not to use
flexibilities written into the rules. Patent holders, of course, claim such
waivers hurt their incentive to invest. (Whereas under a compulsory licence
buyers would have to pay some royalty, under the proposed waiver they would

The truth is that the waiver itself might not do much to expand vaccine
production. Without companies facilitating the transfer of technology it
would have “roughly zero net effect”, says Rachel Silverman of the Centre
for Global Development, another think-tank. And today’s supply constraints
reflect manufacturing bottlenecks rather than patent protection. As for
other products, Bryan Mercurio of the Chinese University of Hong Kong says
that if governments have not issued compulsory licences, often the problem
is not with the existing trade rules but with their own domestic lawmaking.

In any case, the proposal has not gained much support among other WTO
members and Ms Okonjo-Iweala does not seem to be advocating for it. On
February 15th she pointed to existing trips flexibilities, and warned about
the risks of putting off investment in vaccines to combat the variants of
covid-19. Ms Okonjo-Iweala wants to set up a longer-term framework for
responding to pandemics instead. The question is whether it can look
different to the one already in place. ■

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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