On 2 October 2020, India and South Africa submitted to the Council for Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) of the World Trade Organization (“WTO”) a proposed waiver from the implementation, application and enforcement of intellectual property (“IP”) rights under the WTO TRIPS Agreement (“COVID Waiver”) insofar as these rights relate to the prevention, containment, and treatment of COVID-19.  In essence, the COVID Waiver would allow WTO Members to forgo some protections of IP rights set out in the TRIPS Agreement in the hope that this waiver could speed up the production of affordable medical products including COVID diagnostic kits, vaccines, medicines, personal protective equipment and ventilators.

The proposed COVID Waiver has divided the WTO Membership.  While a majority of WTO Members have expressed support for the COVID Waiver, some developed countries (such as the EU, Korea, Japan, Australia and Singapore) have expressed reservations as to whether the COVID Waiver is necessary and whether it would actually help achieve the aim that it is intended to serve.

The United States initially opposed the COVID Waiver.  On 5 May 2021, however, the Biden Administration announced that the United States would now support the COVID Waiver for COVID-19 vaccines, and that it would actively participate in text-based negotiations at the WTO.  In that same announcement, the United States acknowledged that: “[t]hose negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved”.

This restrained acknowledgment of the United States touches upon a central feature and systemic problem of decision-making at the WTO: the perceived need for consensus in order to decide on virtually all matters.  More than 14 months since its initial introduction, the COVID Waiver is still under consideration at the WTO – and a decision remains elusive.

This second instalment of our three-part series on decision-making at the WTO further explores how the WTO Membership’s traditional aversion to voting as a means of decision-making is coming under fire and putting a strain on the effective functioning of the WTO.

In this second instalment, we focus on the WTO rules relevant to the adoption of the proposed COVID Waiver, and how the WTO Membership is replicating the process that it endured back in 2003 when faced with another TRIPS waiver request (to do with HIV/AIDS) (the “2003 Waiver”).  The world has changed considerably since 2003 but certain things, such as decision-making at the WTO, have stubbornly remained the same.

Decision-making Rules Applicable to Waiver Requests Regarding the TRIPS Agreement at the TRIPS Council

Article IX:3(b) of the Marrakesh Agreement Establishing the WTO (“Marrakesh Agreement”) states that a waiver request regarding certain provisions of the TRIPS Agreement must first be submitted to the TRIPS Council for consideration during no more than 90 days.  The TRIPS Council must submit a report to the Ministerial Conference (“MC”) (or to the General Council (“GC”) in the interval between MCs) after having completed its consideration of the waiver request.

Rule 33 of the Rules of Procedures for Meetings of the TRIPS Council states that: “[w]here a decision cannot be arrived at by consensus, the matter at issue shall be referred to the General Council for decision”.  According to Article IX:3 of the Marrakesh Agreement, voting can take place when the MC/GC must decide on a waiver request: a waiver request requires the favorable votes of three-quarters of WTO Members.

At the time of publication, the TRIPS Council had been considering the COVID Waiver for more than 14 months.  Therefore, the TRIPS Council has disregarded the 90-day mandatory limit for the consideration of waiver requests, and it has insisted on pursuing its consideration of the COVID Waiver as long as is necessary for it to adopt its report on the COVID Waiver by consensus.

The TRIPS Council is pursuing this course of action in spite of the previously mentioned decision-making rule specific to the TRIPS Council (Rule 33) that allows the referral of any matter to the GC once it is averred that a decision on such matter cannot be arrived at by consensus.  By now it is clear that opposing and deeply entrenched views are preventing consensus from being reached within the TRIPS Council.

The TRIPS Council’s insistence on adopting its report on the COVID Waiver by consensus before referring it to the GC replicates the position taken by the TRIPS Council back in 2003 with respect to the 2003 Waiver.

Decision-Making Regarding the 2003 Waiver as a de facto Blueprint for the COVID Waiver

This is not the first time that the mechanism for a TRIPS waiver has been invoked by WTO Members.  In response to developing country concerns about the limitations that the TRIPS Agreement imposed on access to essential medicines (particularly around HIV/AIDS), WTO Members adopted the Doha Declaration on TRIPS and Public Health (“Doha TRIPS Declaration”) on 14 November 2001.

Paragraph 6 of the Doha TRIPS Declaration instructed the TRIPS Council to propose, before the end of 2002, a solution to restrictions on compulsory licensing that would help low- and middle-income countries with insufficient or no manufacturing capacities in the pharmaceutical sector gain access to imported essential medicines.

Notwithstanding the instructions of the Doha TRIPS Declaration of November 2001 which instructed the TRIPS Council to provide a solution within thirteen months, it took 22 months of negotiations among WTO Members before the TRIPS Council proposed the adoption of the 2003 Waiver.

On 28 August 2003 the TRIPS Council agreed to approve a draft decision implementing paragraph 6 of the Doha TRIPS Declaration, and to forward it to the GC for adoption.  On 30 August 2003, the General Council adopted the decision which provided a waiver of restrictions on compulsory licensing under the TRIPS Agreement for least-developed country Members and other WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector that notify the TRIPS Council of their intention to use the system set out in the decision (the 2003 Waiver).

Despite this ultimate success, the decision-making process that led to the 2003 Waiver was lengthy.  As in the current circumstances relating to the COVID Waiver, one of the primary reasons for this protracted process was the Membership’s singular focus on reaching consensus at the TRIPS Council before submitting the matter to the GC for consideration.

Even though many Members continually expressed their disappointment and frustration that a solution had not yet been found, the inability to arrive at a consensus did not spur the Members to refer the matter to the GC as envisaged by Rule 33 of the Rules of Procedures for Meetings of the TRIPS Council.  Instead, the TRIPS Council requested further time to consult with the Membership.

Current Status of the COVID-19 Waiver

Nearly twenty years after the 2003 Waiver, the issue of a waiver from TRIPS obligations for public health reasons is back in the spotlight, with the proposed COVID Waiver.  In many ways, the approach of WTO Members with respect to the COVID Waiver mirrors the deliberations of the TRIPS Council in the early 2000s.

Like in the case of the 2003 Waiver, WTO Members have been debating the COVID Waiver within TRIPS Council meetings for the past 14 months.  With regard to the COVID Waiver, this decision-making approach disregards the explicit requirement in Article IX:3(b) of the Marrakesh Agreement for the TRIPS Council to consider a waiver request “during a time-period which shall not exceed 90 days” and to submit its report on a waiver request to the MC/GC at the end of such time period.

And, like during the deliberations of the TRIPS Council with respect to the 2003 Waiver, WTO Members have remained at loggerheads in the TRIPS Council meetings for more than a year.  At TRIPS Council meetings held throughout October and November 2021 in the lead up to MC12 (previously scheduled to run from 30 November to 3 December 2021, now tentatively postponed to March 2022), “important points of convergence” were reportedly reached.  Despite these efforts, Members’ positions had reportedly not dramatically changed since previous TRIPS Council meetings, and the TRIPS Council is far from being in a position to agree on any concrete outcome.

Conclusion

WTO Members are adhering strictly to the consensus requirement in deciding whether or not to adopt the COVID Waiver.  In this way, history seems to be repeating itself.  Despite the Membership having the right to refer this matter to the GC for a vote, Members and the TRIPS Council cling to consensus.  This political choice of forgoing legally authorized voting mechanisms is obstructing decision-making at the WTO.

Consensus will come into play again at the MC/GC stage, if and once the proposed COVID Waiver makes it out of the TRIPS Council.  According to Article IX:3 of the Marrakesh Agreement, a decision by the MC/GC on a waiver request requires the favorable votes of three-quarters of WTO Members.  In spite of this provision, waiver decisions are exclusively taken by consensus at the WTO.  This is partly a result of a 1995 GC decision whereby the GC agreed that decisions concerning waivers would be taken by consensus in accordance with Article IX:1 of the Marrakesh Agreement.

The WTO Membership’s dogged reliance on decision-making by consensus ignores the clear statements in both Article IX:1 of the Marrakesh Agreement and the 1995 GC decision that “where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting”.  Moreover, the 1995 GC decision explicitly acknowledges that a Member may request a vote at the time the decision is taken.

In sum, this political preference of Members for consensus at the exclusion of voting explains in part the current stalemate at the WTO regarding the COVID Waiver, as well as the slowness in taking a decision on that matter.  On a slightly more positive note, the usual practice of the GC has been to adopt a draft waiver by consensus without further substantive discussion once the relevant sectoral Council had approved a draft waiver by consensus.  At the same time, the GC practice effectively lengthens discussions that are currently ongoing at the TRIPS Council, and arguably heightens the difficulty of Members arriving at a consensus at that level, given that the TRIPS Council essentially becomes the first and only stage where negotiations take place.

WTO Members can choose to go down a different path.  With sufficient political will, Members could avail themselves of existing rules and allow the TRIPS Council to refer the proposed COVID Waiver to the GC, with any Member authorized to request a vote on whether or not to adopt the proposed COVID Waiver at a GC meeting.