Guaranteeing Access to Medicines: Reforming Trade and Investment Treaties in the COVID-19 Era
Eight months into COVID-19, what is the status of the international investment regime and access to essential medicines? The GDP Center’s Working Group on Trade and Access to Medicines will host a panel discussion on trade, the investment regime, and access to essential medicines. The event is co-sponsored by the South Centre, the intergovernmental organization of developing nations based in Switzerland.
Analysis of the Overcapacity and Overfishing Pillar of the WTO Fisheries Subsidies Negotiations
By Peter Lunenborg
Sustainable Development Goal (SDG) 14.6 asks World Trade Organization (WTO) Members to “prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing”. Hence, the pillar on overcapacity and overfishing (O&O) is the most important pillar of the fisheries subsidies negotiations. However, WTO Members have not yet agreed on the approach to prohibition. This research paper distinguishes three types of approaches: the fisheries management linked approach (sometimes referred to as effects-based approach), capping and list-based approach.
This paper argues that the core of the prohibition in the Overfishing and Overcapacity pillar should be list-based and be applicable to large scale fisheries who receive the bulk of global fisheries subsidies especially those that are capacity-enhancing. For subsidies which are not prohibited an effects-based test might be considered. A supplementary subsidy prohibition covering areas beyond national jurisdiction (ABNJ) could be considered, or the vessels or operations targeted by proponents of the ABNJ proposals could be deemed ‘large scale’. If capping remains on the table, capping subsidies per fisher could be explored. Special and Differential Treatment should be an integral element of the outcome as developing countries whose fisheries sector are less developed should not take on the same commitments.
Webinar: Towards Justice in the International Economic Order: Proposals from the South
This webinar is a collaboration between Afronomicslaw and the South Centre, Geneva, to mark the 25th anniversary of the South Centre. Both the South Centre and Afronomicslaw share a commitment to the protection and promotion of the development interests of countries of the Global South.
The theme of the webinar “Towards Justice in the International Economic Order: Proposals from the South” reflects this shared commitment. In particular, the webinar will focus on selected initiatives proposed by the Global South. An important premise of the webinar presentations will be that the countries of the Global South are not mere spectators in the construction of the global order. Among the issues that the webinar will discuss will be access and a development-oriented approach to the WTO TRIPS Council (including the recent waiver proposal by South Africa and India on TRIPS obligations, and attempts to reframe the e-commerce and IP agenda). It will also reflect on the soon to be launched African Sovereign Debt Justice Network (AfSDJN), relating to issues of sovereign debt that have become particularly germane in light of the COVID-19 pandemic.
A New Trend in Trade Agreements: Ensuring Access to Cancer Drugs
By Maria Fabiana Jorge
A World Health Organization (WHO) report on cancer indicates that the cancer burden will increase at least by 60% over the next two decades, straining health systems and communities. Companies develop cancer drugs in part because payers are less resistant to paying high drug prices for these drugs. As Barbara Rimer, Dean of the University of North Carolina and Chair of the U.S. President’s Cancer Panel stated, “[m]ost cancer drugs launched in the United States between 2009 and 2014 were priced at more than $100,000 per patient for one year of treatment.” Many of the new cancer drugs are biologics. Such prices are clearly out of reach for most patients who will need them increasingly more to stay alive. While competition is critical to ensure lower drug prices, we have seen a number of strategies, including through trade agreements, to prevent competition and extend monopolies over these drugs and their very high drug prices. It is no accident that the exclusivity granted to biologic drugs has been one of the most conflictive provisions in recent trade agreements such as the United States-Mexico-Canada Agreement (USMCA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Nevertheless a new trend in trade agreements started in 2007 when U.S. Members of Congress pushed back against the interests of powerful economic groups seeking longer monopolies for drugs. These Members of the U.S. Congress prevailed then in restoring some balance in the trade agreements with Peru, Colombia and Panama and further consolidated this new trend in 2019 in the USMCA. Moreover, following the U.S. withdrawal from the original Trans-Pacific Partnership (TPP), the negotiators of the remaining 11 countries also pushed back to ensure a better balance between innovation and access in the CPTPP. People around the world need to be aware of these precedents and ensure that they also work for access to medicines for their own citizens.
WTO reform and the crisis of multilateralism – A Developing Country Perspective
About the Book:
The WTO has not been able to recover since the collapse of the Doha Round in July 2008. Several ministerial conferences including the Buenos Aires meeting in December 2017 failed to reach agreement. The US Trump Administration launched a campaign to reform the WTO in 2018 and 2019. This book argues that the Trump Administration reform proposals have been much more aggressive and far-reaching than the Obama Administration before it, threatening to erode hard-won special and differential treatment rights of developing countries. By blocking the appointment of new Appellate Body members, the US has effectively paralysed the Appellate Body and deepened the crisis of the multilateral trading system. Developing countries have responded to the proposals and called for the WTO to be development-oriented and inclusive. This book provides a critical analysis of the US-led reform proposals and seeks to build a discourse around an alternative set of concepts or principles to guide the multilateral trading system based on fairness, solidarity, social justice, inclusiveness and sustainability.
United States: An Obsolete Trade Practice Undermines Access to the Most Expensive Drugs at More Affordable Prices
By Maria Fabiana Jorge
Access to affordable drugs is a top policy priority for the United States with real bipartisan support but it increasingly seems to be an unreachable goal, in part, due to conflicting government policies. While the Administration’s Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs highlighted the importance of competition to ensure lower drug prices, U.S. trade policy in general, and the Special 301 Annual Review in particular, do exactly the opposite: broaden and lengthen the monopolies granted to pharmaceutical companies thus delaying or deterring the launch of generic and biosimilar drugs and with that, the chances of lowering drug prices. The pharmaceutical industry has changed a great deal in the past 30 years, among other things by developing complex biotechnology drugs that while critical for the treatment of illnesses such as cancer, are out of reach for many patients. While some parts of the government are trying to increase access to medicines through competition provided by generic and biosimilar drugs, their efforts are being undermined by a trade policy that was defined 30 years ago. It is time to adjust U.S. trade policy to the realities of 2020 and stop acting as if it was still 1989.
The Covid-19 Pandemic and Liability under Investment Treaties
By Muthucumaraswamy Sornarajah
COVID-19 can increase liability for countries under international investment treaties. Professor M. Sornarajah, Emeritus Professor at the National University of Singapore, discusses in this SouthViews the imminent challenges faced under such treaties by developing countries. The text isbased on his presentation at the South Centre webinar on “Responsible Investment for Development and Human Rights: Assessing Different Mechanisms to Face Possible Investor-State Disputes from COVID-19 Related Measures” held on 30th July 2020. The recording of the webinar is available here: https://www.youtube.com/watch?v=yXPswKuywvA
COVID-19 and WTO: Debunking Developed Countries’ Narratives on Trade Measures
By Aileen Kwa, Fernando Rosales and Peter Lunenborg
In response to the COVID-19 pandemic, developing countries at the World Trade Organization (WTO) are faced with demands to i) permanently liberalize their markets in health products, and also in agriculture; ii) ban export restrictions in agriculture; and iii) conclude new digital trade rules including liberalizing online payment systems, and agreeing to free data flows. There seems to be a confusion between short-term and long-term responses. For the short-term, governments must take measures needed to address the crisis, including liberalizing needed health products. However, permanently bringing tariffs to zero for the health and agricultural sectors will not support developing countries to build domestic industries. Export restrictions in agriculture cannot be given up. They can be a very important tool for stabilizing domestic prices and for food security. New digital trade rules at the WTO would foreclose the possibility for countries to impose data sovereignty regulations, including data localization requirements that can support their infant digital platforms and industries.
Trade Measures Adopted by Countries in Response to COVID-19
In response to the COVID-19 pandemic, many WTO members have adopted several measures affecting trade. Some are trade liberalizing; others are trade restrictive. South Centre has elaborated a worksheet that compiles these measures (updated till 16 April) based on available sources of information. The compilation does not intend to be exhaustive. However, it may help members to have information about the landscape of trade measures that may affect them.
Intellectual Property and Trade Measures to Address the Covid-19 Crisis by the South Centre
The South Centre views with concern the attempts by some governments and industry players to monopolize the availability of treatments, diagnostics, medicines, medical supplies and devices needed for their own nationalist agenda or to maximize profit, ahead of societal interest in tackling the Covid-19 pandemic. The private enforcement of patents and government trade restrictions may pose a dire threat to the containment of this global public health emergency. Governments should act swiftly to put in place legislation and plans to ensure that patents and trade measures do not become barriers for access to those products.
The ISDS Reform Process: The missing development agenda
By Nicolás M. Perrone
The foreign direct investment (FDI) governance agenda is centred on the reform of international investment agreements (IIAs) and investor-state dispute settlement (ISDS). The proliferation of IIAs and ISDS has contributed to narrowing the FDI agenda. A key policy question is whether this fragmented approach remains consistent with the 2030 Sustainable Development Goals (SDGs). Current FDI discussions point at the need for a holistic approach in this policy area, quite the opposite of a regime primarily aimed to protect foreign investors through treaty standards and international arbitration. The realisation of the SDGs depends on multi-stakeholder partnerships to combat poverty and provide clean water and energy to the world population. Crucially, these partnerships will require more cooperation and coordination than IIAs and ISDS can promote and nurture.
Reforms to Investor-State Dispute Settlement (ISDS) are being discussed in the United Nations Commission on International Trade Law (UNCITRAL) Working Group III. One possible reform is the development of an appellate mechanism, either as part of the proposed two-tier standing investment court, or as a stand-alone appellate mechanism. From the perspective of developing countries as host states that face possible claims from investors, how appealing is an appellate mechanism in ISDS?