EU’s Trade Response to Pandemic Stops Short of Vaccine IP Waiver

The European Union will encourage World Trade Organization members to phase out export restrictions for vaccines, but will stop short of supporting an American-backed proposal to suspend intellectual property rights meant to boost the supply of Covid shots.

The EU will propose to the WTO at a June 8-9 meeting that all 164 members decrease restrictive measures related to health products, expand the production of vaccine facilities and support an easing of regulatory hurdles, according to a draft proposal seen by Bloomberg.

EU leaders have argued that a patent waiver would only increase supply of the Covid vaccine in the longer term and that faster solutions -- such as exporting shots to countries in need -- is a more viable solution to the global crisis. Last month, German Chancellor Angela Merkel called on the U.S. to follow the lead of Europe, which “has always exported a big part of its production to the world.”

The EU has exported or signed off on the shipment of more than 300 million vaccine doses to more than 100 countries since the beginning of the pandemic, according to an EU official familiar with the matter, whereas nearly all the vaccines produced in the U.S. are kept for domestic use. The U.S. has now fully vaccinated 41% of its population while in the EU just 19% is fully immunized.

Supply Disruptions

“Vaccine and therapeutics producing countries should take a commitment to avoid disruptions in global supply chains, including in a situation where export restrictive measures have been imposed,” according to the draft EU proposal called “Global Trade Initiative for Equitable Access to Covid-19 Vaccines and Therapeutics”.

The EU proposal has three goals:

  • to ensure any vaccine export restrictions are targeted, transparent, proportionate and temporary
  • to encourage vaccine manufacturers to expand production in developing nations through voluntary licensing agreements
  • to facilitate the use of the WTO’s compulsory licensing system as it currently exists

The U.S.-backed proposal would grant “a waiver from the implementation, application and enforcement” of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, according to an Indian and South African proposal submitted last year.

Alternately, the EU recommends the use of compulsory licenses, which gives a government the ability to green-light the production of a product without the consent of the patent owner.

“Compulsory licenses are a perfectly legitimate tool that governments may wish to use in the context of a pandemic if voluntary solutions are not available,” according to the EU proposal.

©2021 Bloomberg L.P.

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