Permanent Mission of the European Union to
the World Trade Organization (WTO)

European Union Statements at the General Council meeting, 27-28 July 2021

Geneva, 28/07/2021 - 00:00, UNIQUE ID: 210728_4
Local Statements

Statements delivered by Ambassador João Aguiar Machado

2.         Implementation of the Bali, Nairobi and Buenos Aires Outcomes

The Nairobi Ministerial Decision on Export Competition was adopted in December 2015. The European Union continues to urge the remaining Members that have not yet submitted their revised schedules, to make the necessary schedule modifications to eliminate export subsidy commitments as soon as possible and indeed in time for MC12. 

The 2021 Export Competition Questionnaire was the first occasion on which developing countries were required to submit replies. The European Union is disappointed with the low response rate. We will be interested to discuss this further in the regular Committee on Agriculture in September. The European Union also looks forward to the discussion in the Committee on Agriculture regular meetings on the triennial review of the Nairobi Decision. We count on Members’ active participation on how to enhance disciplines and ensure no circumvention of commitments.

The European Union notes that India has invoked the Bali Ministerial Decision on public stockholding for the second time in its DS:1 notification submitted on 8 April 2021. This notification was examined in the June Regular Committee on Agriculture together with the remaining questions from last year’s notification to which India still has to reply in full. We look forward to further engagement in the next regular Committee on Agriculture meeting.

On the Bali Ministerial Decision on Tariff Rate Quota (TRQ) administration, the European Union is pleased to see the progress made in the last regular Committee on Agriculture on the Bali TRQ review, and in particular the text on changing the wording for the under-fill mechanism, which was proposed by Costa Rica. We are optimistic that further progress can be made in the coming regular Committee on Agriculture. We urge the membership to engage on this issue and work constructively.

We would underline that the result of the discussion on this in regular Committee on Agriculture should lead to a decision by Ministers at MC12.

 

4.         TRIPS Council matters

A. Status report on the considerations by the TRIPs Council on the revised "Proposal for a Waiver from certain provisions of the TRIPs Agreement for the prevention, containment and treatment of Covid-19” (IP/C/W/669/REV.1)

The European Union thanks Ambassador Sørli for his status report. The European Union is strongly committed to achieving our common goal: to continue ramping up production, to share COVID-19 vaccines and medicines more widely and faster, and to ensure equitable access to these products for low – and middle-income countries.

The European Union is making every effort to fight the pandemic. The European Union is the biggest producer of mRNA vaccines and is therefore at the forefront of deliveries of vaccines to the rest of the world: so far, more than 500 million doses have been exported from the European Union and similar amounts have been delivered to Europeans.

The European Union and its Member States have also been the largest donor to the COVAX facility: 3.2 billion EUR have been committed to support equitable distribution of vaccines.

We already see enormous progress in the total global production of COVID-19 vaccines: according to Airfinity, a billion doses were produced by April 12, another billion were produced by May 26 and the third billion by June 22. It is clear that the production is accelerating and is therefore realistic to expect that some 10 billion doses will be produced by the end of 2021. For comparison, the total global output of all vaccines before COVID was only 5 billion doses.

To support short-term actions for ramping up vaccine production, the European Commission set up a vaccine task force in the EU whose objective is to match supply with demand and to lift bottlenecks. Its main tasks are to promote partnerships through matchmaking events. And this has brought tangible results: we have seen that so far, technology transfer is working well with a number of high-level partnerships announced recently. Fifty three (53) EU manufacturing sites are already engaged in relation to the COVID-19 vaccines, based on voluntary partnerships.

Important partnerships are forged also outside of the European Union Just to give an example – recently Pfizer has signed a letter of intent with the South African company Biovac, to manufacture the Pfizer-BioNTech COVID-19 Vaccine for distribution within Africa. Technology transfer, on-site development and equipment installation activities will begin immediately. It is expected that the facility will be brought into the supply chain by the end of this year. Biovac will obtain drug substance from BioNTech’s facilities in Germany, and manufacturing of finished doses will commence in 2022. At full operational capacity, the annual production will exceed 100 million finished doses annually. All doses will exclusively be distributed to the fifty-five (55) Member States of the African Union.

Beyond the current crisis, it is also necessary to build resilience of the health systems in those countries, which do not have their own manufacturing capacity and are overly reliant on imports. To this end, the European Union and its Member States are launching an initiative to develop vaccine production in the African continent entailing investment in infrastructure and production capacities as well as skills development, supply chains management, and the necessary regulatory framework in order to create conditions for technology transfer. The objective is to develop a number of regional hubs distributed across the African continent. And we have already identified promising projects in South Africa, Senegal and Rwanda. One billion EUR has already been allocated from the EU budget and the EU finance institutions to deliver on this goal.

On July 9th, the EU signed in Dakar a 6.7 million EUR grant in support of Institut Pasteur Dakar, in Senegal, to produce the anti-Covid 19 vaccine by early 2022 with a production capacity of 300 million doses of vaccines per year. Rwanda is also receiving EU support to enhance its manufacturing capacities and strengthen regulatory frameworks.

These are only examples showing the range of efforts and actions that are taken – it is clear that the response must go beyond the matters related to trade. But trade may and should play a role in enhancing access to COVID-19 vaccines and medicines.

The intense discussions in various fora have demonstrated that limited manufacturing capacity, restricted access to raw materials and other inputs as well as complex supply chains are the main bottlenecks as regards the production and distribution of COVID-19 vaccines. In addition, having the required know-how is key due to the complexity of the production process of these vaccines. Last week, the WTO published information on the bottlenecks regarding critical products to combat COVID-19 that confirms these findings.

Trade-related measures, if agreed swiftly, could address some of the bottlenecks and make a real difference. We need to look into export restrictions, minimise barriers to trade and put forward trade-facilitation measures. We will further discuss these issues in a separate point of our agenda today.

Given the nature of the identified bottlenecks and the need for the sharing of know-how, the European Union does not believe that the proposed suspension of the TRIPS Agreement by the waiver proposed by South Africa, India and a number of other WTO Members, is an appropriate and effective response.

The proposed waiver will not increase production of COVID-19 vaccines and medicines, as it will not address any of the existing bottlenecks that have been identified. It rather risks having counterproductive effects on our common efforts to enhance access to such vaccines and medicines. In particular, it will undermine the ongoing collaborations, which are based on the well-established platform of intellectual property protection and will have a chilling effect on future such collaborations.

In addition, the waiver may have harmful effects going forward when it comes to fighting future pandemics and more generally on incentives for research and innovation. The European Union has provided details on these risks in the discussions in the TRIPS Council. 

The intellectual property system is not an obstacle to the access to COVID-19 vaccines and medicines. To the contrary, it has played the key role in the development of these products and can play an enabling role in deploying existing capacity or creating new capacity for the production of COVID-19 vaccines and medicines. The European Union believes that it is possible to enhance the role of the IP system while at the same time maintaining the protection required for incentivising technology transfer and investment in innovation, so that we can fight against new strains of COVID-19 and any future diseases. It is to this end that the European Union has put forward an alternative proposal to the proposal on the waiver – the European Union proposal focuses on the clarification and facilitation of the use of compulsory licensing system.

The compulsory licensing system provides for tools that can be used in times of the pandemic to overcome potential IP-related obstacles, it also provides enough legislative space to apply the system in a swift manner. The proposal is meant to clear any doubts that may persist about the use of the system and to indicate ways in which the system can be used in a fast and simple manner that is fully adapted to the challenges of the pandemic.

We have proposed clarifications on the elements that we find most relevant for the situation of the pandemic, that is the fast-track procedure that omits negotiations with right holders; the support for manufacturers wishing to supply to low- and middle-income countries at discount prices; and the simple single notification to be made by the exporting country to speed up exports. We have also emphasized that the European Union remains open to discuss other aspects of the compulsory licensing system that merit clarification and facilitation. This discussion has already started in the TRIPS Council.

In our view, clarifications on the proposed aspects would provide the necessary legal certainty to Members to intervene and swiftly grant compulsory licences including for purposes of export to countries that are lacking manufacturing capacity. Our approach would also promote production and supply of those products to low- and middle-income countries at affordable prices, including via the COVAX Facility.

Given the stalemate we are experiencing in the TRIPS Council, we encourage all WTO Members to try to find convergence on the basis of the European Union proposal as the one that is pragmatic, targeted and effective in responding to the current needs while keeping intact the necessary incentives for innovation. It is through the targeted approach proposed by the European Union that we believe we can advance in our discussions on the intellectual property element of the WTO response to the COVID-19 crisis and finally pave the way for advancing on the other parts of the needed comprehensive approach.

We are ready to discuss all the requirements of the compulsory licensing system, requirement by requirement, to see what issues there are, how they can be addressed and how we can make the system function. We thank all Members for their engagement on our proposal and for their contributions, questions and thoughts on it so far. We have received valuable feedback and we are pleased to see the interest of various delegations on this approach. And we look forward to our continued discussion and hope to be able to agree on an outcome in advance of the November Ministerial Conference.

 

6. Work Programme on Electronic Commerce and Moratorium on imposing customs duties on   electronic transmissions

The European Union would like to underline that the moratorium on customs duties on electronic transmissions provides the predictability and security that our consumers and businesses – in both developed and developing countries – need when engaging or planning to engage in e-commerce.

We would also like to recall that several recent economic studies have provided solid new evidence on the positive economic implications of the moratorium.

The European Union remains committed to continue engaging in structured discussions on the moratorium in line with the General Council decision of December 2019, taking into account the new evidence that has been published over the last couple of years on the multiple benefits of the moratorium for businesses and citizens alike.

While Members had decided to extend the moratorium until MC12, the European Union hopes that our Ministers will be a position to consider a longer term – if not permanent – extension at the next Ministerial Conference.

 

7. Preparations for the Twelfth Session of the Ministerial Conference

A. WTO Response to the Pandemic

The European Union thank you Chair for your report as well as Ambassador Walker as Facilitator on the WTO response to the Covid-19 pandemic.

The European Union will be engaging fully and contributing to the discussions ahead of us to prepare MC12.

The European Union would like to raise an issue of concern. We are two months and a half away from MC12. A number of thematic sessions are planned in various areas – fisheries, the response to the pandemic, intellectual property, agriculture and other issues.

What is missing in our view is a clear roadmap on how these different strands will be organised and come together in a process to deliver an outcome for MC12. It would therefore be useful to have a clear roadmap for our work in the autumn on the basis of an agenda that is feasible and realistic.

 

8. Contributions to the Multilateral process on the WTO response to the Pandemic

B. Urgent Trade Policy Responses to the Covid-19 Crisis (WT/GC/231)

Beyond individual actions by Members, the agenda of this meeting suggests that expectations are high that the WTO membership would provide a collective and solid contribution as part of the international efforts to respond to the COVID-19 pandemic. As the membership is endeavouring to shape the “how?” the European Union has sketched out its views in this respect in the Communication on urgent trade policy responses. We should build on the lessons learnt and, in a solution-oriented mode, take a holistic approach to the issue.

As WTO Members, our prime responsibility is to enable a trade-conducive environment. We have suggested enhanced emphasis on a restraint from unnecessary export restrictions in particular where the exporting member is a substantial producer of vaccines and other essential goods.  We also underscore the need to respect the highest degree of transparency, when it comes to notification of or information about all measures that have a trade restricting effect. In that sense, the European Union firmly believes that the proposed Council Declaration on Trade and Health just presented under the preceding point provides an effective and robust way forward.

Needless to say, trade policy cannot be conducted in isolation. There is room and need for strengthened collaboration both with relevant international organisations and private stakeholders, including the industry.

In this regard, we welcome the High Level Dialogue that took place on 21 July at the initiative of the WTO Director General and the WHO Director General.

We should support the private sector in its unprecedented efforts to increase vaccine production by maintaining open supply chains and improve the way we monitor trade flows and market developments.

Equitable vaccine distribution requires acknowledgement of the different level of development of recipient countries and exploiting any available manufacturing potential. Therefore, the European Union strongly encourages the industry to engage in voluntary licensing agreements for vaccine production and distribute vaccines at affordable prices, involving no profit, to low and middle-income countries. As indicated in a previous point of the agenda, we are also ready to discuss how to facilitate the issue of compulsory licences.

This crisis has brought to our attention the striking reality that building crisis resilience requires investment in domestic manufacturing facilities. It is of particular relevance in those regions, which have a limited industrial base and heavily rely on imports. However, the much-sought investment will only happen in a business friendly environment, which means the right regulatory framework that also includes protection of intellectual property.

The views set out in this Communication are a genuine contribution and a support to the multilateral process aimed at shaping a WTO response to the pandemic at the latest by MC12. We are ready to further engage with the understanding that such response should be meaningful and equip us to address the global challenges of today and of tomorrow.

 

10. Trade related challenges of the Least Developed Countries and way forward: A draft for MC Decision (WTO/GC/W/807)

Submitted in writing to be included in the minutes of the meeting:

The European Union is mindful of the challenges that Least Developed Countries face in integrating in the global trading system. The European Union also recognises that while graduation is a positive and remarkable milestone to be celebrated, many  graduated Least Developed Countries have not, at the time of their graduation, achieved the same level of capacity and integration in the global economy of those developing countries that are better integrated in the global trading system. A smooth transition after graduation may therefore be needed in some cases.

The European Union does believe that there should be support and flexibilities for WTO members, commensurate with their needs and capacity constraints, beyond the group of Least Developed Countries.

As noted previously, this is established in the European Union’s trade and cooperation policies that provide support for Least Developed Countries, for countries that have recently graduated from the Least Developed Countries status, as well as other developing countries.

In the area of trade specifically, the aim of the European Union is to focus on how to facilitate and enhance the capacity of countries to assume commitments that foster integration in the global economy. In our view that is the best way that the WTO can effectively contribute to sustainable development.

In that spirit, the European Union will continue to support constructive initiatives to better integrate members with capacity constraints into the multilateral trading system, and to take into account in that connection the specific situation of  graduating Least Developed Countries.  We especially encourage discussions based on analysis that shows where specific difficulties exist.

We look forward to hearing the views of other members and we thank in particular the Least Developed Countries group for their continued constructive engagement in this matter.

 

11. Procedural guidelines for WTO Councils and Committees addressing Trade concerns (WT/GC/W/777/REV.6)

On behalf of all co-sponsors, the European Union would like to provide an update about our work on the proposal for "Procedural Guidelines for WTO Councils and Committees Addressing Trade Concerns".

To recall, this proposal aims to improve how WTO Members address each other’s trade concerns in regular WTO bodies.

For more than a year, co-sponsors of the proposal have continued to listen to concerns and suggestions. We would like to thank Members for the feedback we received. This revision comes as a response to that. It is an honest and serious attempt at capturing a possible common ground.

We sense support for the ideas in the first part of the proposal on meeting arrangements - this part remains.

We also heard some concerns around the part dedicated to the informal resolution of trade concerns. Although co-sponsors are convinced that these elements could have helped, we have taken them out. The emphasis is now more on Member-to-Member consultations, where Members can, if they deem appropriate, associate the WTO Secretariat or technical experts to benefit from their technical input.

A number of changes have also been introduced as regards the consideration of trade concerns in WTO bodies. For instance, Members are encouraged to engage in writing but a longer timeframe is suggested for Members to provide a written response (60 days now instead of 30 days).

This was a rapid and non-exhaustive brush of the amendments but gives a sense of the flexibilities included.

The overall approach of the proposal remains unchanged, namely that of non-binding guidelines with the objective to give guidance to Members to use tools at their disposal, while the responsibility remains of course on Members to address and do their best to resolve trade concerns.

We hope that we can move forward on the basis of this revised text and look forward to stepping up engagement with other Members.

 

13. G90 Declaration on Special and Differential Treatment (WT/GC/234)

The European Union has on numerous occasions underlined its support for special and differential treatment of WTO Members. Especially for the Least Developed Countries but also for other Members who have specific needs. It is our priority to ensure effective, precise and operational special and differential treatment in the WTO in order to enable these Members to apply and benefit from the agreements concluded.

The European Union firmly believes that if WTO is to prosper, Special and Differential Treatment must become much more granular, in function of an individual Member's demonstrated needs and capacities. Future differentiation should be designed in terms of specific individual country needs at the sectoral or activity level rather than calling for a block exemption of a large category of Members. Furthermore, the European Union considers that each developing country's need for Special and Differential Treatment should be assessed on a case-by-case and evidence basis.

We take note of the declaration submitted by South Africa on behalf of the G90. The European Union is of the opinion that continuing the discussion based on the 10 proposals of the G-90, will neither lead to an outcome nor provide the basis for increasing understanding and cooperation between Members, which is much-needed.

Second intervention

We welcome the conversation. We firmly believe we need such a conversation in the autumn; we need a renewed and fresh discussion on Special and Differential Treatment - on a different basis.

Reaping the benefits is through the rules, not by being outside of the system. The division between mandated and future issues is artificial. We need to be honest: the DDA failed: this was an overall package and we did not succeed. Looking at the ten requests, it include requests for derogation from provisions from 1947 – for instance balance of payments - or in relation with TRIMS, which is a clarification of GATT rules. We need a reality check. We need a renewed understanding on Special and Differential Treatment.

This was a good opportunity for a frank exchange of views.

 

14. Paper titled “The legal status of Joint Statement Initiatives and their negotiated outcomes” (WT/GC/W/819)

The European Union thanks South Africa and India for the presentation of the paper.

At previous General Council meetings where this submission was discussed, it was clear that a very large number of WTO Members are involved in plurilateral negotiations under the Joint Statement Initiatives and support such approaches, which can bring real benefits and ensure that the WTO continues to engage in matters of importance to its Members relevant to today’s trade challenges.

For the sake of time, I will not reiterate the many arguments in favour of plurilaterals – nor the legal basis for plurilaterals within the WTO framework - but simply stress that maintaining the option of developing rules that respond to current economic and trade realities through plurilateral agreements is absolutely vital for the WTO’s relevance and credibility. Rejecting this option would condemn the WTO to irrelevance. We cannot stress this enough.

We also believe we should avoid having too legalistic a debate in this setting on the legal claims of this submission, many of which are simply not valid in our view, as we have pointed out in previous General Council meetings or in the Working Party on Domestic Regulation (when it comes to the specific claims made against the Joint Statement Initiative on services domestic regulation). Just to point to two elements:

First, nowhere in the WTO rulebook does it say that Members need a consensus to start exploratory talks and indeed negotiations on issues of shared interest, as the submission seems to suggest. The WTO rulebook provides for a number of options to give outcomes negotiated in such context legal effect, such as through scheduling of additional commitments in the individual Members’ schedules.

Secondly, the GATS in its article XIX:4 specifically refers to the progressive liberalisation to be advanced through bilateral, plurilateral or multilateral negotiations. Therefore, there is nothing inconsistent with the GATS.

We are however, in favour of discussing this issue further with Members in a constructive and coordinated manner. As part of future work on how to improve the functioning of the WTO, we would favour having discussions on the relationship between the WTO architecture and plurilateral agreements.

The European Union favours an inclusive approach to open, plurilateral agreements that facilitates participation by developing countries and allows them to decide whether they wish to join the agreement, leaving the door open for them to join in the future if they so wish. We hope that many Members will support our approach.

We encourage more Members to join the ongoing Joint Statement Initiative negotiations, which provide an essential tool to modernise the WTO rulebook.

 

15. Proposed General Council decision on procedures to enhance transparency and strengthen notification requirements under WTO Agreements (JOB/GC/204/REV.6 - JOB/CTG/14/REV.6)   

Submitted in writing to be included in the minutes of the meeting:

As mentioned by the United States, the proposal has changed over time and the latest revision of June is an honest attempt to address the concerns that have been raised by Members.

Improving on notifications will admittedly require efforts from all Members. Cosponsors are willing to do their part too - all notifications are now subject to the same treatment.  This revision also lays more emphasis on improving the existing tools at our disposal, as well as technical assistance and capacity building. It takes account of the particular constraints of Least Developed Countries by exempting them from administrative measures if they request assistance.

We believe this revised proposal provides a solid basis for further engagement with Members in view of reaching agreement for an outcome at MC12. If concerns remain, we would encourage Members to come up with concrete ideas and suggestions that would effectively support Members’ efforts to improve in the crucial area that is transparency.

 

17.   Strenghtening the multilateral character of the World Trade Organisation – Request from the African Group

The EU welcomes this constructive contribution of the African Group, pointing to the particularly negative impact the COVID-19 pandemic has had on developing countries. Furthermore, the European Union also agrees with the necessity that the global trading system and therefore the WTO increase its capacity to promote resilience, preparedness and effective response to common challenges, including future pandemics.

We believe that for this to happen, WTO Members should come together at MC12 to launch work on institutional reform of the Organization, addressing all three of its core functions – rulemaking, dispute settlement and monitoring/deliberation. We welcome a constructive dialogue with the African Group in this regard.

At the same time, the European Union is committed to preserving the core tenets upon which the WTO has been built, and agree that aiding development and effectively integrating developing countries into global trade needs to remain at the core of WTO action.

We agree that special and differentiated treatment is important for many WTO Members. It is our priority to ensure effective, precise and operational special and differential treatment in the WTO in order to enable these Members to apply and benefit from the agreements.

The European Union will continue to support constructive initiatives to strengthen the WTO and support developing countries to better integrate Members with capacity constraints into the multilateral trading system. We would like to thank the African group for their contribution in this matter.

 

 

Editorial Sections: