A. Smith: TRIPS Waiver Sets Dangerous Precedent, Puts Future Innovation at Risk

Top Republican on the Ways and Means Trade Subcommittee Rep. Adrian Smith (R-NE) released the following statement after the World Trade Organization’s Twelfth Ministerial Conference (MC12).

“To say I am disappointed the Biden administration paved the way for the TRIPS waiver to be agreed to during this week’s MC12 is an understatement. Handing over hard-won American intellectual property will do little to address the supply chain and distribution challenges with getting the world vaccinated. Instead of looking ahead, this waiver leaves the door open for broader waivers in the future – setting a dangerous precedent that could have a chilling effect on future innovative vaccines and therapies. I will continue to hold USTR and the Biden administration accountable for this incredibly misguided step. ”

On Friday, Ways and Means Republican Leader Rep. Kevin Brady (R-TX) and Senate Finance Committee Republican Leader Sen. Mike Crapo (R-ID) condemned the Biden Administration’s decision to capitulate to the demands of some of the United States’ most disruptive trading partners at this week’s World Trade Organization (WTO) Ministerial Conference. Specifically, the Biden Administration accepted a deal that will weaken longstanding rules protecting intellectual property rights and proposed rules in new agreements. This deal will undermine US trade interests and cost American jobs.

READ: Brady, Crapo: President Biden Set America’s Interests Back at WTO – No Dispute Reform, Surrendered Crucial Medical Patents, Failed to Protect US E-Commerce, Fishing Interests

BACKGROUND:

  • TRIPS Waiver—The WTO TRIPS Agreement sets certain minimum intellectual property (IP) standards. In May 2021, the Biden Administration announced in “service of ending this pandemic,” it would support a “limited” waiver of US rights under the TRIPS Agreement, exclusively related to vaccines. Members of Congress have repeatedly asked the US Trade Representative for any evidence that waiving American innovators’ IP rights would improve vaccine access. More than a year later, the Biden Administration has yet to provide an answer. Contrary to the Administration’s announcement today, it failed to properly consult with Congress and stakeholders.

The Biden Administration waived America’s IP rights on vaccines for five years, with the possibility of an extension. Again, contrary to its claims to Congress, the Biden Administration also agreed to initiate discussions to expand the scope of the waiver beyond vaccines to medical diagnostics and therapeutics, a potentially immense category of products. The decision undermines America’s innovators who developed the world’s most effective vaccines, as well as the workers manufacturing these vaccines, and potentially empowers China’s firms that have been trying to steal US mRNA research. In fact, the Administration agreed to language that simply “encourages” China to opt-out from using the waiver, and is willing to take China’s word that it will not use the waiver.

  • Fish subsidies—WTO Members have worked for two decades to cap subsidies that are depleting fisheries around the world, including those that contribute to overcapacity and those that support China’s distant-water fleet.

The Biden Administration agreed to drop the most important provision: the prohibition on subsidies that contribute to overfishing and overcapacity. This is a loss for the environment and also fishermen in America, and in developing countries, that compete without the aid of distortive subsidies.

  • Limited Digital Transmissions Customs Duty Moratorium—For more than 20 years, WTO Members have agreed not to impose duties on electronic transmissions. The moratorium is renewed at each Ministerial Conference and should have been made permanent years ago. A strong majority of WTO Members support the moratorium, but a handful of countries threatened to block renewal of the moratorium unless their demands were met in various areas.

The Biden Administration capitulated to their demands and accepted a shorter moratorium that is presumed to expire by March 31, 2024, unless all WTO Members agree otherwise. The Biden Administration has provided those few opponents of the moratorium leverage to renew this effort in less than two years.

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