#117 The G|O Briefing, November 10, 2022

This is an onsite, slightly edited republication of the complete G|O Briefing newsletter

Today in The Geneva Observer: All things considered, in what remains a very volatile and fractured geopolitical environment, the last few weeks have been good for International Geneva. Between Brazil’s rejection of Jair Bolsonaro and America’s notable containment of Trump’s toxic MAGA ideology, multilateralism has been offered a bit of a breather.

The two events are cumulative in their effects. Brazil will expand its multilateral footprint and do so while pushing to reform global governance, aiming to make it more representative by ultimately putting an end to the current architecture of the UN Security Council, dominated by its veto-wielding ‘P5’ permanent members: the US, UK, France, China and Russia. Quite a challenge, certainly in the current context. However, if one is to believe that the existing system is irremediably doomed—and that some Western countries, despite their public denial, broadly share the analysis that statism is riskier in the long term than concerted action in the defense of liberal values, even under a new model—then the Brazilian challenge might become an opportunity.

Exacerbated by Russia’s attack on Ukraine and Beijing’s support for Moscow, the split between the totalitarian and democratic BRICS—China and Russia on one side, Brazil, India, and South Africa on the other—may bring an altogether different dynamic in trying to shape a future world order. It is telling, for example, that separated from its Cold War connotations, the old concept of non-alignment is being looked at with fresh eyes, particularly in the context of the growing US-China rivalry. “It is wiser to navigate rising economic nationalism without unconditionally adopting the foreign-policy preferences of superpowers,” writes Ngaire Woods, Dean of the Blavatnik School of Government, in our guest essay.

In the US, regardless of the final outcome of yesterday’s elections, the instant evaporation of the predicted “red-tsunami” means that America’s political convulsions will largely be felt on the domestic front and that even a Republican-controlled Congress won’t be able to derail the current administration’s engagement in Geneva for the remainder of Joe Biden’s current term.

On a more modest level, the resumption of the talks on a memorandum between Russia and the UN on the export of grain and fertilizers is another positive development for International Geneva. In spite of Moscow’s condemnation of Switzerland’s abandonment of its neutrality, the coming here of a Russian delegation—led by Russia’s deputy foreign minister Sergey Vershinin—is confirmation of the resilience of Geneva’s multilateral system.

The consensus is still that any discussions about bringing Ukraine and Russia to the negotiating table to put an end to the conflict are premature—a position reinforced by Vladimir Putin’s decision, announced today (November 10), that he will not attend next week’s G20 Summit in Indonesia. However, technical agreements, such as the one that will be discussed tomorrow at such a high level, do nevertheless offer a chance to keep important communications channels open.

If Geneva remains the city where the achievement of “peace by pieces” can be imagined, it also is the theater where major disagreements on issues of global importance come to light. Such is the case, once again, at the WTO, where the final package of the TRIPS waiver agreement is running into serious problems—as Jamil Chade reports.

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-PHM

HOW DO YOU SPELL DEADLOCK? T-R-I-P-S

By Jamil Chade

Deadlock is once again the name of the game at the World Trade Organization’s (WTO’s) Council for Trade-Related Aspects of Intellectual Property Rights—TRIPS, for short.

A communication from Switzerland and Mexico questioning the need to extend the waiver on intellectual property rights on COVID-19 vaccines to therapeutics and diagnostics is laying bare the divergences and complexities of one of the most contentious issues facing the organization.

Readers may remember that the 12^th Ministerial Conference (MC12) was hailed as a major success: “The WTO is back,” claimed, in essence, headlines around the world. In the wee hours of a sunny Geneva morning on June 17, as bleary-eyed delegates concluded their work, they announced, among other agreements, a deal on conditionally waiving patents on COVID-19 vaccines. While marking a true milestone in negotiations that had begun in 2020, when India and South Africa introduced a text demanding such a waiver, the agreement, made after intense negotiations, was narrower in scope than the original proposal. If the WTO could claim success, in reality, the agreement satisfied no one: its proponents, health activists, and civil society rejected it as too limited, while Big Pharma had fought tooth and nail to prevent any waiver agreement at all.

The June agreement explicitly called for the vaccine waiver to be extended to the “production and distribution of COVID-19 diagnostics and therapeutics” within six months of adoption, setting the deadline for passage of an agreement to December 19—the first business day after December 17. With less than six weeks remaining, time is running out. “The level of urgency within the WTO to reach consensus on this issue is difficult to assess,” global health writer Priti Patnaik, author of a newly published book on the subject, tells The G|O. “A range of countries remain undecided and have sought more information. It is not even clear whether the proponents will go the last mile to fight for this.”

Informal discussions about the extension were held in September but led nowhere.

RISING CONCERNS

In a meeting last week in Geneva, the chair of the TRIPS Council, Ambassador Lansana Gberie of Sierra Leone, said that the absence, at this late stage, of concrete, text-based proposals on the issue of the extension is “very concerning,” and urged delegations to explore all options to make progress.

The Ambassador will begin reaching out to individual members in the coming weeks to look for areas of possible convergence. South Africa, co-sponsor of the initial waiver proposal, also reported that its delegation has recently been holding bilateral contacts to try to find a way through the impasse.

The only document put forward so far has been a communication submitted on November 1 by Mexico and Switzerland, which does not represent a formal negotiating position. It does, however, raise questions about the ability of the trade body to meet its objective of reaching an agreement by mid-December.

In essence, the Swiss and Mexican communication uses the same rationale already advanced by Switzerland when opposing a waiver for COVID-19 vaccines at the height of the pandemic: a waiver would not, argued Switzerland and its pharmaceutical industry, along with a number of Western countries, accelerate the rate of vaccination in the world, because the main problem lies, the industry claimed, in the manufacturing and distribution of the newly developed vaccines.

Today, the two countries write, the same argument can be made, even if in this case, the problem is not one of scarcity but of a surplus of available therapeutics and diagnostics: “No shortage of therapeutics exists. Instead, large parts of innovators’ production capacity remain idle due to lack of demand. […] This involves issues with logistics and distribution, which are not IP-related, but that need to be addressed.”

Diplomatic sources close to the negotiations tell The G|O that as it stands now, governments are broadly divided into three groups.

Those who favor the extension of the waiver to include therapeutics and diagnostics include South Africa, India, Kenya, Indonesia, Zimbabwe, Pakistan, Egypt, Bolivia, Argentina, Venezuela, and the African, Caribbean and Pacific Group of states.

Countries questioning the need for an extension include Switzerland, Singapore, Japan, Canada, Korea, the European Union and the United Kingdom.

A third group, consisting of Colombia, Costa Rica, Uruguay, Mexico, China and Chinese Taipei, is considering a compromise solution; a limited extension to include a specific list of therapeutic and diagnostic products. Today, over 1,800 COVID-19 therapeutics are currently in different stages of the R&D pipeline.

The joint Swiss–Mexican letter notes that 138 bilateral voluntary licensing agreements with 127 countries have resulted in the creation of 191 production sites for COVID-19 therapeutics worldwide. Based on this information, the communication states, “we do not face a situation where we have an IP-induced lack of access to or a lack of manufacturing capacity of COVID-19 therapeutics and diagnostics. As a consequence, no adjustments to the IP system seem to be required.”

However, these arguments have so far failed to sway the proponents of a broad waiver as initially proposed by India and South Africa. “The European Union, Switzerland, and the United Kingdom are playing a cynical game of running down the clock in WTO negotiations on extending the [MC12 TRIPS agreement] to diagnostics and therapeutics,” Thiru Balasubramaniam, Geneva Representative of Knowledge Ecology International, told The G|O.

Balasubramaniam also noted that just this week, WHO’s Director-General, Tedros Adhanom Ghebreyesus, said that “one of the most important lessons of the pandemic is that manufacturing capacity for medicines, diagnostics, vaccines and other tools is concentrated in too few countries.”

For Balasubramaniam, “WTO members expressing doubts about the barriers posed by intellectual property with respect to accessing COVID-19 therapeutics and diagnostics should pay heed to the advice of the World Health Organization, the leading authority on global health.”

The TRIPS Council will meet again, informally, on November 22. “We do not have a lot of time,” the Chair acknowledges. Further meetings are scheduled for December 6, with the possibility of calling members for another meeting on December 15, four days before the deadline.

-JC, with PHM

IN DEFENSE OF NON-ALIGNMENT

By Ngaire Woods*

Critics of geopolitical non-alignment have long characterized it as a flawed and doomed policy, and in the wake of Russia’s invasion of Ukraine, non-alignment is rapidly falling out of favor. After all, Ukraine was invaded because it was not a member of NATO, causing Sweden and Finland to abandon their long-held neutrality and apply to join.

But non-alignment, or the refusal to ally with any major power unconditionally, may be necessary to restrain the world’s superpowers. Otherwise, their increasing nationalism could lead to a global order antithetical to the interests of all other countries.

Economic nationalism is on the rise among the world’s major superpowers. A 2019 report by the Peterson Institute for International Economics highlighted then-US President Donald Trump’s advocacy of protectionism, restrictions on inward foreign investment and immigration, and rejection of multilateral constraints. Previously, the United States offered allies its commitment to a rules-based international order and shared security, which President Joe Biden’s administration seeks to restore. But Trump’s “America First” narrative has changed that offer, and many Republican candidates in November’s midterm elections are vowing to weaken it further.

“The new nationalism of superpowers forces other countries to make some hard choices.”

China is also reshaping its offer to potential allies. Ten years ago, China’s Belt and Road Initiative promised partner countries generous funding for infrastructure and development projects as Chinese policymakers created a powerful network of economic, financial, political, and security relations across the world. Those investments are now being scaled back as China takes a harder-nosed commercial approach to overseas ventures.

Likewise, just six years ago, President Xi Jinping pledged support for a global rules-based order. At the Communist Party of China’s 20th National Congress this month, he declared that profound changes in the international landscape and external attempts to blackmail, contain, and blockade China mean that “we have to put our national interests first.”

The new nationalism of superpowers forces other countries to make some hard choices. During the Cold War, aligning with the US enabled Western European countries to benefit from open trade and rebuild their economies and democratic systems. But other countries derived no such benefits and responded to the Cold War accordingly. The Non-Aligned Movement was founded in 1961, championed by Egyptian President Gamal Abdel Nasser, Ghanaian President Kwame Nkrumah, Indian Prime Minister Jawaharlal Nehru, Indonesian President Sukarno, and Yugoslav President Josip Broz Tito.

Non-alignment’s achievements

Non-alignment during the Cold War never meant not taking sides. Within a year of founding NAM, Nehru turned to the US for assistance in the Sino-Indian War. A decade later, Nehru’s daughter, Prime Minister Indira Gandhi, turned to the Soviet Union for help. Egyptian President Anwar El-Sadat famously dumped the Soviets for the Americans in the early 1970s. To a degree, non-alignment enables some countries to pit one side against the other for investments, aid, arms purchases, and security arrangements.

“The new nationalism of superpowers forces other countries to make some hard choices.”

It also enables countries to hold superpowers to account. Non-aligned Singapore, for example, refused to support Indonesia’s invasion of East Timor in 1975, opposed the US invasion of Grenada in 1983, and has condemned Russia’s invasion of Ukraine. The countries comprising the Organization of American States have condemned Russia’s invasion and suspended its observer status. But they have not joined the US-led sanctions against Russia, citing the effects on people in Cuba and Venezuela. Kenya voted to condemn Russia’s invasion of Ukraine in the UN General Assembly, but a month later abstained from the vote to remove Russia from the Human Rights Council. Kenyan Ambassador Martin Kimani reminded the world that the West had suspended Libya from the Human Rights Council as a precursor to invading the country, with disastrous consequences for Libya’s neighbors.

Today’s emerging nationalism requires economic self-reliance, which can be difficult to achieve after decades of actively participating in global markets. To strengthen its financial resilience, India has accumulated more than $500 billion in foreign-exchange reserves, while Brazil increased its reserves to over $300 billion. Another way to strengthen resilience is to reduce foreign debt. In the mid-2000s, 46% of Indonesia’s public debt, and 83% of Chile’s, was denominated in foreign currencies. By last year, Indonesia and Chile had cut this share to 23% and 32%, respectively.

But boosting self-reliance can be difficult even for wealthy countries. For example, a recent report by the European Council on Foreign Relations argues that the European Union must improve its technological capabilities if it wishes to act according to its values “without being bullied by others.” With such considerations in mind, the EU has already taken steps toward its goal of greater strategic autonomy by establishing the European Battery Alliance, which aims to develop a competitive and sustainable battery value chain on the continent.

But there is still a long way to go. The global power balance is shifting as the US-China rivalry escalates. Moreover, both superpowers face domestic political challenges that could affect their foreign policies. In the meantime, other countries should not be faulted for pursuing non-alignment to achieve self-reliance. Perhaps resisting the pull of the major superpowers can help to ensure a more equitable world order.

*Ngaire Woods is Dean of the Blavatnik School of Government at the University of Oxford.

© Project Syndicate, 2022.
www.project-syndicate.org

Today's Briefing: Philippe Mottaz - Jamil Chade

Guest essay: Ngaire Woods

Edited by: Dan Wheeler