Crapo, Brady: President Biden Set America's Interests Back at WTO -- No Dispute Reform, Surrendered Crucial Medical Patents, Failed to Protect U.S. e-Commerce, Fishing Interests

Washington, D.C.--U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the U.S. Senate Finance Committee, and U.S. House Ways and Means Republican Leader Kevin Brady (R-Texas) issued a statement condemning 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 U.S. trade interests and cost American jobs.

“The WTO is a vital forum for addressing the United States’ trade challenges—which include countries increasingly resorting to injurious subsidies, undermining our leadership in digital trade, and stealing our intellectual property.  Instead of strengthening WTO rules in these areas, the Biden Administration set America’s interests back by failing to achieve any real reforms of the broken WTO dispute system, surrendering America's crucial medical patents and failing to protect both U.S. fishing interests and long-term protections against higher costs of e-commerce."

“America’s innovators, workers, and farmers deserve a trade policy that increases opportunity in foreign markets and ensures our competitors play by the rules.  Now more than ever, we need new rules to take on challenges such as distortive subsidies and intellectual property theft.  From the start, the Biden Administration has made it clear that it is not interested in negotiating any rules that facilitate such market access opportunities for Americans.  Indeed, the Administration has shown indifference on trade, including by failing to articulate any priorities for the WTO Ministerial Conference.  Even on the day the negotiations were concluding, the Biden Administration refused to share its views on key text proposals tabled at the ministerial with Congress.  As a result, a handful of countries achieved sweeping outcomes that undercut America’s interests.

“These outcomes reflect a basic truth that the Biden Administration has ignored completely when it comes to trade: either we write the rules, or someone else will write them for us.  Today, a handful of other countries wrote WTO rules that are bad for America’s economy, for our innovators, and for the global environment.”

Background:

*TRIPS Waiver—The WTO TRIPS Agreement establishes 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 U.S. rights under the TRIPS Agreement, exclusively related to vaccines.  Members of Congress have repeatedly asked the U.S. 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 U.S. 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 twenty years, WTO Members have agreed to not 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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