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Parliament Briefed on Covid-19 TRIPS Waiver

June 4, 2021

Department of Trade, Industry and Competition

The trade, industry and competition department has updated parliament on the TRIPS waiver on Covid-19 vaccine patents.

In a briefing, the department pointed out that South Africa and India had proposed, in October 2020, a waiver of certain provisions of the TRIPS Agreement at the World Trade Organisation (WTO).

The objective of the Waiver is to “promote universal access by removing legal impediments to sharing and using intellectual property required for the production of vaccines, diagnostics, and therapeutics”.

According to the department, the Waiver would signal a multilateral undertaking that Intellectual Property Rights rules will not constitute a barrier to boosting global vaccine production.

The department stressed that many countries have now come out in support of the Waiver.

The plan is for the Waiver to be in force for at least 3 years from the date of a decision.

Currently 63 WTO Members have co-sponsored the proposal and about 50 others have indicated their support.

The department informed the trade and industry and international relations and cooperation committees that further efforts are underway to build consensus on a meaningful outcome that is reached on an expedited basis.

“Key issues could be duration of the waiver, its scope and whether it would cover the proposed product range and the identified categories of intellectual property.”

The department also highlighted that, in parallel, discussions are taking place with pharmaceutical companies and with governments bilaterally to “address the obstacles to wider support for the Waiver and the scaling-up of production”.

Meanwhile, in a statement on additional insurance products for manufacturers exporting to countries on the African continent, the department announced a new mandate signed by the trade, industry and competition minister, Ebrahim Patel, to empower the “Export Credit Insurance Corporation (ECIC) to support South African businesses in key priority sectors, as African countries prepare for increased trade and industrialisation following the signing of the AfCFTA”.

“The ECIC product offerings will now be expanded in line with the mandate, providing product coverage to small and medium enterprises and first-time exporters, who don’t typically get access to such trade finance products.”

According to the department, the new mandate will “assist new exporters not only in mitigating the export risk, but importantly in de-risking businesses allowing them to raise capital which can increase prospects of exports to other African markets”.

Additional priority sectors will be added as discussions are finalised during the next 12 months.

Recently, the minister, during his Budget Vote speech, indicated that the department will focus on a portfolio of new sector work including global business services, film animation, the chemical and plastic sectors, green industry, medical products and capital goods.

In another statement on a local industrial programme, the minister highlighted a number of challenges with Black Economic Empowerment (BEE) implementation.

“The use of fronting arrangements and gaming of the BEE rules by firms seeks either to evade the BEE requirements or artificially inflate the true extent of transformation. Where data and claims by firms are not adequately quality-controlled, or the rules are imprecisely formulated to enable the system to be ‘played’ different to the spirit of transformation, they result in legitimate public skepticism on the real impact of BEE,” he said.

“The funding mechanisms, particularly the use of certain vendor funding structures in many cases limits the real benefit in BEE transactions. Many of these deals have been structured using what one can only call “heroic” assumptions about asset price growth. Many of these deals are now “underwater” – meaning the beneficiaries have not been able to realise the value they were promised, leaving the established firms with the BEE scorecard benefits without providing apparent beneficiaries with any real gain. It requires review,” he said.

Minister Patel announced that a Panel will be established to consider the challenges and identify measures to ensure that the policy benefits a wide number of South Africans.