Lori Wallach, of Public Citizen’s Global Trade Watch, and Jayati Ghosh, economics professor at UMass Amherst, discuss how first world countries are protecting pharma companies’ exorbitant profits, at the expense of vaccinating people living in the Global South and thereby also endangering everyone in the world.
Transcript
Rob Johnson:
Welcome to Economics & Beyond. I’m Rob Johnson, president of the Institute for New Economic Thinking.
I’m here today with Lori Wallach. She’s the director of Public Citizen’s, Global Trade Watch, and has been an expert on trade issues and congressional elements of trade bills for more than two decades, as I recall. And I’ve been, I don’t know that you can call it a subscriber, but I’ve been a watcher and follower of her wisdom for a very long time. We also have Jayati Ghosh, who’s a professor of economics at the University of Massachusetts in Amherst.
She’s a member of the Commission on Global Economic Transformation that INET has fostered. And she has a forthcoming course, I am proud to say that INET has made with her, on the issues related to feminist economics. And as I’m reading about climate and all of these sorts of things, I do believe that the world used to be run by goddesses. So I thought I would play a catalytic role to put power back where it belongs by asking the two of you to join me today.
Anyway, Lori, let’s start with your perception of the recent interaction between president Joe Biden, Angela Merkel, the WTO and the, which I might call, protection of intellectual property rights, perhaps to the detriment of humankind, both in the north and in the south.
Lori Wallach:
Well, thank you very much. And stepping back one bit further, the thing to understand is, right now in the world, there’s a dire shortage of the vaccines, the treatments, the tests we need to actually defeat COVID. And it puts the whole world at risk. There are now 10 countries that have consumed 85% of the 5 billion vaccines that have been made. 10 to 14 billion vaccines are needed to be able to vaccinate the world. We’re no place close to that production capacity. And one incredibly important reason why, is right now under intellectual property rules that are enforced in part by the World Trade Organization, a handful of vaccine producers are allowed to control if, when, how much, and where vaccines and other COVID medications are produced. And it’s not in their interests. They’re not looking at this as a public health matter, they’re looking this as a business matter.
So from their perspective, the increase in production necessary to actually make sure everyone can get vaccines and that we’re all safe and that we can beat COVID is not a priority. So the World Trade Organization comes in and this fight over what’s called the TRIPS Waiver or the waiver of an agreement called, the Agreement on the intellectual Trade Related Aspects of Intellectual Property, TRIPS, comes in because the World Trade Organization, which has 160 countries as its members, obligates every member country to enforce long monopoly protections of intellectual property for drug makers. So right now what we need is to get the intellectual property barriers out of the way, to have governments push on these handful of companies that have successful vaccines to transfer the technology. They can charge, but to share it. And funding to increase manufacturing capacity, particularly in the global south. So that the volume of vaccines that are the best vaccines with this excellent technology can be shared worldwide, and we can all be safe.
So for many, many months, starting in October of last year, South Africa and India made a proposal to temporarily waive those WTO restrictions on the access to medicines. And the United States under Trump led a small but mighty coalition of northern countries plus Brazil, to block this. The Biden administration on May 5th reversed course and came out in support of a waiver of these rules, at least with respect to vaccines. And then twisted some arms and got Japan to stop blocking and Australia to stop blocking, Canada and Mexico.
Yet at this moment, even though there’ve been negotiations for two months and the Delta variant is burning through the global south, murdering people - murdering, unnecessary death - this is not the COVID deaths you can’t help. This is not enough vaccines, we could do something about this. Despite this, right now Germany has pushed the entire European Union to oppose this waiver, and hiding behind them are the UK and Switzerland. It is those three entities versus 140 countries that want this waiver, and the whole thing is jammed. And the Biden administration, I’m sad to say, which has many times in the past - the U.S. government made things happen at WTO - has not taken the leadership role to overcome this European opposition, including when Angela Merkel came for a valedictory visit to Washington two weeks ago. That’s the situation, that’s the setting.
Rob Johnson:
And I’m surprised. I mean, the hideousness related to human life that you described is obviously the most important measure of this failure. But even guys sitting around with three piece suits that are financiers, ought to see that the pandemic relief, in the realm of trillions of dollars. We could save more lives and save money at the same time if we could release this vaccine, like you mentioned. Was it 14 billion? Roughly two shots times 7 billion people. It’s terrifying to me how unmindful all of this is.
Jayati, you come from India, you’re at the belly of the beast as they say. How do you see this tragedy? And in light of Lori’s description, what can we do about it?
Jayati Ghosh:
What’s going on is nothing short of obscene. I think Lori laid it out very well, that basically it’s certain governments standing behind pharma companies at the expense of everyone in the world. And here, I want to emphasize, it is true that right now, this variant is ripping through developing countries, every day, thousands of people are dying unnecessarily. And many more will die in the months to come. Hundreds of thousands will die in the months to come, unnecessarily. And it has been allowed to happen because pharma companies are restricting production, and governments are allowing them to do this. And what Lori mentioned is absolutely true about the WTO. But that’s just the first step in the process of ensuring greater vaccine production. What is really important is that these companies share their technology. And let’s face it, the Biden administration also could make these companies share their technology.
Moderna is almost entirely publicly funded. It was really done with publicly funded research and with research done in public labs. The mRNA technology, largely, it’s only the last mile that was done at all, even by these companies that were involved, like BioNTech and so on. So you could twist the arms of the companies that are making these vaccines and say, “Share your technology.” There is in fact a mechanism. The WHO set up a COVID-19 technology access pool, as part of its, what is called Accelerator, ACT-Accelerator action on COVID. Yet not one major company has joined that. Now the United States government could tell Moderna, “We gave you all the money. We created the technology, share it. We will refund you. We will reimburse you for this.” But they’re not doing that. Now, this has consequences of course, for the nature of the disease, because it means that people are dying across the developing world.
But it’s not only the developing world, these variants come back to hit you. And we are discovering that even in the UK, in Europe, in the United States, because these variants are now going to eventually not be susceptible to vaccines. But here’s the thing: the business model of these big pharma companies would actually prefer a situation where this is an endemic disease and you have to keep having boosters. So I’m not saying these are bad people, I’m saying the natural tendency of a big pharma company will be to create a situation where you are constantly requiring different versions of the vaccine. And that’s what they will get as long as you can allow this disease to proliferate. And you can do that by denying the rest of the world vaccines. So, in other words, it’s not an accident that we’re getting this.
I also want to point out there’s another way in which this protection of intellectual property rights and this control over publicly funded technology of this pharma companies, has had terrible impact even in the developed world. And that is because you’re really spending far too much on these vaccines. There’s a brilliant report out today from Oxfam and the People’s Vaccine Alliance, which is using research done by Public Citizen, I was very impressed to see, which has calculated the cost of these mRNA vaccines. Now, remember if you take out the R&D costs, which have already been paid for, they’ve already been subsidized by the governments, which have paid all this money for the R&D. If you take that out, the production costs of these mRNA vaccines are between $1.85 and $2.15. Going by that, they are charging governments anything in the range of four to 40 times the cost of production. I mean, it is absolutely crazy what has been happening. And the estimation in this very interesting paper, is that the United States has paid $1.8 billion extra to Pfizer and $17.4 billion extra to Moderna.
This is the excess that they have paid. The European Union has paid $31 billion more. Germany, which is protecting Pfizer, BioNTech, has paid $5.8 billion more. This is money that could be used to pay health workers, it could be used to make sure that all kinds of other health is improved. This is money that could have been spent in lots of better ways, even in advanced economies. So citizens in the advanced economies are letting their governments, with a suit in the lab, so I don’t know who was sitting in whose lab, but basically the pharma companies and the governments are in this together. And it’s them against everybody in the world. It’s them against humanity, unfortunately at the moment.
Rob Johnson:
Yes. Lori, let me change the focus. Well, I got two questions for you, the first is, how do the people who defend this decision argue? What are they saying is good or just, or legitimate about that? And second question I want to come back to is, given your work on trade, this interface between the United States and China that’s concerning everyone, related to climate and everything else. How can the west prevail in the eyes of the global south, when they’re destroying lives like this? And isn’t this creating an opportunity for China to rise in a leadership role in all aspects of international commerce?
Lori Wallach:
So on the first point, the arguments are three, and they range between disgusting and bogus. The first is just neocolonialist racism, which is those countries can’t make a vaccine as sophisticated as this. So there’s no point in waiving intellectual property barriers or doing the technology transfer. If you put money in it, you’d be throwing it away. It’s just too fancy, too technical. And it is so racially disgusting in that, just the empirical facts of the situation, as Jayati said, is the mRNA research has been government funded. The big pharma companies weren’t into it. They didn’t think it was going to be profitable. And so like Pfizer came in at the very end, bought the worldwide manufacturing and distribution rights. They had never had anything to do with mRNA vaccines or mRNA anything, it’s not a platform. The governments have funded it. And it’s been scientists from around the world.
The mRNA research looks like the damn UN. And that is the reason why, in fact, right now China on its own is developing its own mRNA vaccines, because the technology has been developed by scientists around the world. So the capacity is not only there. The capacity was developed by people from those countries in partnership with people from Europe, and from the U.S. and from developed countries. So it’s been a scientific partnership of geniuses who have got this platform in a place where they were researching for AIDS, researching for malaria, for cancer. And just this methodology of medical delivery has been developed at the point where now it can also be used for this kind of vaccine. So, as well, just empirically, if you go to tradewatch.org, our website, you can see fact sheets with all of these listed.
When the WTO had a summit about how to improve the volume of vaccine production, countries could report about 2 billion doses still on the table to be made in 2021. If there was technology transfer, which is as Jayati said, is equally important with taking off the handcuffs of the IP barriers, and then the question is, do you need a year to reverse engineer how to make the damn stuff? Pfizer figured it out, going backwards, having never made a single dose in about five months. So from five months to a year, do you have to go backwards or do you actually get not just the ingredient list, but the order of the recipe? Which is, you do this first and then you do that thing, and then you could have it done according to Moderna’s chief scientists, in three to four months in existing facilities.
Because mRNA technology is not living cell lines, you don’t need these ginormous eight story vats and weeks to brew a virus - that’s like the J&J technology. So, if you have a clean manufacturing facility, you have the IP unlocked, and you have a technology transfer, you could have more vaccines made. And, again, 2 billion doses in existing facilities where already sterile vaccines and other things are being made in the global south. And partly this is a leftover of a U.S. investment through the World Health Organization 15 years ago, when there was going to be a huge need for more flu vaccines. And so the Institute Pasteur in Senegal, the Getz Pharmaceutical in Pakistan, I mean, all around the world. In India, obviously in South Africa, two or three different companies that can do it. So that’s the first argument, it doesn’t make a difference.
Second argument is, it’s not intellectual property, it is anything else. Perhaps Elvis is actually responsible for the problem. I mean, they’re just making stuff up, to try and distract from the intellectual property. And so the most common non-Elvis explanations are, it’s trade barriers. And in fact, in India the Modi government, came up with this total change the subject, “Squirrel! Look over here,” argument that the U.S. was banning the export of inputs and vaccines. There are many things U.S. is doing wrong, but we do not have an export ban on vaccines or inputs, and so the supply chain problems, like for lipids, which we’ll need more of to make the mRNA vaccines, are actually IP problems. There are a stack of patents. So if you have the WTO waiver, as Joseph Stiglitz often says, “The market would actually cure if you got the barrier out of the way.” People would make more of these inputs.
So it’s not trade barriers. It’s not supply chains, that is somehow the crisis of the inability to make more glass vials. No, the issue is at the core, the intellectual property and technology transfer is not there. And so then there is no demand for all the other things that the market would cure for.
And then the third argument that is made is basically the same disgusting argument that was made during the HIV/AIDS fight. Which is, people in the developing world, there’s no way to distribute these vaccines. So, even if IP were the issue and even if countries could make more of them, there’s no way to keep it cold to get into people’s arms. And of course, that’s been empirically proved to be a damn lie, because with the HIV/AIDS epidemic, those arguments were made and disproved. And that was 25 years ago.
But currently, actually, right this moment, developing country producers, world-class producers, are pushing out biologic, cutting-edge medicines for HPV vaccines, which have to be refrigerated for distribution, having wide distribution for cutting edge biologics, AIDS meds, they’re being distributed. So those three arguments are just baloney. What Jayati said, is precisely right. This is about greed and profits. They don’t want more, and particularly developing country manufacturers, to have the ability to operate on this platform, because they see this as just a cash cow forever. Treating variants with boosters, but also whatever new platform, treatments, and medicines we build in the future, the big pharmaceutical companies want less volume because they want pandemic pricing to be over. And then, as Pfizer announced, charge $150 to $175 per shot, not the $20 per shot, which, as Jayati said, is already multiples of what it actually costs them to make it. That is what’s going on.
And as far as the China argument, Rob, you are spot on. Because here’s what this looks like, when I speak to my counterparts in the global south, I know people around the world from decades of working on trade. And this is what they say: they see the Northern countries have the most amazing mRNA vaccines. They are extremely effective. They are the fastest to gear up to make, and we’re not sharing and we’re not providing. And, in fact, we’re willingly not only lying to ourselves, not only lying to other countries, have mass mortality unnecessarily, but as you said, and as Jayati said, putting ourselves at risk. I mean, we are courting the zombie apocalypse of being all locked up with the actual variant getting around the vaccines altogether, because we let variant after variant, after variant, brew wherever there are these mass outbreaks.
So we already see what the Delta variant, what’s starting to happen, breakthrough infections. So China has some vaccines, they are less effective. They’re an older technology. They’re perfectly good vaccines, but just practically with the variants, the way they are made, the technology is such that, you are using basically the existing original alpha virus of COVID as the basis for how the vaccine is made. So it is not as broadly effective against the variants. But China has made production partnerships, as has Russia, with the Sputnik vaccine, which is totally open source. They’re not doing any monopoly licensing. They’ve made partnerships all over the world to transfer the technology and to actually make the vaccines. So these are somewhat less effective, Sputnik more effective than the Chinese two candidates. But the world is seeing that these are where the partners are, not with democracies, but with autocracies. And then democracy looks like it has its head stuck in the ground, unable to function.
And that is precisely when Angela Merkel was in Washington and they were having their celebratory speech about, we’re united and showing democracy is the way, we’ll beat autocracy. And everyone who’s paying attention to what the hell is happening, and the lived experience in the global south is saying, “Wait a minute, it’s not what’s going on – it’s looking exactly the opposite. It seems like the democracies can’t get their act together to be able to help people survive.” And by the way, the International Chamber of Commerce - hardly like a health agency - has projected over $9 billion, sorry, $9 trillion of losses for the global economy, just in this year, due to the lack of global south vaccination. So just in self-interest, there are huge economic, huge foreign policy implications. And the U.S. can’t step up and lead, Germany can’t get the hell out of the way, and then on the sidelines, Russia and China are basically coming out looking much better with their autocratic mechanisms. It’s not a good thing on any level, it’s disastrous.
Rob Johnson:
Wow. Wow. When you mentioned Elvis, I remember a song by Elvis Presley called, Suspicious Minds. And I can’t believe, as I listened to you, how daunting this is for faith and trust in our society. And what bothers me, this is in the United States, but all around the global north, is that if we can’t get this sorted out, the despair that leads to an authoritarian reaction has tailwinds. It’s catalyzed. And I don’t know what to say, because it seems like the stakes of the trillions you mentioned, but the stakes of the future are also enormous, all over the planet and within the leading countries.
Elvis said in another song, “I forgot to remember to forget.” I don’t think people are going to forget this episode. This is haunting. So what can we do? Diagnosis is important. My dad was a physician, but doctor, we need some remedies. From the standpoint of you and Jayati, your perspective, where are the remedies that we can turn this ship around with? First of all, do we need to, as my research director Tom Ferguson often talks about, reduce the role of money in politics so that people could actually govern and not be slaves to fundraisers? What’s in the remedy kit, doctor?
Jayati Ghosh:
Before we do the remedy, I want to just add to the very dire picture that Lori just painted, because in fact, it’s even worse. Just consider it from the point of view of the average developing country citizen. What have we seen? We’ve seen vaccines being developed at a dramatically rapid rate because of investment by these rich countries who can afford to do so. We’ve then seen them grapple with the vaccines, ordered four times what they need, 11 times what they need. And then hold on to them, stockpile these vaccines. So they’re still stockpiling vaccines that they could distribute tomorrow, including the Biden administration. And then we’ve seen them say, “Well, we know how to make this but we’re not going to let you know how to make this. And we’re going to prevent anybody else who tries to help you to make this.”
So we have also seen the western governments go to developing countries saying, “Don’t use the Russian vaccine. Don’t use the Chinese vaccine.” Actually, ambassadors of western countries are actively out there saying, “Don’t you dare use that. I mean, your people can die, et cetera. But that one is really not good, but we won’t give you ours.” So this is what they’re seeing. I think what the advanced economies, the so-called democracies, are not realizing is that, this is a lack of trust that goes beyond whether you look at democracy or authoritarian regimes. It is a lack of trust in the advanced economies which is going to damage all things in future. I think it could also generate a lot of other new initiatives. The African Union is out there now trying to encourage regional industrial policy, which I think is a great thing.
But they have realized what the Chinese realized a decade ago, that there’s no point relying on these guys for knowledge, they’re going to hold it. There’s no point relying on these guys for investment, because they will only do the investment that suits them. There’s no point even relying on these guys for trade because that trade will be on their terms, but also they will stop it when they think that they can get more profit for their companies. So all of that is actually coming home to many, many developing countries. So you’re going to see a much more, shall we say, cynical attitude to whatever overtures G7 may try and make. I mean, the rolling of eyes at G7 statements nowadays globally has to be seen to be believed. Really no developing country has much faith anymore in that. Within that there are authoritarian governments who have find it or would be authoritarian, I mean, inefficient but authoritarian.
I could name my own country, but many governments are like that, who look to China and say, “Well, look, they’re doing all this very efficiently because they have really tight central control. So we really need to also be very authoritarian domestically.” And all we’ll get is a sorrowful shake of the head from Anthony Blinken. We’re not going to really get any other problems from these useless people in the G7 who don’t help us in any way either. So we can actually oppress our own people. We can be as undemocratic as we like. And our people realize that there’s no point looking at the north, because they’re not going to help you when you need help. And they will be entirely selfish in terms of grabbing what is available for themselves. That’s the situation.
Now you asked, what can we do about it? I would say, there are some things that governments could do very easily. The U.S. could release all the stock piles. It really doesn’t need 80 million AstraZeneca shots that it’s never going to use. By the time it finally decides to distribute them, they would have expired. They are not going to be valid for very much longer. Distribute all the extra vaccines that are still being stock piled in all these countries. Just give them away immediately, don’t give a little 2 million here and a 100,000 there as a little big present and make a big speech about it. Immediately distribute those. Second, actually just bring to the table these guys, you could do it with Johnson & Johnson. Bring Moderna to the table say, “Listen, you’ve made your money. We paid for this vaccine. Now you’re going to share the technology.”
And governments are able to do this. There are many things they can do to big companies that would make life difficult for them otherwise. To persuade them to part with the technology for a cost, not for free. And they could just do that tomorrow if they really wanted to. That in itself would send a huge and massive message to everybody, but it would also, as I said, benefit the rest of the world. It would benefit the U.S. people as well, citizens in the U.S. as well.
These two demands, I think really have to come from people in the developed countries. They have to be very, very loud in a way that governments cannot ignore it. At the moment I think people in the developed countries are confused, there’s too much going on. They’re just grateful they’ve been vaccinated. Now they’re worried that the anti-vaxxers are not vaccinated. So that’s what they’re concerned about. They’re not thinking about this very basic issue, that this is going to go on and on forever, unless you vaccinate the world and you can do that very, very easily. The technology is there. The money is there. It’s only the political will.
Rob Johnson:
I’m listening to you and it stirs up a haunting memory. I did a lot of work in Bonn, Germany, before the fall of the Berlin Wall. And I remember reading, The Spy Who Came in from the Cold, John le Carre’s novel. In the early two 2000s, I think it was 20 years ago, he wrote a book called, The Constant Gardener. And it was all about this kind of haggling over intellectual property rights in pharmaceutical dissemination to prevent disease. And I didn’t realize how prescient he was until I was listening to you in this context. Lori, when you listen to Jayati, what are we going to do? And I live in the United States, we’re watching the fight with the anti-vaxxers. I’ve been seeing stories in the last week about the pro-vaxxers who are scared of the anti-vaxxers, particularly regarding children under the age of 12 and what can happen, are angry. Don’t be angry, that makes it worse and more polarized. I say it again: doctor, what’s the remedy? What are we going to do?
Lori Wallach:
So this is a political problem, not a technology problem. It’s a power problem. So there are three things that need to happen to get the scale up that’s needed to beat the pandemic. One, the intellectual property needs to be liberated, the WTO TRIPS Waiver. Two, the technology needs to be transferred. And some countries have more leverage than others. It is spot on right, that the U.S. government has enormous leverage over Moderna. Moderna has never paid for two NIH, National Institutes of Health, government-owned patents, that are at the fundament of that vaccine. So literally the U.S. government can say, “All right, here’s the price, it’s your entire profits, or alternatively share your damn technology.” So the leverage potential is there to actually share the technology. And then number three, sufficient funding is necessary to actually make the stuff. Part of it is basically re-configuring the existing clean manufacturing capacity. Part of it’s the inputs that just need to be purchased.
Public Citizen did a study, you can see again at tradewatch.org. All of this information, all linked to back to the original sources, that it would take about $25 billion to make 8 billion more doses of mRNA vaccine, even compensating for the tech transfer, et cetera. So it’s not smacking down the companies, which would be sufficient then with the existing expected production to get all the adults in the world vaccinated. So it is a doable process. There are three steps. How do we get that done? So, number one, the U.S. needs to step up and it needs to step up both with respect to the waiver of the WTO TRIPS barriers. And it needs to step up with respect to the tech transfer with Moderna.
So one thing that’s about to start, right now that everyone who’s listening can get involved with, again, go to tradewatch.org. You’ll see on the landing page, is a big petition drive and letter writing campaign aimed squarely at the Biden administration. God love them for the work they’ve done domestically, get folks vaccinated, but Jeff Zients, the dude who is supposed to be coordinating a domestic and international strategy to end the pandemic, not just to get live vaccines and refrigerators, to end the pandemic, has now had many months. This administration has had seven months - there is no plan. There is no movement and it’s just not okay. So starting like now, lots of big organizations are going to be aiming directly at basically step it up White House, it’s now you, it’s on you. You’ve got to both get the TRIPS Waiver done to liberate this monopoly of intellectual property. And you have to do the technology transfer, it’s on you. That’s number one.
Number two, ladies and gentlemen, the United States, we’re hearing this, your member of Congress is about to go on a month-long vacation. Yes, they will be at a picnic, party, office, or other event near you. This is your moment in the short window before everyone is hiding under their beds with the Delta variant, to actually get to your member of Congress. So if you look in the blue pages, you will see a local phone number for your house and Senate members. You can ask for when there are office hours, when the member is going to be in your neighborhood. I cannot express how important it is for you to show up. You don’t have to be an expert, go to tradewatch.org, get the talking points. Don’t even use the talking points, just tell them, the damn administration needs a damn plan, and you are relying on them as your elected representative to make it happen.
And by the way, I want to know, in the first week of September, how you’ve accomplished this. So getting in the face of the member, sometimes in the - we call it bird dogging them - getting actually there. As good as phone calls are, as good as letters are, the thing that is the motivating factor is an actually informed caring citizen who takes the time to find the member of Congress and have a personal chat. They are going to be home. This is your five weeks to actually have this interaction. And by the way, if you are part of an environmental group, a health group, a union, a church group, a synagogue group, a mosque, get a couple of friends and you can make an appointment. And go see the member if not in person by Zoom, totally empowering. And again, tradewatch.org, sign on the action list. We can help you set this up.
Number three, as well as getting the U.S. to do the right thing and the pressure on the administration, and the pressure on Congress to pressure the administration in the U.S. Campaigning is continuing at U.S. consulates. There were over 25 events in the last six weeks that U.S. consulates, where basically U.S. citizens - and we have the signs that you can have, so everyone can have a professional sign. We will drop ship them to you exactly. All you do is sign up at tradewatch.org, at Public Citizen’s website, that you want to do one of these actions. There are over 40 consulates. If we can have people out in front of the consulates, basically shaming Germany to free the vaccine. This work has actually started to make a difference, because we are hearing from our partners in Germany, that particularly the conservative party, which is now in power, but is going to be in the September election, one of the key partners, hates having the U.S. on the wrong side of them.
These transatlantic relationships matter. So you and three friends spending lunch hour, a couple of days a week, with the sign, basically at the embassy, at the consulate, this makes a difference. And to do this again, tradewatch.org, sign yourself up, we can send you the goodies. And then just to share that partner groups in Germany and other parts of the world are doing the same stuff, because everyone sees it precisely as we all three here are. Which is, this is a struggle literally for the future of humanity, it can’t be gotten wrong. And the only thing that’s going to beat pharma power is people power. And the people power hasn’t been exercised sufficiently for the elected officials to realize that as much as they may want to suck up to big pharma, and Rob as you said, get their campaign contributions.
The only thing that beats campaign contributions is really pissed off voters. Because you can buy as many ads as you want and if you are seen as the person who’s responsible for some catastrophe, you will lose your election. So we have to escalate the price, where people power beats pharma power by making clear, there are going to be damn repercussions. If this administration doesn’t step it up, and our partners in Germany are trying to do the same thing in the context of their federal elections about what will happen with the German projects that they keep blocking at the WTO. That’s how we make the difference.
Rob Johnson:
I always looked for beacons. So I’m curious, are there members currently of the United States Senate or U.S. Congress that you would point to as being on the right track?
Lori Wallach:
So the truth is that a full majority of the U.S. House of Representatives, led by champions for public health, like Congresswoman Jan Schakowsky from Illinois, Congresswoman Rosa DeLauro from Connecticut, Congressman Lloyd Doggett from Texas, Congressman Earl Blumenauer from Oregon, Congressman Chuy Garcia from Illinois. There’s Barbara Lee from California. There was a block of members of Congress who have, Adriano Espaillat from New York, they have put themselves forward. They organized a letter that went to Biden that was a key linchpin in getting the U.S. to change from the Trump block waiver, to support the waiver for vaccine.
They literally got half the house Democrats on a letter, conservative members, progressive members, they got all those members. And those guys are leading the way. And on the Senate side, it’s an interesting mix of super progressive, amazing members like Bernie Sanders and Senator Elizabeth Warren, but also some members from, also very progressive and wonderful, but also some numbers who people have very much locked, for instance, Sherrod Brown, the amazing Ohio Senator, who’s a working class champion and others who’ve been really leading the way.
So really it’s the White House. We all need to folks on the White House. And these members of Congress can be our allies. If you have a member of Congress who signed that letter again, you can see the letters on tradewatch.org. You can thank them, go find your member of Congress or call them if you have that ability and you thank them. And say, “I’m so happy you help, but what the hell is going on? This has not happened. We’re dying out here. And people in the global south literally are dying, and you have to step up.” And the thing about talking to a member of Congress is, convey what you think but make them get back to you. So there are congressional meetings going on around the country. Another thing if you’d like you can join into, which are grassroots mean that have been organized by a thing called the Citizens Trade Campaign. Which is the national progressive coalition of environmental consumer, family, farm and faith groups.
And they’re having meetings with members of Congress saying, “Thank you, you were a champion for this, and now nothing has happened. So can you please go get Jeff Zients and president Biden to get their burns in gear. And by the way, we’d like a new meeting with you in the second week of September so you can report back to us how you did with that.” So make sure you set up a second time to hear back from the member to make sure they work for you. So make sure that they’re doing their jobs to get the administration to do their jobs.
Rob Johnson:
Well, Jayati, as Lori is working on the United States. We can come back and talk about Europe together, but what are you seeing in Asia and what’s required even within India to help us to emerge from this crisis?
Jayati Ghosh:
I think India is facing multiple crises, which are really driven by the leadership we have at the moment. And let me say, unfortunately, I have little faith that the current leadership will be able to come out of this crisis in any reasonable way. If anything, we’re likely to get a worse situation. On the other hand, nothing is written in stone and change happens often when we are not looking for it and in directions that we cannot see. But I do think that this pandemic has created geopolitical changes, in fact, speaking of which, I’m really surprised that nobody in the Biden administration has warned the White House that, “Listen, you’re really heading for a major, major decline in viability of the U.S. globally, way beyond anything Donald Trump could have achieved. Because of this complete cynicism in terms of what the U.S. and the G7 in general are doing.” I think in a large part of the developing world, there is increasing realization that these are not countries to be relied upon.
And that, in turn, I think will have some positive impact. It will generate more desires for regional industrial policy, more desires, perhaps, I hope, for a more democratic approach to the way capital is regulated and where capital flows and finance is regulated. So I think we are likely to get less of an appetite for the kind of corporate driven globalization that we’ve had, simply because the impact of that now is beyond just all inequality and that kind of thing. It’s actually death. We are actually positing a situation where the system that is on offer is one that will create a pandemic that leads to death.
And then even when solutions are available, not to give you those solutions. So I think there is a generalized distrust in the economic system that has been propagated largely by the advanced economies for a while. I welcome that. I actually think that that was a necessary and important thing, because actually for human survival, for the fact that climate change is already upon us and we are already facing all these needs, we are going to have to change strategy. I think there is a bigger shift towards that changing strategy. Certainly in Africa, it’s very open and evident in Africa, but probably across the world we’re going to see more and more of that, including in developing Asia.
Rob Johnson:
So Lori, when we talked together a week or so ago, and planned this podcast, you talked about the WTO process being essentially unanimous consent, but there was another process or a way to override if it was 140 against one or three with two hiding behind the one. What’s the nature of that process at the WTO that would allow this unlock to proceed? And how is that challenge to be raised?
Lori Wallach:
Under the actual WTOs agreement to establishing the World Trade Organization, the fundamental document of that institution, there are particular provisions for waivers of the rules in certain circumstances, which is what Indian and South Africa are trying to do. And those actual provisions set forth the prospect of super majority voting. So there are various circumstances under which that agreement establishing the WTO allows super majority voting, including the waiver, amendments, other things. Practically that’s never been done. Every decision is always been taken by consensus, which was the previous practice of the organization that WTO replaced, which was called GATT, the General Agreement on Tariffs and Trade.
There are pros and cons of breaking the consensus rule. The consensus rule is also a defense. So there’ve been repeated times where the rich countries have tried to impose totally boneheaded anti-development, anti-environmental, anti-human being rules on the poor countries. And the poor countries have stuck together and broken consensus. Typically, it takes more than one. European Union can do it single-handedly. It takes a block of developing countries. Just the power dynamics are like that. But that has saved a lot of countries from very bad things. So there is reticence about breaking that rule, but technically yes, it could be done. I think the most powerful point with respect to the WTO is that if in the face of the worst health and human crisis in a 100 years, the WTO is actually an obstacle to trying to help people survive as compared to any part of the solution.
It begs a fundamental question of the legitimacy, the very purpose, the existence of the WTO. So that’s an organization that’s been in a certain level of crisis with respect to number one, its rules being basically an antiquated system that have been proved, as Jayati just said, to be against the interest of most people around the world. So written by four of corporations, why the hell does a free trade agreement have the classic rent seeking requirement of monopoly protection of certain industries? Because if you translate it into economies out of trade royalties, what the entire TRIPS agreement is, is an obligation for countries to impose rent seeking monopoly obligations, to protect. It is the classic textbook example of protectionism. Adam Smith, David Ricardo, rolling in graves, looking at that being part of the World Trade Organization. But it’s rigged, as Senator Elizabeth Warren often says. So that system of rules already is basically in very diminished stature around the world.
And if now in the face of this crisis, the WTO can’t get the hell out of the way, it’s not like they’re supposed to be the World Health Organization and organize everything. They just need to take their big pharma monopolies and get the hell out of the way. And if that cannot even be organized in the face of this kind of a crisis, then what is the damn point of that organization? It really has to go. And interestingly in the U.S. Congress, that kind of sentiment is rising. So I often say the argument for the WTO institutionalists, the argument for the European Union, WTO lovers, is, you want to maintain any shard of that system you’ve spent so much time creating and investing, and protecting, then you better work to get this fixed. Because if the TRIPS agreements and the lack of waiver ends up being the thing that massacres tens of millions of people around the world, you know the WTO is going to be one of the casualties of the COVID epidemic.
Rob Johnson:
I think it’s got to be, why is it not more frightening? Or are people just masking with fear how afraid they really are? Because it doesn’t feel like with this Delta variant that we’re on a healing trajectory. If I was sitting in the Biden White House, thinking about control of Congress in the midterm election, I’d be pretty upset with my team that they haven’t got this under control, in time to celebrate during the midterm election. So it’s almost as if, I don’t want to be too silly about it, but we’re almost unmindfully worshiping markets. Like they produce the results without seeing that markets are tools and institutions where the vested interests are rigging the game. And it’s very, very haunting to see us increasingly deferring to things which are destroying us financially and most importantly lives on earth. Jayati, coming down the whole stretch here, this is not a happy day.
Jayati Ghosh:
It’s not a happy day. But, as you say, it’s also surprising. I mean, it’s surprising that the political leaders, they’re in so much denial and have so little awareness of the huge implications of inaction on this. So in fact, it’s not even a worship of market. It’s a worship of big capital or rather it’s being in thrall to big capital. Because these capitalists don’t believe in markets, as everything Lori has said has pointed out. They are against more competition in creating these vaccines. They’re against, I mean, they’re wanting to hold onto monopoly rights, which have been in a sense unjustly acquired, because they were really handed over on a plate to companies that did not develop this technology. And then they’re trying to extract as much as they can. Which is fine, this is what big capital does. There’s no surprise there.
What is surprising to me, is that governments are allowing themselves and the people of the country to be taken for such a ride on this. And at a geopolitical cost as well. I mean, what surprises me is that they haven’t got the IL Gattopardo sense that things have to change if they’re going to remain the same. They are not going to survive either, exactly as Lori said. The WTO may not survive, but the Biden administration may not survive. Geopolitically, the U.S. power may not survive. What surprises me is that they don’t seem to get that either.
Rob Johnson:
Lori, you talked about Adam Smith and David Ricardo rolling over in their graves and it inspired me pull up a quote or two from Adam Smith’s Wealth of Nations. “The proposal of any new law or regulation of commerce that arises from the merchant class, therefore ought always be listened to with great precaution.” So I think Adam Smith was a little bit onto the mix in… Civil government so far as is instituted for the security of property is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all. Adam Smith was pretty savvy. People selectively interpret the evidence in the dialogue to create the picture that they want and use him as a validator. I’m sure he’s more than just rolling over in his grave. He’s probably spewing venom when he hears that kind of stuff. Lori, your final thoughts on, where we are. You guys have done a fabulous job today, diagnosing the horrible effects, the process, where we are, how to go about it. Well, what have we left out? Anything before we adjourn?
Lori Wallach:
The bottom line is the situation is not tenable. It’s not survivable. And the only people that are going to fix it are us. So everyone who is hearing this, everyone who is infuriated, who is scared, take all of that emotion and that energy and translate it into change. So again, if you go to tradewatch.org, if you’re hearing this in the U.S., you can get the materials and you can get engaged. To be able to join the petition to the White House, to tell them to get their act together, to see your members of Congress, to join existing meetings, to do protests at the German embassies, to help get them to move. This is a fixable problem, but the only way we’re going to get big pharma’s greed and deadliness out of our way, is people power. And that’s where we all come in. So if you’re inspired, act do not fume. That is the bottom line.
Rob Johnson:
Well, Jayati, you inspired me another Adam Smith quote for me, “Avarice and injustice are always shortsighted.” Adam Smith said that in the Wealth of Nations. And I think we’ve explored some of the short-sightedness across many dimensions today. And I want to thank you both, I’m very inspired by each of you and very grateful that you could join me today and share this with our young scholars and with our audience. And by the way, when you prevail with people power, we’re going to come back and do another episode and celebrate.
Lori Wallach:
Thank you very much. And actually I have a coalition call right now that I’m supposed to be on to talk about the August recess strategy. So I will not shut this down, so it records, but I just want thank you. It’s been a real honor and pleasure to be in this conversation with both of you. Thank you so much.
Jayati Ghosh:
Absolutely, absolutely.
Rob Johnson:
Thank you.
Jayati Ghosh:
And let’s hope your people power works.
Rob Johnson:
I agree.
Lori Wallach:
It’s all that ever does.
Rob Johnson:
And check out more from the Institute for New Economic Thinking @ineteconomics.org.
