Madam Chair and members of the committee, it's a pleasure to be back at the Standing Committee on International Trade.
Given the ongoing vaccination program under way in Canada and around the world, this study comes at a critical moment. At the Canadian Chamber of Commerce, I have the privilege of working with many leaders in the life sciences industry. As you can imagine, we have been working even more closely with them over the last 12 months.
Like many Canadians, I look back 13 months and consider how rapidly the industry has moved. In preparation for this appearance, I reread some of the press coverage from spring 2020, which said it would take 12 to 18 months for a vaccine to be developed. Instead, industry has developed a vaccine in far less time. That tremendous effort should not be forgotten. I raise this not as a spurious piece of hindsight perspective but instead to underscore the importance of supporting innovation in the life sciences industry.
The committee will be hearing from others who are in the industry and better placed to speak to the science, whereas I'm going to come at this more from the trade perspective.
I want to speak first to the issue of the TRIPS waiver. Intellectual property is a critical element of supporting the innovation ecosystem that creates life-saving medicines. I mentioned a moment ago the breakneck pace at which innovation has occurred for the COVID-19 vaccines. R and D work is both capital intensive and labour intensive. Without strong intellectual property protections in place, this industry-led innovation that we've seen in the last year would have been tremendously hampered and certainly would not have been able to happen as quickly, because there would not have been adequate infrastructure in place to develop the vaccines.
There has been no evidence that IP rights are actually causing issues with the vaccine rollout globally. The challenges instead are related to the scaling up of production and the very complex supply chains that go into the COVID-19 vaccine process. Pfizer alone, for example, involves 280 components, 86 suppliers and 19 countries. There are also immensely complex storage requirements, sometimes called cold chains, as you may have seen in the media. I don't want to be glib, but this is far more complex than putting a couple of ice packs in a cooler box and shipping them off with some vaccines in vials. In this sense, the IP waiver proposal is a solution in search of a problem, since it would do nothing to address the underlying supply chain issues, such as the shortages of lipid that BioNTech needed Merck to backfill last year.
It's also important to take a longer-term perspective and recognize that if implemented, a TRIPS waiver would create lasting effects for companies and the decisions they make about their future investments in R and D and manufacturing. Certainly there's also the concern of a tit-for-tat war, as countries would go down this path.
It's also worth underscoring that there is already a process, as you heard a moment ago, under article 31 in the TRIPS, for governments to invoke compulsory licensing. Given that there's already a process available, which I would add has safeguards built into it, a broad and sweeping TRIPS waiver is actually an unnecessary mechanism.
Given all of that, we hope the government will not support a TRIPS waiver proposal that's being discussed in Geneva.
I'd like to now shift to talking for a moment about the EU's measures on the export of vaccines.
The Canadian chamber has strongly opposed measures that could restrict the export of vaccines. This is not only in Canada's self-interest, given our lack of domestic biomanufacturing capacity, but also because COVID-19 is a global pandemic that requires global distributions of the vaccines.
Our primary concern with the EU's export measures are twofold.
First, the directive leaves a significant amount of discretionary power to the European Commission and member states in its application. I know first-hand that Global Affairs Canada, including Minister Ng and Ambassador Ailish Campbell, have been working very hard behind the scenes. We have seen the benefits, given that no shipments to Canada have been blocked thus far. The same cannot be said for Australia, as the members of this committee I'm sure will have seen in recent media reporting.
Second, the EU's regulations set a very unhelpful precedent for other jurisdictions and risk making this type of behaviour much more acceptable, such that other countries may be more willing to execute these types of policies. The chamber has been working closely with our business association counterparts around the world to deliver the message to EU decision-makers that we should not be pursuing this message. We hope that the EU will focus instead on automatic approvals and shift efforts toward a transparency-based mechanism.
I'd like to spend a few moments discussing, from a trade perspective, some of the measures that could be pursued to ensure the movement of vaccine supply chains.
First, building on what I said a moment ago about export restrictions, we need to have greater specificity from countries on the export restrictions and their use as a policy tool. Much has been made over the last year about the phrase that export restrictions must be “targeted, proportionate, transparent and temporary”. Canada can play a lead role in global discussions to develop something in practical terms to operationalize this. There is the upcoming G7 trade ministerial meeting as well as the G7 leaders' summit, which are potential opportunities to move the dial forward. We also have upcoming bilateral discussions with the United Kingdom.
Second, Canada should also continue to take a leadership role in the Ottawa Group trade and health initiative and the Global Alliance for Trade Facilitation. Given the complexities of vaccine supply chains, we can support the developing countries by providing them with the know-how to get products across borders and into the arms of their citizens as quickly as possible.
Third, Canada should continue to engage in ongoing efforts at the WTO that are being led by Dr. Ngozi on the so-called “third way” for voluntary knowledge sharing. This would stay in line with the spirit of TRIPS article 31(b), which requires consultations with rights holders.
The international chamber has actually been putting some thinking into this, and they're considering the idea of some sort of vaccine clearing house that could act as a forum to help take the heat out of what has been a very fraught issue and allow for evidence-based discussions on supply chains. This is something we hope the committee and Global Affairs Canada will be able to explore further.
Thank you very much for the opportunity. I look forward to your questions.