Thank you very much, Madam Chair.
You have my apologies. I did all the right things and of course my system crashed, so here we are.
I welcome this opportunity to address this committee. I am joined today by two Global Affairs Canada officials. They are Steve Verheul, assistant deputy minister for trade policy and negotiations and chief trade negotiator, and Loris Mirella, director of intellectual property in the trade policy division.
I will first address the discussions at the WTO with respect to global vaccine production and distribution, followed by how Canada's trade agreements may be used to ensure that Canada's vaccine advance purchase contracts are respected.
Madam Chair, the pandemic continues to affect the world, from the third wave in Canada to the surges we are seeing now in large countries like India and Brazil. As the promise of vaccination offers a light at the end of the tunnel, Canada and the entire international community are looking at ways to better develop, produce and distribute vaccines. Canada shares our international partners' call for greater international coordination towards ending the pandemic. No one is safe until everyone is safe, which is why Canada strongly supports global solutions towards equitable vaccine distribution.
Over the course of the pandemic, Canada has invested in and contributed to global programs—namely, the access to COVID-19 tools accelerator and the COVAX facility—in addition to leading discussions here at the WTO on trade and health, specifically the barriers to vaccine trade. Vaccine production is highly complex. It relies heavily on access to raw inputs as well as the co-operative transfer of know-how, skills and human expertise from researchers to manufacturers. The distribution of vaccines is also complex due to differing export regimes, regulatory hurdles, highly sophisticated supply chains and significant logistical and technological requirements to ensure that vaccines can get to where they need to be.
Canada has engaged actively in WTO discussions on these issues. We are open to considering all proposals on how best to increase production and equitable distribution of safe and effective COVID-19 vaccines. Our goal and our hope is that interventions are targeted at addressing real bottlenecks and production issues. In these discussions, some are pointing at intellectual property, while others, such as vaccine manufacturers, including those in developing countries, are pointing to an array of trade and supply chain related challenges, as I mentioned before.
As committee members will be aware, in October last year a group of WTO members, led by India and South Africa, tabled a proposal for a COVID-19-related waiver from certain sections of the TRIPS agreement. This proposal has since been cosponsored by a number of developing and least-developed members, including the African group.
I want to be clear that Canada has never opposed this proposal. In fact, we are continuing to engage with the proponents to identify concrete issues related to or arising from the TRIPS agreement or that WTO members could not address through the agreement's existing public health flexibilities.
For example, late last year we submitted, as did Australia, Chile and Mexico, a set of questions aimed at enabling all members to better understand the nature of any barriers experienced in any member's responses to COVID-19 relating to or arising from the TRIPS agreement. However, thus far the conversation has focused on a number of historical, general or hypothetical concerns regarding IP. There has been much mention of unused or underused production capacity, but there has not yet been evidence presented of large amounts of COVID-19 vaccine manufacturing capacity that would be unused due to IP issues. Our understanding is that vaccine manufacturers, including those in developing countries, so far do not substantiate this perspective.
I am sure that many find it challenging to reconcile the perspective of proponents that IP is a key challenge and that partnerships are optional, while the vaccine manufacturers that have spoken up have indicated that IP is not a key challenge and that partnerships are essential. Canada continues to encourage the proponents to share information on where any unused or underutilized capacity is located so that we can assess why this is the case. We will continue to engage with WTO members, industry and civil society stakeholders to better understand the global situation and the challenges to equitable vaccine distribution.
Meanwhile, Canada is playing a leadership role in promoting rules-based trade and open supply chains to address COVID-19-related challenges including, at the WTO, through the trade and health initiative advanced by Canada and the Ottawa Group. This initiative encourages WTO members to implement trade-facilitating measures in the areas of customs, technical regulations and services; exercise restraint in the imposition of export restrictions; temporarily remove or reduce tariffs on essential medical goods, including vaccines and their inputs; and improve transparency of trade measures.
Canada also supports the third way approach advanced by the WTO director-general, which is enhancing the WTO's role in global dialogue with the pharmaceutical sector towards accelerating the production and equitable distribution of effective, safe and affordable COVID-19 vaccines and related medical products.
I will now move on to how Canada's trade agreements may be used to ensure Canada's vaccine advance purchase contracts are respected.
To recall, on January 29, 2021, the EU brought into force what they refer to as a transparency and authorization mechanism for exports of COVID-19 vaccines. The mechanism was originally set to expire on March 13, but on the same day, the EU extended it until June 30.
On April 9, the EU member states added two criteria to the mechanism. First was reciprocity aimed at vaccine-producing countries. Second was proportionality based on vaccination rates and the scale of the COVID-19 pandemic in the export country. These two additional criteria will remain in effect until May 6; however, they may also be extended.
Since Canada was first notified of the measure on January 29, the Government of Canada has vigorously pursued the EU and its member states at every opportunity to advocate for Canadian interests. While Canada remains concerned with the measure, we continue to receive assurances from the European Commission and EU member states that Canada is not the intended target.
In addition, the EU's recent acquisition of 250 million doses from Pfizer for the second quarter of 2021, may decrease the likelihood that the measure will be extended or applied to exports of vaccines destined for Canada. Canadian officials remain in close contact with counterparts in Brussels and Spain to ensure the smooth delivery of vaccines destined for Canada.
Both CETA and WTO rules permit export restrictions, as long as a restriction is temporary, necessary to prevent or relieve critical shortages, and the good—vaccines, in this case—is deemed essential to the implementing party. However, both CETA and WTO provide mechanisms to support transparency and dialogue on such measures. From the outset, Canada sought to be placed on the list of countries exempted by the EU from the mechanism. The EU did not agree to do so. In fact, on March 24, it removed 17 countries from the exemption list.
The EU is a trusted trading partner for Canada and CETA provides Canada with a direct and well-established channel to continue advocating for Canadian interests with the EU. Canada continues to impress upon the EU that this mechanism must not affect vaccine shipments to Canada, that it runs counter to Canada and the EU's call for global co-operation and that the EU must fully comply with the transparency undertakings that Canada and the EU are advocating for at the WTO.
Thanks in part to this privileged relationship and advocacy efforts, Canada has not been negatively affected by the mechanism, and the EU has streamlined its export process for vaccine shipments to Canada. Nevertheless, Canada has called on the EU to end this measure as soon as possible.
Meanwhile, we are actively monitoring and protecting the supply channels for Canada's vaccines from around the world and will continue to do so with Canadian interests in mind.
Madam Chair, this concludes my brief introduction. I would be happy to take any questions from committee members.