New Zealand tackles ‘vaccine apartheid’ with ambitious APEC free-trade plan

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New Zealand is pushing Asia-Pacific trade group APEC to remove all tariffs on COVID-19 vaccines and related medical products, but is facing opposition from some members who believe the plan is too ambitious, people familiar with discussions said.

The proposal comes amid growing concerns that while inoculation campaigns are helping wealthy countries recover, few shots have reached smaller, poorer nations where the virus still rages. The World Health Organization has spoken about the risks and inequality of such “vaccine apartheid”.

New Zealand, which is hosting the Asia-Pacific Economic Cooperation forum virtually this year, will push for members including the United States, China and Russia to sign off on two documents related to COVID-19 in addition to the official joint statement issued after the trade ministers meeting on Saturday.

All 21 economies are set to agree to apply “best practices” guidelines on movement of vaccines and related medical products across borders, one person familiar with the discussions told Reuters, declining to be identified because the talks were private. This could reduce delays in moving vaccines internationally by days.

The members are also likely to say something “strongly supportive” of waiving intellectual property rights for COVID-19 vaccines, the person said.

But a proposal by the host nation to make shipments of medicines, medical and surgical equipment, hygiene products and other goods tariff-free is proving more contentious.

A trade ministry official at another participating country said members were still negotiating what to put in the joint statement.

“While some countries have shown their support for the idea of eliminating or reducing tariffs on COVID-19 vaccines, there are some countries that are leading against pursuing such an idea,” said the trade ministry official, who could not be named because the discussions were private.

“Some countries like New Zealand have high ambitions when it comes to crafting this joint statement, so they prefer strong expressions like ‘tariffs’ in the statement,” but other countries were not comfortable with that term, the official said.

The U.S. Trade Representative’s office did not respond to Reuters’ request for comment on the matter.

Although average tariffs on vaccines are low within APEC, only about 0.8%, tariffs are much higher for goods important in the vaccine supply chain.

Alcohol solutions, freezing equipment, packaging and storage materials, as well as vials and rubber stoppers face average tariff rates above 5%, according to APEC. Import tariffs can reach as much as 30% in some APEC economies.

New Zealand believes an agreement on eliminating supply chain and tariff barriers is needed for APEC to be responsive and relevant to the crisis facing the world, the first person said.

“Globally, there have been worrying trends restricting supply chains and disrupting flows of vaccines and essential goods around the world,” New Zealand’s Minister of State for Trade and Export Growth, Phil Twyford, said in a statement.

Indonesia’s director general of international trade negotiations with the trade ministry, Djatmiko Bris Witjaksono, confirmed without elaborating that agreement is being sought on two additional documents – an APEC declaration on COVID-19 vaccine supply chains and a declaration on services to support the movement of essential goods.

Final talks will be held between trade ministers on Saturday after which the joint statement will be made public.

Pacific nations including New Zealand and Australia are still far behind in vaccinating their populations but these countries have had more success in containing the spread of the virus.

The consensus-based APEC has struggled to reach agreements in recent years amid then-President Donald Trump’s trade war with China. Joe Biden, who succeeded Trump, has promised a more multilateral approach.

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