By Alex Lawson

Law360 (May 12, 2021, 6:22 PM EDT ) U.S. Trade Representative Katherine Tai defended her office's endorsement of a temporary waiver of intellectual property protections for COVID-19 vaccines Wednesday as skeptical senators expressed their discontent with the decision.

The Biden administration's support for the IP waiver dominated much of Tai's three-hour testimony before the Senate Finance Committee, with Sen. Pat Toomey, R-Pa., telling the top U.S. trade official that he was "shocked and disturbed" by the move and the threat he said it presents to innovation in the pharmaceutical sector.

Tai countered by stressing that the administration's top priority is public health and increasing vaccine distribution across the globe.

"In terms of the message to American companies, it is: 'We collectively have an obligation to help to save the world right now ... You can be a hero here,'" Tai told Toomey. "What we are trying to accomplish is the saving of lives. That is going to be the first step to any longer-term trade policies and the opening of markets."

Tai's office announced its support for a vaccine IP waiver last week, vowing to negotiate with World Trade Organization members on a proposal offered by India and South Africa to boost vaccine production. Critics have countered that the waiver will do little to promote vaccine access, urging instead a focus on addressing logistical restraints and export restrictions on raw materials.

Other Republicans on the committee also criticized the decision. Finance Committee Ranking Member Mike Crapo, R-Idaho, asserted that Tai did not have the legal authority to waive global IP rights without consulting Congress.

Tai disputed Crapo's position, noting that Congress has a role to play in deciding whether to keep the U.S. in the WTO writ large, but that the executive branch has the power to advance negotiating positions on its own.

"I believe I have the authority to negotiate at the WTO," she said.

The Biden administration's decision to negotiate with WTO members over the terms of a vaccine IP waiver has roiled drugmakers and Republicans in Congress. Crapo railed against Tai's move both on the merits and for not keeping Congress sufficiently in the loop.

"You may, of course, have your own good reasons," he told the USTR. "But to date, you have not offered an adequate explanation."

Crapo also urged Tai to pursue a broad trade enforcement agenda. The Biden administration has publicly emphasized the need for strong oversight of labor and environmental rules, but the veteran Republican said those areas should not be the sole focus.

"We can do that — and also stand up for them by challenging other market access barriers at the same time. Enforcement in these areas is complementary, not exclusive," he said.

The hearing was not entirely combative. When Finance Committee Chairman Ron Wyden, D-Ore., asked Tai about new tools she needs to improve USTR enforcement efforts, Tai offered support for updating the Cold War era statute used by the Trump administration to set duties on steel and aluminum.

Reshaping that law, Section 232 of the Trade Expansion Act of 1962, has attracted bipartisan interest in the past, but efforts to cobble together a new bill have fizzled. Tai acknowledged that the Trump administration did "the best that they could, given the tools we have on the books," but expressed a willingness for Congress to consider changes.

"Part of the tensions that have arisen over this important trade remedy is the discordance between the authority provided and the nature of the problem we are dealing with now," she said. "What I would propose is that we need 2021 tools for addressing the 2021 challenges we have, rather than relying on 1962 tools and retrofitting them."

Section 232 allows for the imposition of trade restrictions based on national security concerns. Critics accused the Trump administration of using the law as a flimsy pretense for economic protectionism, and the Biden administration has continued to impose the tariffs and defend them in court.

A bill from Sen. Rob Portman, R-Ohio, would give Congress the power to pass a resolution of disapproval to erase the Section 232 duties after the president imposes them. That power currently exists only for petroleum products, while Portman's bill would look to apply it to any investigation.

A bill from Toomey took an even more aggressive approach than Portman's, allowing Congress to head off any Section 232 tariffs before they took effect. Toomey's bill also would wipe out Trump's steel and aluminum levies, while Portman's would apply only to Section 232 investigations moving forward.

--Editing by Jill Coffey.

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