Vaccine Wars: EU Decision to Block Vaccine Exports Causes Outrage
February 23, 2021
3 min read
What's going on here?
The European Union’s decision to restrict vaccine exports from its member states has sparked outrage worldwide.
What does this mean?
On Thursday 28 January 2021, the EU announced plans to empower its member states to block exports of COVID-19 vaccines. The restrictions would force pharmaceutical companies to seek authorisation before shipping vaccines out of the bloc. You can read the full details of the export controls here. It is a hostile response to AstraZeneca’s failure to fulfil its vaccine delivery schedule to the EU – an obligation the company insists is not binding. The EU is now in a bitter row with the UK and AstraZeneca.
The row is a result of a shortage of vaccine supplies. There has been growing unrest in EU member states over the bloc’s faltering vaccine rollout. Vaccination centres in Germany, France and Spain have all cancelled or delayed rollouts due to the shortfall. AstraZeneca added fuel to the fire by announcing that it would reduce the supply of its vaccine to the EU by 75% due to production problems. This statement sparked furious EU officials to propose a mechanism for export controls. The EU also demanded that vaccines produced in the UK make up for the AstraZeneca shortfall. Both the drug company and the UK have rebuffed the request.
An embarrassing U-turn over triggering an emergency clause in the Brexit withdrawal treaty followed. The EU backtracked on its threat to create a hard border between the Republic of Ireland and Northern Ireland. In essence, international criticism of the threat was too hot to handle. However, the plan to introduce export controls lives on. The European Commission has said the temporary mechanism is to combat “the current lack of transparency” over vaccine exports from the EU.
What's the big picture effect?
The concern is that the EU might seek to block vaccine exports until it has satisfied demand within its member states. All three Western-made vaccines that are currently available have manufacturing operations in the EU. Pfizer uses factories in Europe. Moderna produces its non-US vaccine in Switzerland but fills the vials in Spain. By introducing export controls, the EU could effectively take the vaccines hostage. An outbreak of “vaccine nationalism” would have severe geopolitical consequences worldwide. The South Korean foreign minister has warned about the possibility of “global disunity” if the chain of events escalates.
One of these consequences is retaliatory action from other countries. Vaccine wars (as catchy as it sounds) would rapidly erode essential supply chains – certain vaccine components are only available in a handful of countries. Given the escalation in trade barriers on personal protective equipment (PPE) at the start of the pandemic, retaliation over vaccines is not an implausible outcome. The International Chamber of Commerce estimates that such a scenario could wipe off as much as $9 trillion from the global economy.
Therefore, the vaccine squeeze is more than just a public health nightmare. It is both a political and economic catastrophe. Britain, fresh from a long-awaited divorce (Brexit), is inoculating people at a much faster rate than any EU country. Some experts argue that the EU is playing up the tough guy act because the current narrative reflects poorly on them. It is interesting that the EU previously lectured the UK government about respecting the Irish protocol (see our article on that here). Despite this, the block was quick to contradict itself. There is a real fear within the EU that its poor vaccine rollout will harm its economic competitiveness as the world recovers from the pandemic. The export restrictions should be viewed within the context of the EU’s desire to cement its economic and political position following Brexit.
But the restrictions are a double-edged sword. They risk scrubbing trillions of dollars worth of growth from the global economy. It is questionable whether this is a loss that the world can shoulder at this point. However, as politicians have shown us again and again, it is never too late to make a U-turn. It remains to be seen whether the EU will press forward with its hard stance or buckle under international pressure.
Report written by Deniyi Coker
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