EU Set to Tighten Vaccine Export Rules Amid U.K. Tensions

European Union vaccine shipments to the rest of the world could face severe disruptions under tougher rules set to be unveiled on Wednesday.

The EU’s current export regime guarantees that supplies to some 90 countries won’t be interrupted, and also offers protection to companies like Pfizer Inc. and Moderna Inc. that have met their commitments in Europe. Under stricter restrictions being drafted in Brussels, both of those exemptions could be removed, a senior EU official said.

EU Set to Tighten Vaccine Export Rules Amid U.K. Tensions

That could hit countries from the Gulf to Canada, as the EU is one of the world’s biggest coronavirus vaccine producers. The move marks a fresh escalation in the EU’s battle to secure supplies. The bloc’s executive arm could potentially block all exports to countries that do not reciprocate, with the U.K a prime target.

The new rules won’t affect shipments for Covax, a global program to help lower-income nations get vaccines.

So far, European efforts have been focused on AstraZeneca Plc, which has failed to deliver more than half of the doses that it promised for the first quarter. The bloc has started negotiations with the U.K. over how to share Astra’s output from a new plant that’s due to come on stream in the Netherlands in the next few weeks, with the EU insisting that it should get the lion’s share, according to two EU officials.

The EU is already threatening to block shipments of vaccines to the U.K. unless it can reach an agreement.

‘Same Pandemic’

U.K. Prime Minister Boris Johnson told a news conference in London that all countries are “fighting the same pandemic” and his government will “continue to work with our European partners to deliver the vaccine rollout.”

“We in this country don’t believe in blockades of any kind, of vaccines or vaccine material,” he said Tuesday. “It’s not something this country would dream of engaging in. I’m encouraged by some of the things I’ve heard from the continent in the same sense.”

Later that evening, however, he risked inflaming tensions with the bloc through his use of language in a private address to a group of Conservative MPs in a meeting via Zoom. According to two people present, he said: “The reason we have the vaccine success is because of capitalism, because of greed my friends.”

He later asked MPs to “forget” he made the comments, which were first reported in The Sun newspaper. Two people on the call told Bloomberg he was not referring to the EU vaccines row but was making a quip about the big pharmaceutical companies that produced the shots. Johnson’s office declined to comment.

EU Set to Tighten Vaccine Export Rules Amid U.K. Tensions

Canada’s government described the EU’s proposals as “concerning.” It will “continue to work with the EU” to keep health and medical supply chains open, Youmy Han, spokesperson for Trade Minister Mary Ng, said in an email.

Australian Health Minister Greg Hunt on Wednesday said his nation had only received 700,000 of the 3.8 million doses it has contracted to receive from AstraZeneca’s European operations. While it was still seeking the remaining 3.1 million vaccines, “we’re not banking on any of that ” due to the company’s “massive global supply change challenge.”

Earlier this month, Australia asked the European Commission to review Italy’s move to block vaccine shipments to Australia. Hunt, who is seeking to send 1 million of the 3.1 million doses to neighboring pandemic-hit Papua New Guinea, on Wednesday said he is yet to receive a response “but we think that’s very important.”

In the EU, there’s mounting concern about another wave of spiraling infections and deaths from the pandemic that will force governments to impose yet more economic pain on their battered economies.

German Chancellor Angela Merkel ordered a complete lockdown for five days over Easter following negotiations with state leaders that ran deep into the night. France and Italy have also tightened restrictions on activity in a bid to get the virus under control.

Dutch Prime Minister Mark Rutte on Tuesday announced an extension of his nation’s lockdown until April 20.

The new export controls are aimed at making it easier to stop shipments leaving the EU if manufacturers haven’t fulfilled their European commitments.

But the European Commission, the EU’s executive arm, will also be taking into consideration vaccination rates in each country which requests vaccines.

This “qualitative” consideration will apply for requests not just from manufacturers that fall short of obligations, such as AstraZeneca, and are intended to prevent future glitches. This means that export requests from companies such as Pfizer and Moderna may be on the hook for rejections, an official said, declining to be identified.

Principle of ‘Fairness’

The EU’s original vaccine export authorization mechanism, introduced in January, exempted about 90 countries, many of which were poorer nations.

Commission Vice President Maros Sefcovic told reporters in Brussels Tuesday that the emphasis is on “fairness” when it comes to distributing the critical shots.

“We would proceed with a comprehensive assessment of the overall situation, of the supply materials, of investment, but also how in reality these exports have been completed if you look at the figures over the last couple of months,” he said.

The talks have shown some progress, with the two sides already discussing what the scope of a compromise would look like, according to one official who asked not to be identified because the process is private.

Some of the issues raised have been what the reciprocal relationship should look like; whether a vaccine-sharing arrangement should include final doses or ingredients; and if it should take into account initial investments in the development process.

©2021 Bloomberg L.P.

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