Trouble in vaccine valley
Von der Leyen’s Covid nationalism could do real damage to the EU’s vaccine hub
Last week, the European Commission toughened up its vaccine export restriction mechanism amidst a lot of opposition. Ireland and the Benelux countries were unhappy, even if the likes of Germany, France and Italy were supportive. The EU divisions caused intense deliberations ahead of last week’s EU summit.
Belgium in particular, which hosts the European Commission, was worried. A big Pfizer plant, where many of the Pfizer vaccines are being produced, is located in the country. British pharmacutical firm GSK also has a big presence and the Covid vaccine Johnson & Johnson is a product of “Janssen”, a U.S. pharma giant.
Belgium is truly “vaccine valley”. Already in 2019, 13% of EU biopharmaceutical exports and 10% of research investment took place there, despite the fact that it only houses 2.5% of the European Union’s population. Biopharma accounts for about 30,000 jobs in Belgium, of which 8,000 were created in the last decade. A lot of this activity is linked to Belgian universities.
As a result of all this, it should not surprise that Belgian Prime Minister Alexander De Croo declared after the EU Summit that “guarantees have indeed been provided that mechanisms such as export controls can only be applied to companies that do not respect the rules. This was a very important element for us at the EU Council and we’re happy that this has been inserted into the [Council] conclusions”.
Retaliation is a real possibility if the EU were to inflict grave damage on vaccine administration in the UK or the US
Preceding this, he had already been approached by PM Boris Johnson in a bid to soften the EU’s position on the issue.
In its explanation, the European Commission now stresses that in case of vaccine restrictions, “Member States and the Commission should assess whether the requested exports do not pose a threat to the security of supply of vaccines and their components in the Union.”
The UK and the US do not export vaccines. In the case of the US, that is because of restrictions, but in the case of the UK, it is because a priority delivery deal with AstraZeneca, “for delivery of the first 100 million doses”. That’s not the same as government restrictions that would make the application of contracts impossible, but nevertheless this difference seems lost on the European Commission.
In any case, both countries still export vaccine components. A child could therefore predict that if the EU were to inflict grave damage on vaccine administration in the UK or the US, retaliation is a real possibility. Without these vital UK or US – sourced vaccine components, vaccine production in the EU would come to a halt in only weeks.
On top of that, there’s the evident danger that populist export restrictions inspired to divert attention from policy failure may endanger future pharma investments in the EU. As Boris Johnson spelled it out: “companies may look at [anybody considering a blockade, or interruption of supply chains], and draw conclusions about whether or not it is sensible to make future investments in countries where arbitrary blockades are imposed.”
This was a major concern for Belgium, and it looks like the country, together with its EU allies, has achieved to reign in EU vaccine protectionism for now, as, reportedly, the EU Commission and Member States primarily consider the mechanism to be a “pistol” on the table, which is not meant to be used, but merely to serves as “leverage”, as one diplomat puts it.
Ursula von der Leyen seems to be doubling down on her fateful choice
The question is how much goodwill this will destroy, even if the EU would manage to secure a few extra vaccines as a result of this. Then even that is questionable, as Britain is now simply making sure it keeps the entire vaccine supply chain in the country.
Damage has effectively already been done when Italy’s supposedly “pro-European” Prime Minister Mario Draghi blocked a shipment of AstraZeneca vaccines paid for by Australia, but ultimately meant for Covid-struck Papua New Guinea. Thankfully, this has been the only shipment blocked by the EU for now.
Attention is now focused on a batch of vaccine materials from the Dutch “Halix” production plant which the UK would like to receive for AstraZeneca vaccines. EU-UK negotiations are still going on, as some kind of test of whether the EU’s vaccine restriction mechanism will actually deliver to convince the UK to give up some vaccines. But it’s since emerged that the UK was able to secure production by this Dutch site because of its investment in the plant, something the Netherlands opted not to do. The more we know, the more embarrassing it all becomes.
Meanwhile, European Commission President Ursula von der Leyen, who rather undiplomatically admitted that the tightening up of the mechanism targets the UK, seems to be doubling down on her fateful choice. She just refused to sign up to a call by more than twenty world leaders for a new global pandemics plan, which includes a call to prevent “isolationism and nationalism” in the face of pandemics. At least, other EU leaders did sign it, including Charles Michel, the chairman of the European Council, which is the institution gathering the EU’s state and government leaders. This reportedly is despite the fact that von der Leyen was given more than one opportunity to back the initiative.
This all proves that the one thing that should have happened in the face of the European Commission’s grave mishandling of vaccine procurement was for the chief of the institution to stand down. This is not to personally blame von der Leyen for all the ensuing health and economic damage resulting from the delayed vaccine roll-out, but to send a signal throughout the European Commission bureaucracy that there are mistakes and shortcoming which one cannot get away with. Von der Leyen’s refusal to learn her lesson bodes badly for the European Commission’s performance in the future.
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