The EU, UK and US: Who is really guilty of vaccine nationalism?

The accusation of “vaccine nationalism” is being thrown around as supplies of coronavirus inoculations around the world run into production bottlenecks. The charge has been levelled in the UK at the European Union in relation to its new rules, unveiled on Wednesday, to curb exports of the jabs from the bloc under certain circumstances. But within the EU the same claim is being made about the behaviour of the UK and the United States.

EU politicians and officials complain that the bloc has exported 43 million vaccine doses to 33 countries yet is suffering shortages at home and has received no deliveries from big production centres like Britain or America.

So what to make of this finger-pointing and recrimination? Why has there been such a potentially dangerous breakdown on this subject? And which countries really are behaving in a nationalistic way when it comes to vaccines? Are some being unfairly maligned?

Before tackling the question, it’s worth recognising that the subject has become enmeshed with the well-publicised deficiencies of the EU programme to roll out the vaccines that they do have and also the imbroglio over safety concerns regarding the AstraZeneca vaccine which led to a suspension of its use by many EU countries earlier this month.

The atmosphere has been further soured by the acrimonious fallout from Brexit. Briefings and much commentary on the subject has become increasingly politicised and partisan.

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So it’s necessary to at least try to strip that politicised baggage away. At the heart of the furore lies deliveries of the Oxford University/AstraZeneca vaccine, which is manufactured both in the UK and the EU.

AstraZeneca, the Anglo-Swedish pharmaceutical firm, has large supply contracts with both the UK (100 million doses) and the EU (400 million doses) but told the European Commission in January that it will fall well short of its commitments to them for the first half of this year. Yet it also said it would continue to fulfil its planned UK deliveries, even from factories based in mainland Europe.

This has resulted in a heated debate about AstraZeneca’s contractual obligations – and much speculation about the meaning of “best reasonable efforts” delivery clauses in Belgian law, under which the EU contract with AstraZeneca was signed, and in UK law, which governs the UK’s AstraZeneca contract.

Lawyers in the UK have tended to argue that the company is in the right in prioritising UK deliveries while their counterparts in the EU have tended to argue the opposite.

“I’ve never seen so few caveats from lawyers,” notes Holger Hestermeyer, professor of international and EU law at King's College London, who thinks it’s actually very difficult to be confident one way or another.

The clarity of the situation has not been helped by lack of transparency over a previous licensing agreement signed between AstraZeneca and the UK in May. The company’s boss, Pascal Soriot, has suggested this agreement explains why it is prioritising the UK. It is reported to have a “UK-first” clause, a condition of Oxford University’s funding agreement with the British government – and the UK health secretary Matt Hanock this week described it as an “exclusivity deal” – but the details have not been made public.

And even the main contracts (EU and UK) that have been published are partially redacted and stripped of pricing information, fuelling the suspicion among some in the EU that certain orders are being fulfilled earlier because of higher profit margins for the company.

This kind of contract secrecy is generally justified on the basis of commercial confidentiality and competition but in the current context, it’s fuelling mistrust.

“More openness would be warranted in this crisis situation,” argues Mr Hestermeyer. But abstracting from the specific debate about contracts, there’s also a difference in outlook about what constitutes reasonable behaviour by governments.

The US and the UK do appear to have made it a condition of their public subsidies for vaccine researchers and of their contracts with manufacturers that their own citizens must be prioritised.

“I wasn’t going to settle for a contract that allowed the Oxford vaccine to be delivered to others around the world before us,” Mr Hancock boasted in an interview in February.

The EU, on the other hand, seems to have assumed a level playing field for all customers in their funding injections and contracts – and now feels penalised for this. The threats from Brussels to withhold exports are an attempt, as they see it, to level that playing field and persuade other countries to ease their export restrictions.

“From their perspective, any notion that they’re being nationalistic when it comes to vaccine supply is ridiculous when looking at the [export] data,” says Mujtaba Rahman of the Eurasia Group.

“[Export control instruments] give the EU more leverage and that is partly what will enable the EU and UK to come to agreement on doses and that will help to boost supply. And it’s a symbol to EU citizens that the EU takes the problems with the vaccine roll-out seriously and is looking to address them. At least in the short term, they’re unlikely to actually implement the instrument – they’re equipping themselves with tools.”

Experts also point out that the EU has been far better than the US and the UK in providing actual vaccine doses (as opposed to funding pledges) to developing countries through the Covax scheme, the global initiative aimed at equitable access to Covid-19 vaccines.

The UK government, for its part, denies any nationalism in its vaccine approach and insists it is simply reaping the benefits of acting swiftly (more swiftly than the EU) to place advance purchase orders with manufacturers and for having more foresight in the drafting of contracts.

Not all EU member states, it’s worth noting, seem to be in favour of either the threat or reality of vaccine export restrictions.

“These are not EU vaccines,” argued the Irish taoiseach Micheal Martin this week. “These are vaccines paid for by other countries that are manufactured in Europe.”

The national orientation of Washington’s stance on vaccines has been more clear-cut, arguably brazen. Donald Trump signed an executive order in December which gave Americans first priority over any vaccines made on US territory. Despite breaking from the Trump regime in many other respects, the Biden administration has not rescinded that order.

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And the Biden administration has itself invoked the Defence Production Act this month to direct inputs to vaccine making.

This has created spillover problems. Blanket US restrictions on exports medical equipment such as bag and filters has been cited by India’s Serum Institute – which is making the AstraZeneca vaccine under licence – as a reason for its recent production problems. And those production problems, not EU actions, seem to be the primary reason that UK vaccine supplies are set to slow sharply next month.

“Each of these entities, whether the US, EU or UK are just doing it [vaccine nationalism] in different forms,” says Chad Bown, a trade expert at the Peterson Institute for International Economics.

“There’s guilt on all sides – in different ways and forms,” agrees Mr Hestermeyer, pointing out that the impact of a restrictive clause in a contract can have the same practical effect as preventing exports from a territory.

Yet experts also argue there’s a nuance missing from the debate. Mr Bown points out that the ruthlessly US-orientated policies of “Operation Warp Speed” under the Trump Administration did succeed in scaling up domestic vaccine production very rapidly and easing bottlenecks.

And Mr Hestermeyer argues that, given the US vaccine export ban, it was probably sensible for the UK government to do a production deal with AstraZeneca rather than the US-based Merck, as was originally considered, for the manufacturing of the Oxford vaccine candidate. Otherwise it might have found itself, like the EU, unable to access many of the medicines as they were stockpiled in the US.

“We should see the complexity before we immediately blame the other side,” he says.

Yet the pressing challenge is less to reconcile divergent views about behaviour earlier in the crisis than to recognise that all countries now have a very strong vested interest in coordinating the global vaccination effort.

Patchy or slow vaccination across the planet will inevitably constrain international travel due to risks of importing new variants against which vaccines are ineffective.

And blocks on exports would open the door to retaliation measures. If the EU were to withhold exports of the Pfizer vaccine from the UK, Britain could, in theory, ban the export to the EU of lipid nanoparticles, a chemical ingredient required for the EU-based manufacture of that medicine. Production could then breakdown entirely and both sides would suffer.

Developing countries might also go down the protectionist route if richer nations fail to co-operate. There have been signs of this already with the boss of the Serum Institute in India saying last month that it had been “directed” to prioritise domestic needs.

A tit-for-tat conflict over vaccines – or a general protectionist scramble – could easily cause broader global economic disruption, hurting living standards and employment and disrupting all manner of global supply chains. That could hold back the recovery after the epic shock of the pandemic.

Mr Bown of the Peterson Institute says governments should set aside squabbles about past vaccine nationalism and seek to forge a new treaty on vaccines to scale up their production worldwide and to provide the medicines to developing countries, with specific targets for inoculating vulnerable health workers in those nations.

“We need to reflect on where we are relative to 90 per cent of the rest of the world which doesn’t have any doses at all,” he says.

The solution to vaccine nationalism, whoever is engaging in it, is vaccine internationalism.