In two posts yesterday, I reviewed the WTO General Council’s consideration of concerns expressed about the EU’s export authorization/licensing program for COVID-19 vaccines and the first blockage of a shipment of vaccine doses by Italy. See March 4, 2021, Italy blocks exports of COVID-19 vaccines to Australia, first blockage of export authorization by the EU or its member states, https://currentthoughtsontrade.com/2021/03/04/italy-blocks-exports-of-covid-19-vaccines-to-australia-first-blockage-of-export-authorization-by-the-eu-or-its-member-states/; March 4, 2021, The EU’s response to challenges to its actions on COVID-19 vaccine exports, https://currentthoughtsontrade.com/2021/03/04/the-eus-response-to-challenges-to-its-actions-on-covid-19-vaccine-exports/.
There has been a lot of press coverage of the blockage with various explanations for the action taken. See, e.g., NPR, Australia Asks European Commission To Review Italy’s Block On Vaccine Shipments, March 5, 2021, https://www.npr.org/sections/coronavirus-live-updates/2021/03/05/973922179/australia-asks-european-commission-to-review-italys-block-on-vaccine-shipments; BBC News, Covid: Italy ‘blocks’ AstraZeneca vaccine shipment to Australia, 5 March 2021, https://www.bbc.com/news/world-europe-56279202; Financial Times, Italy blocks shipment of Oxford/AstraZeneca vaccines to Australia, 4 March 2021, https://www.ft.com/content/bed655ac-9285-486a-b5ad-b015284798c8; Euronews, EU first as Italy blocks export of 250,000 COVID vaccines to Australia, 5 March 2021, https://www.euronews.com/2021/03/04/eu-first-as-italy-blocks-export-of-covid-19-vaccines-to-australia; Washington Post, Italy blocks export of AstraZeneca coronavirus vaccine to Australia, amid E.U. anger over delivery shortfalls, March 4, 2021, https://www.washingtonpost.com/world/europe/eu-blocks-vaccine-australia/2021/03/04/c89b07c6-7cff-11eb-8c5e-32e47b42b51b_story.html.
It is my understanding that the vast majority of export authorization requests that the EU has approved since the new control system went into effect have involved vaccines from Pfizer/BioNTech or Moderna where the EU has been less upset with shortfalls in deliveries to EU member states. It is also my understanding that of the authorization requests received for AstraZeneca, most have been for small volumes, although 300,000 doses were shipped to Australia earlier. The EU’s upset has been focused on AstraZeneca and the production and allocation process which has resulted in only about half of promised doses likely to be delivered to EU member states by the end of March.
Today, press reports indicate that France came out in support of Italy’s action in blocking the shipment. See Republicworld.com, France Supports Italy’s Decision To Block COVID-19 Vaccines Export To Australia, March 5, 2021, https://www.republicworld.com/world-news/europe/france-supports-italys-decision-to-block-covid-19-vaccines-export-to-australia.html . While the action by Italy (supported by the EU failure to oppose the proposed blockage) is problematic as interfering with commercial activities of private parties with other governments and because it appears to be simply an exercise in punishing a company where there are differences in view on contract obligations where there are manufacturing challenges in EU facilities, many governments are not subject to export blockage from the EU (e.g., COVAX low- and middle-income countries; various neighboring countries to the EU) meaning the pool of potentially affected purchasing countries is only part of the world.
Even for Australia, the extent of the damage from the blockage is probably minor considering that the vast majority of vaccine doses Australia has ordered (50 of 53.8 million) will be supplied by a local company, CSL, producing the AstraZeneca vaccine, with shipments expected to start by the end of March at a rate of 1,000,000/week. See ABC Science, CSL may manufacture mRNA and AstraZeneca vaccines that protect against new COVID-19 variants, 17 February 2021, https://www.abc.net.au/news/science/2021-02-18/covid-19-vaccines-csl-mrna-adenovirus-astrazeneca-pfizer-tga/13160404. While the Australian government has spoken to the EU on a number of occasions to get a resolution, the Australian government is in a better position to deal with the lack of a shipment because of the vastly lower case and death rates in Australia compared to most countries in the EU.
Australia’s Prime Minister Scott Morrison in today’s press conference reviewed Australia’s game plan for rolling out vaccinations and dealt with a number of questions on the Italian blockage. The portion of the transcript of the press conference dealing with questions of Italy’s blockage of aCOVID-19 vaccine doses is copied below. The full transcript is available at the following link. See Prime Minister of Australia, TRANSCRIPT, 05 Mar 2021, https://www.pm.gov.au/media/press-conference-sydney-nsw-7.
“JOURNALIST: Prime Minister, do you blame the Italian authorities, blocking the supply of the AstraZeneca vaccine to Australia? Given obviously what’s just been laid out in terms of how bad the situation is there?
“PRIME MINISTER: Well, they’re certainly responsible for exercising the veto right they had through the EU process about those supplies coming to Australia. But the point about that is that we’d always anticipated that these sorts of problems could arise. And that’s why we’ve done a number of things, the most significant of which is to ensure that we have our own domestically produced vaccine. And we’re one of few countries that have done that. That means that has given us sovereignty over our vaccination program, which I think is incredibly important. I mean, I’m in regular contact with European leaders. As Professor Kelly said, in Italy people are dying at the rate of 300 a day. And so I can certainly understand the high level of anxiety that would exist in Italy and in many countries across Europe, as is regularly conveyed to me. And so they have some real difficulties there. They are in an unbridled crisis situation. That is not the situation in Australia. But, nevertheless, we have been able to secure our supplies, and additional supplies for importation, both with Pfizer and AstraZeneca, which means we can continue the rollout of our program. So, I want to assure Australians that we’ve been able to secure those vaccines. This particular shipment was not one we’d counted on for the rollout, and so we will continue unabated.”
“JOURNALIST: Prime Minister, have you talked to your EU counterparts about getting that shipment that’s been block released? Or have you had any luck on that front?
“PRIME MINISTER: I’ve had quite a few conversations, as has the Foreign Minister and Health Minister and others in engaging with our EU counterparts on these matters over some time.”
“JOURNALIST: Just on the overseas shipments, we’re meant to be getting more than 3 million doses from overseas. Are we still relying on those at all? Or are we completely not needing them?
“PROFESSOR BRENDAN MURPHY, SECRETARY OF THE DEPARTMENT OF HEALTH: So, we have those 300,000, which will really take us through at our current rate. We plan to use them until the CSL local production comes. We are still working, and still expect to get those other 3.8 million, and we may yet get more in coming weeks. And if we get some more in coming weeks, we will obviously ramp up the pre-local production release phase of the AstraZeneca. So, we can scale our vaccination program according to what we have at the moment. At the moment, we’ve deployed 200,000 doses right throughout the country to states and territories, and they’re about to stand up clinic next week. If we get more, they can do more. So, it’s all scalable and we’ve got the time to do it.”
“JOURNALIST: Prime Minister, notwithstanding our onshore vaccine capacity, are you worried about vaccine nationalism going forward? And is the incident in Italy overnight an example of vaccine nationalism?
“PRIME MINISTER: Yeah, look, vaccination nationalism or protectionism is a matter that has been regularly raised in international forums that I have been involved with. It’s a matter I discussed with Ursula Von der Leyen when I discussed this particular matter. It’s fair to say the European Union has seen a large amount of vaccines leave the European Union, so it would be unfair to suggest that they’ve engaged in a universal practice of that nature. But, obviously, you know, it’s important that contracts are honoured. It’s important that the vaccines not only reach across Europe and North America, but particularly in the developed world as well. I have been so impressed by the way that the Pacific Islands nations have performed during this pandemic, keeping their citizens safe. Up in Papua New Guinea now, it’s a more distressing situation. It has deteriorated somewhat. But, frankly the fact they have been able to maintain the position they have for so long is a great credit to Prime Minister Marape and the work that they’ve done there. So, yes, it is a real issue. It is a matter that I think particularly advanced countries have to be quite vigilant about, and it’s certainly a matter that I’ve raised very consistently, particularly for access for vaccines to those in the Pacific Islands family, and South-East Asia.”
The desire to vaccinate all citizens in a country as quickly as possible is understandable and almost always a politically sensitive issue in country. Vaccine rollout for a global pandemic is challenging and complicated by the need for authorizations on individual vaccines from individual countries or groups, ramp up challenges for supply chains, licensing or establishing of cooperative arrangements, development of distribution systems for products needing special handling (e.g., Pfizer/BioNTech and Moderna extra cold handling and storage requirements) and much more. What prior posts and today’s post demonstrate is that dramatic ramp ups are occurring at many facilities around the world with large increases in production and distribution expected in the 2nd quarter and the third quarter of this year and beyond that. In Australia, 92.9% of their total supplies will come from domestic production although production is expected to start only in late March of this year.
Thus, the export authorization program in the EU will hopefully expire or not be used in the coming months as more vaccines are approved in Europe and as existing approved vaccines increase production, thus making the EU current concerns far less relevant. Governments should encourage any companies with available vaccine capacity to work with vaccine producers to determine ways to cooperate in ramping up production in the coming months. Many arrangements have been announced in the last several months. Governments can facilitate ramp up as the U.S. has done in working with producers and potential partners to expedite/prioritize access to equipment and supplies (Johnson & Johnson and Merck).