With a police raid and the threat of export curbs on Covid-19 vaccines, the EU plays tough

BRUSSELS (NYTIMES) – Tipped off by European authorities, a team of Italian police inspectors descended on a vaccine-manufacturing facility outside Rome over the weekend. They discovered 29 million doses of AstraZeneca Covid-19 vaccines, feeding suspicions that the company was trying to spirit them overseas instead of distributing them in the European Union.

Four days later, Italian officials accepted AstraZeneca’s explanation that the doses were going through quality control before being shipped to the developing world, and to European countries.

The cinematic raid – intended to put a little muscle behind European Union threats to make the company stop exporting doses – now stands as a vivid example of just how desperate the hunt for vaccines is getting. It was also a sign of continuing tension between the bloc and those it suspects might be cheating.

On Wednesday the bloc flexed its powers even more, unveiling emergency rules that grant it broad authority to halt exports of Covid-19 vaccines made in the EU, escalating an uncharacteristically protectionist stance and risking a fresh crisis in its fragile relations with Britain, a former member.

Britain, by far the biggest beneficiary of the bloc’s exports, has the most to lose, but the rules – if applied – could also be used to curb exports to Israel and other countries. The legislation is unlikely to affect the United States, and shipments to poor countries through a global consortium will continue.

The moves highlighted the EU’s predicament: Having launched an ambitious joint vaccine-procurement programme last year on behalf of its 27 members, the bloc realised in early 2021 that it had not taken the necessary steps to safeguard supply. It has been falling behind ever since.

For Europeans, facing a punishing third wave of infections, it has been especially difficult to begin locking down yet again, even as some other nations begin to envision a return to some normalcy.

Preparing the ground for the tightening of the export rules, European Commission President Ursula von der Leyen last week painted a dramatic picture.

“We are in the crisis of the century,” she said. “And I’m not ruling out anything for now, because we have to make sure that Europeans are vaccinated as soon as possible.”

About 10 per cent of EU citizens have received at least one shot of a vaccine, compared with 40 per cent of Britons and a quarter of Americans.

The bloc of 450 million people has kept about 70 million vaccines at home and distributed them to its members, while exporting more than 40 million to other countries that have contractual agreements with pharmaceutical companies. But problems with supply have persisted mostly in its relations with AstraZeneca, which drastically cut deliveries, citing production problems earlier this year, while continuing to supply other clients, notably Britain, without serious hiccups.

AstraZeneca, a British-Swedish company, has denied breaching its EU contract and said its supply to Britain has been more stable because deliveries there started earlier and problems were ironed out sooner.

Vaccine shortages are only part of the reason for the bloc’s incomprehensively slow roll-out, with serious logistical mishaps sharing the blame. The campaigns have also been set back by growing vaccine scepticism, especially against the AstraZeneca shot. EU data shows that of the 16.6 million AstraZeneca doses distributed, only 55 per cent have been administered.

AstraZeneca is the main target of the new export rules. But the legislation, expected to come into effect Thursday, could block the export of millions of doses from EU ports and affect the Pfizer and Moderna vaccines as well.

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Britain received about 10 million doses produced in the EU over the past few weeks. Canada was the second-largest recipient. Israel also gets doses from the bloc but is very advanced in its vaccination campaign and therefore is seen as less needy.

The new rules encourage blocking shipments to countries that do not export vaccines to the European Union or to countries that have “a higher vaccination rate” than the European Union “or where the current epidemiological situation is less serious” than in the bloc.

The European Commission tried to explain why the export measures were necessary.

“Nineteen countries are now reporting increasing case numbers, 15 member states are reporting increased hospital ICU admissions, while eight member states are now reporting increased numbers of deaths,” said Stella Kyriakides, the bloc’s health commissioner.

“This is where we stand today; we’re dealing with a pandemic,” she added. “And this is not seeking to punish any countries. We are the strongest supporters of global solidarity.” With the threat of export restrictions hanging in the air, the British government and the European Commission, the bloc’s executive arm, struck a conciliatory tone.

“Given our interdependencies, we are working on specific steps we can take – in the short, medium and long term – to create a win-win situation and expand vaccine supply for all our citizens” a joint statement issued Wednesday said.

The EU has come under criticism at home for permitting exports in the first place, when the United States and Britain practically locked up domestic production for domestic use through contracts with pharmaceutical companies. Until now, the EU blocked only a single small shipment to Australia on the grounds that the country was virtually Covid-free.

EU officials said the new rules would allow a degree of discretion, meaning they won’t result in a blanket ban on exports, and the officials still expect many exports to continue.

But the measures caused concern in many EU countries, including the Netherlands and Belgium – both home to major vaccine-exporting factories – and added to worries about disruptions to global supply chains, as well as damage to their reputations. Others, such as France and Italy, were happy to see the EU take tougher action. EU leaders were set to meet via teleconference to discuss the situation Thursday.

“With this mechanism, we have a certain leverage, so we can engage in discussion with other major vaccine producers,” Valdis Dombrovskis, the bloc’s trade czar, said at a news briefing Wednesday.

“Despite the fact that the EU is one of the global hot spots of the pandemic, the EU is at the same time also the second-largest exporter of vaccines,” Dombrovskis said.

From the EU perspective, things are so dire that experts argue the export curbs shouldn’t draw shock or consternation.

“In a situation where 70 million doses have been delivered to the EU and 40 million have been exported, I do think you don’t have to be too shy about it,” said Guntram Wolff, director of the Brussels-based Bruegel think tank.

“I would have preferred the Commission had fixed this issue earlier with better contracts, but from an ethical point of view, how can you justify shipping a vaccine to the UK for a 30-year old to be vaccinated, when a 70-year-old in Belgium is still waiting?” Wolff said that trading partners such as Britain should cut the EU some slack because of the circumstances, but noted the more aggressive approach was risky.

“At the end of the day, how many more vaccines can you get and what is the risk? An escalation, a trade war, and if supply chains get disrupted, a net-negative outcome for everyone because the overall supply of vaccine goes down,” he said.

These were good reasons, he added, to keep the export control option for leverage but avoid using it as much as possible.

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