The dominant (supposedly) Brexit-related story this week was the row with the EU over vaccine exports between the UK and the EU. EU Commission president Ursula von der Leyen announced last Saturday that the EU was considering more stringent rules for exports of Covid19 vaccines to allow it to ban exports of AstraZeneca doses.
Predictably, Monday’s British papers extensively reported on the story and headlines about a 'vaccine war’ between the EU and the UK were prominent. Equally predictably, the Johnson government ministers seemed to relish the opportunity for a spat with the EU. One of them is on record telling the EU to act like ‘grown-ups’. Health Secretary Matt Hancock – referring to the UK’s exclusivity contract with AstraZeneca – triumphantly declared “Our contract trumps theirs. It’s called contract law — it’s very straightforward.” He added: “I believe that free trading nations follow the law of contracts,” which can only be seen as sarcasm given the Johnson government’s track record of disregarding its legal commitments.
Yet, as Chris Grey and others have pointed out, the row over vaccines has very little to do with Brexit. In fact, the only reason why it is related to Brexit, is because the government wants it to be. Indeed, it is another way to keep the nationalist fire burning that brought the Johnson government to power.
Given the strong reactions to von der Leyen’s announcement in the UK, I thought a look across the Channel might be instructive. Browsing some national newspapers web pages on Monday morning, quickly revealed one thing: the vaccine row did not really make frontpage news in France or Germany.
It took me a few minutes of digging to find any reporting on the issue on the web page of the centre left Le Monde for instance. Interestingly, the article that I did eventually find provides a very different take on the story than what I found in most British news outlets. Rather than a story about the EU versus the British government (or even the British people), the focus in Le Monde was very much on the Commission’s attack on AstraZeneca as a company. Thus, the article [FR] stated that “The pharmaceutical group is in the hot seat in Europe because of delays in the delivery of doses.” The article mentions the company’s failure to live up to its contractual obligation to delivery 90m doses during the first quarter and 180m does in the second quarter (a shortfall 60m and 110m respectively according to the paper). Britain is mentioned only once and only when citing AstraZeneca’s defence that referred to export restrictions imposed by non-EU countries that prevented the company from sending vaccines to the EU, which - Le Monde points out – can only refer to the UK and the USA, as the only non-EU production locations mentioned in the EU’s contract. The article also cites a high-ranking EU official saying that the EU was suspecting that the problem has arisen because the company has sold the same doses several times. This seems to be the real scandal according to Le Monde. Overall, then, the article very much focuses on the company – which incidentally is referred to as a Swedish-British Group (Swedish first, British second) and the AstraZeneca vaccine is not called the ‘Oxford jab’ – rather than on the UK.
It was even harder to find any reporting on the issue on the web page of Libération on Monday. However, the centre-left/left daily’s previous reporting [FR] on the EU Commission’s attitude towards vaccine exports is interesting however. When the Commission first floated the idea of export approval legislation, the left-leaning newspaper did choose very strong language … to condemn the Commission president’s actions: ”Vaccins : quelle mouche a piqué Ursula von der Leyen ?” [Vaccines: what’s gotten into Ursula von der Leyen?] and to go on “this weekend’s fuss over the export control of Covid-19 vaccines is a striking illustration of the incompetence, disorganization, and paranoia that are becoming the hallmarks of the von der Leyen administration.”
On Thursday 25th March, 2021, the 27 EU member states had moved to back von der Leyen’s policy, enabling the commission to ban exports if deemed necessary. The tone in the French newspapers had not changed much.
Le Monde commented on the member states’ decision to back von der Leyen’s policy, stating that the EU had decided on “a vaccine war with the UK.” But the tone of the reporting is not bellicose and does not suggest that the vaccine war is something desirable from the French perspective. Again, the focus is on AstraZeneca’s rather than Britain’s role in the row. Brussel correspondent Virginie Malingre in a web chat with readers [FR] did mention the British reluctance to let AstraZeneca export doses produced in the UK to the continent, but the focus is on blaming AstraZeneca for signing “contracts with Europe and the UK that are not compatible [FR].” The correspondent also regretted the EU’s naivety when signing the contract without an exclusivity clause that Britain’s contract contains (guaranteeing that the first 100m doses would be delivered to Britain). But the focus of the reporting is once again on comparing AstraZeneca’s behaviour compared to other vaccine producers, rather than dwelling on the UK’s role.
A similar picture emerges from reporting in the right-wing Figaro, which extensively cites von der Leyen’s accusations against the UK for not exporting any doses to the EU [FR] as well as the French foreign minister’s statements [FR] to the same effect. But the focus is once again on the role that AstraZeneca plays in the row and puts the issue in a broader context noting that [FR] “over the last two months, the EU has exported 43 million doses to 33 countries, including the United Kingdom (10.9 million doses), Canada (6.6 million), Japan (5.4 million) and Mexico (4.4 million). It has not received a single dose in return.” The right-wing newspaper also notes the opposing voices within the EU, namely Belgium and the Netherlands [FR] who worry about their reputation within global pharmaceutical value chains. The paper does refer to the tense relationship between the EU and Britain as a factor affecting the way the issue is dealt with; quoting a diplomat [FR] as saying “If the UK and the EU were on good terms, we would be working together to see how AstraZeneca can serve both. But we're in this argument although we have the same interests and needs.”
Overall, no comparable bellicose, ‘us-versus-them’ rhetoric in some major French newspapers then.
What about on the other side of the Rhine? The German press seemed even less interested in the issue than the French one.
The Frankfurter Allgemeine Zeitung [GER], like the French ones, focussed on von der Leyen’s attacks on AstraZeneca rather than on Britain, noting that Biontech and Moderna did fulfil their contractual obligations, while AstraZeneca did not. The Sueddeutsche Zeitung, Germany’s second largest daily newspaper, seemed even less interested in the row, leading on Monday morning with possible sanctions against Turkey ahead of the EU summit instead. The coverage of the vaccine row, was pretty much limited to a factual report of what von der Leyen had said [GER]. Germany’s largest daily newspaper – the tabloid Bild – did not seem particularly interested in the issue either. An article from March 20th, 2021 after von der Leyen’s announcement, did mention the term ‘vaccine war,’ but only when summarising the British press’s reaction to the announcement: Brits talk about ‘vaccine war’ [GER]. The rest of the article focuses on other vaccine producers’ warning about the impossibility of implementing an export ban, due to possible retaliatory measures and disruption to global supply chains.
In short, clearly the European Commission’s president and some national governments – mainly France – adopt a tough stance on vaccine exports. Yet, an – admittedly cursory – glance at some German and French newspapers leaves no doubt that for our ‘European Friends’– to use the phrase that our PM (sarcastically or hypocritically one has to assume) has started to use –, the vaccine row is not about Brexit or even Britain. It is mainly about a Swedish-British private company that has contractual obligations towards the EU. This look beyond the borders confirms the view that it is mainly the British government (and perhaps part of the red top press) that wants this issue to be about Brexit, because it fuels their nationalist agenda.
Trade: Two parliamentary reports and emerging asymmetric trade relations
The other interesting development – this one genuinely Brexit-related – this week relates to trade. The UK Parliament has published two parallel reports on trade after Brexit. The reports do not contain anything new to anyone who has followed the events since January 1st, 2021, but seeing the vast number of issues that remain unsolved under Boris Johnson’s Trade and Cooperation Agreement (TCA) is quite frankly overwhelming.
The House of Lords’ EU Goods Sub-Committee published a report that unsurprisingly concluded that trade in goods was significantly harder after the end of the transition period. Indeed, the committee’s chair Baroness Verma explicitly states that “The Brexit trade deal struck with the EU may have prevented the nightmare of a ‘no deal’ exit for the UK, but a lot of unfinished business remains between the two sides.”
The report lists an impressive list of issues where the TCA does not provide any solutions. These include: The risk of unilateral tariffs due to discrepancies in subsidies regimes under ‘level playing field’ provisions; the impact of the ‘rules of origin’ provisions on supply chains (and notably the risk for producers from poorer countries to be squeezed out of them); the failure to conclude a mutual recognition agreement on conformity assessment is called a ‘significant blow,’ as it introduces new testing requirements; the risk of permanent physical checks at borders due to sanitary and phytosanitary measures on trade of food and animal products; the urgent need to invest in and simplify customs procedures; the impact of new VAT rules on traders; various problems related to the transport of goods, including the need to conclude bilateral aviation agreements with the 27 EU members states; and the need for more support for (small) businesses to navigate the ‘the substantial increase in administrative complexities’ (bonfire of red tape anyone?).
The House of Lords’ EU Services Sub-Committee’s parallel report on services trade is only slightly more positive. While it notes that the “TCA offers unprecedented cooperation on digital trade compared with other EU free trade agreements,” the list of concerns is worrying. Thus, the committee mentions the absence of mutual recognition of equivalence in financial services as a key issue and is concerned that “over time this may lead to a big shift of people and assets out of the UK.” Another big concern is the issue of business mobility provisions both for professional services and creative industries. The committee notes that “[t]here will be real problems for UK professionals whose qualifications are not recognised in the EU under current arrangements.” Mobility provisions will particularly affect professional services and the creative industries which employ 2m people but who will find it ‘difficult […] to tour in the EU.’
Meanwhile, the attempt to ‘take back control’ keeps producing interesting unintended consequences. Other Brexit bloggers have previously noted the paradoxical situation where the UK government’s unilateral decision to delay the introduction of certain border checks – due to delays in putting in place the necessary border infrastructure – means that exports have become more difficult, imports have not. In other words, EU companies continue to benefit from relatively easy access to the UK market, UK companies exporting to the continent face much stricter barriers. The resulting ‘asymmetric trade’ pattern advantages EU companies who face less competition at home, but maintain access to the UK market.
A similar pattern of ‘asymmetric trade’ - to the disadvantage of UK companies – has emerged in aviation. Alastair Wilson – Managing Director of Titan Airways – told BBC Radio 4’s Today programme [at 6:12am] about the impact of the TCA on chartered airlines. In the absence of multilateral or bilateral agreements about the ‘fifth freedom’ (air travel), UK-based airlines need to obtain permits from individual EU member states to fly to and within the EU. For France and Germany, the permit procedures follow a so-called “non-objections process” which applies to all third countries. This procedure implies that EU carriers have a first right of refusal to operate any given job. This in turn means UK companies have to show that all national carriers are unavailable before the UK airline can obtain a permit. Consequently, many jobs involving EU destinations go to EU carriers rather than UK ones. Yet, the reverse is not true. According to Alastair Wilson, the UK authorities adopt a more liberal approach, making it relatively easy for EU carriers to obtained permits to fly to and within the UK. These instances of ‘asymmetric trade’ are hardly compatible with the ‘taking back control’ rhetoric. While these problems can certainly be put down to ‘teething issues’ and may be resolved in time, Titan Airways has started the process of moving its headquarters from Stansted to Malta.
Taking back control…and selling out
Another piece of evidence about how shallow the notion of ‘taking back control’ is, comes from the latest news about an investment deal signed between the UK and Abu Dhabi, which will lead to considerable investment from the UAE country in UK life sciences and green technologies. This multibillion-pound deal is the first one signed by the new Office for Investment, which the PM launched in November to stimulate inward foreign investment.
Of course, there is nothing fundamentally new about the UK relying heavily on foreign investment and being willing to sell off the family silver more than any other European country (remember the Cadbury takeover?). Still, the Abu Dhabi deal is another stark reminder that anyone who may have voted for Brexit hoping for some sort of control not just over ‘our laws and borders,’ but also our economy, will be bitterly disappointed. Brexit will not increase British control over companies, but will replace dependence on investments from certain regions of the globe to others. This is neither surprising, nor necessarily a big problem depending on where one stands on free trade, human rights, and other issues, but it highlights the fundamentally ambiguous – dare I say ‘two-faced’? – nature of the Brexit project: promising at the same time national sovereignty and deepened international economic linkages. Other Brexit bloggers and particularly Chris Grey have noted this “longstanding and paradoxical dynamics of Brexit […] between Brexit as a nationalist and protectionist project and as a globalist free market project.” Achieving both will be impossible, but in the process of trying, important historically grown alliances and economic relationships may be destroyed and replaced with others.
Northern Ireland Protocol (NIP): The gathering storm?
The week finished with some really worrying news from Northern Ireland. The Independent reported stark warnings from a senior unionist figure who considers that “[w]e are perilously close to a line which, when crossed, will lock us all into a pattern all too familiar.” In the Belfast News Letter, Peter Robinson, former DUP leader and First Minister of NI, warned that unionists “[…] reflect on the commitments they were given, and which have been appallingly broken leaving the odour of betrayal in the air.”
Earlier in the week, the EU had signalled its willingness to discuss (renegotiate?) the NIP with the UK government if the UK started to follow the agreed upon procedure of providing a road map before taking any unilateral decisions on grace periods and other trade issues. Given the unionists’ warning, it would seem imperative that the UK government seizes its chance to tackle the issues around the NIP as soon as possible by engaging with the EU in constructive talks rather than persisting with grandstanding and name-calling. As, Baroness Verma also noted, a more conciliatory attitude would help to solve some of the long list of trade issues the EU Goods Sub-Committee found: “Ongoing dialogue will be crucial to achieving smoother trade. The TCA should be treated as the start, not the end of the UK’s new relationship with the EU.”
Sadly, there is not much cause for optimism in this respect. Despite some conciliatory tones from the PM himself, his ministers spent another week fanning the flames rather than starting to build a more constructive relationship with the EU. This goes beyond rhetoric: The Lords’ EU Services Sub-Committee noted with regret that the government had decided to “defer establishing the Partnership Council and other governance arrangements under the TCA,” which are essential to guarantee a smoother implementation of the TCA. This does not bode well for the governments willingness to seize the opportunities to solve urgent issues such as the ones around the NIP before it is too late.