Transatlantic Trade | US and Europe – Week of September 20, 2021
Tension between the United States (US) and France remains heightened, spilling over to European Union (EU) – however, the EU-US Trade and Tech Council is set to move forward this coming week. Global leaders addressed the United Nations General Assembly this past week, with the US President convening a virtual COVID-19 Summit on the margins. Meanwhile, the US Government announced it would ease some air travel restrictions for vaccinated foreigners and moved forward with approving the Pfizer/BioNTech COVID-19 vaccine boosters for some Americans. The European Commission attempted to extend the EU’s temporary vaccine export authorization program, but was stymied. And the United Kingdom (UK) Government unveiled a five-point plan for digital trade.
In this issue, we also cover:
COVID-19 highlights among the transatlantic partners;
Notable EU, US, and UK developments; and
A brief UK-EU trade deal update.
On Wednesday, 22 September, US President Joe Biden convened a virtual COVID-19 Summit on the margins of the UN General Assembly. He spoke of supercharging efforts in three key areas: (1) ramping up vaccine production, donations, delivery, and administrating the vaccine globally; (2) addressing the oxygen machine needs globally, making other treatments more accessible, and increasing the availability of public health tools, like masks and tests; and (3) addressing the global health security infrastructure to better handle future pandemics. The White House released a fact sheet on targets for the Summit. Separately, the United States and EU also held a joint COVID-19 Manufacturing and Supply Chain Taskforce meeting to finalize its mission statement.
This week, the European Commission proposed to Member States that it would extend the EU’s temporary vaccine export authorization program – a mechanism to monitor the export of COVID-19 vaccines manufactured in Europe that is set to terminate this month – for an additional three months. The Commission, however, failed to secure the majority of EU Member States’ approval it needed to endorse the proposed extension. Consequently, the mechanism is likely to end at the end of the month. The Commission may attempt to push for the extension in a different manner, but it is unlikely their attempt will gather the necessary support from Member States.
On 20 September, the Biden Administration shared all international travelers coming into the United States will need to have proof of full COVID-19 vaccination. In announcing the new travel requirements, White House COVID Coordinator Jeffrey Zients said that foreign nationals would also have to be tested three days prior to departure to the United States and show proof of a negative COVID-19 test. Unvaccinated Americans will have to test within one day of departure and be required to test again after their arrival back in the United States. The Centers for Disease Control and Prevention (CDC) will require airlines to collect information from US-bound travelers for contact tracing purposes. According to Zients, the CDC will put forward a list of COVID-19 vaccines that qualify for air travelers and what would constitute as fully vaccinated. Meanwhile, the US land border with Mexico and Canada remains closed to non-essential travel, with the United States extending the closure to 21 October. The US land border has been closed since March 2020, with the closure re-evaluated on a monthly basis.
On Sunday, 19 September, Dr. Anthony Fauci, White House Chief Medical Advisor, suggested the Pfizer/BioNTech COVID-19 vaccine would likely be approved for children aged five to 11 this fall. Moderna’s COVID-19 vaccine for children under the age of 12, he said, is expected to be approved a couple of weeks later. On Monday, 20 September, Pfizer/BioNTech reported its COVID-19 vaccine, formulated at a smaller dose, is effective for children aged five to eleven. Meanwhile, the European Medicines Agency is expected to make a decision by early November on whether the BioNTech/Pfizer COVID-19 vaccine can be administered to children as young as five years old.
On Thursday, 23 September, the Advisory Committee on Immunization Practices (ACIP), which advises the US Centers for Disease Control and Prevention (CDC), recommended Pfizer/BioNTech COVID-19 vaccine boosters for Americans 65 and older, along with those living in nursing homes and some immunocompromised Americans. ACIP, however, voted against providing the booster shots for health care workers and others in high-risk occupations. Late on Thursday, CDC Director Dr. Rochelle Walensky signed off on the series of ACIP recommendations but overruled the panel’s recommendation for frontline workers. She stated:
As CDC Director, it is my job to recognize where our actions can have the greatest impact. At CDC, we are tasked with analyzing complex, often imperfect data to make concrete recommendations that optimize health. In a pandemic, even with uncertainty, we must take actions that we anticipate will do the greatest good.”
On 24 September, the Biden Administration issued its guidance for Federal contractors to be vaccinated. The new guidance says that Federal contractor employees covered by the rules “must be fully vaccinated no later than December 8” and adds that after that date, employees must be vaccinated by the first day of performance on a new or extended contract. The Administration also said all covered contractors must be vaccinated “except in limited circumstances where an employee is legally entitled to an accommodation.” Meanwhile, US Secretary of Commerce Gina Raimondo indicated last week that the Occupational Safety and Health Administration’s (OSHA) emergency temporary standard requiring employers with more than 100 workers to have them inoculated or tested weekly will be released in October.
On 22 September, the UK and the Republic of Korea (“South Korea”) announced they would share COVID-19 vaccine doses to mutually support each nation. The UK is set to send over one million Pfizer/BioNTech vaccines to South Korea to enhance their vaccination programme, with the first batch expected to arrive in the coming weeks. By the end of 2021, South Korea will return the same volume of doses to the UK. This arrangement is similar to one announced with Australia earlier this month.
Notable EU Developments
The new AUKUS alliance dominated the Brussels scene this week, with France’s strong response to the news creating a chain reaction to the EU’s diplomatic and trade negotiations. French European Affairs Secretary Clément Beaune talked critically about Australia’s U-turn decision to end the multi-billion submarine deal with France, stressing that this would also impact the ongoing EU-Australia trade negotiations, making it “unthinkable to move forward on trade negotiations as if nothing had happened with a country in which we no longer trust”. The European Commission is expected to “analyze the impact” of the AUKUS alliance on the EU-Australia trade talks.
Similarly, Internal Market Commissioner Thierry Breton called for the possibility of pausing and resetting the EU-US relationship to evaluate the impact of AUKUS. In this spirit, EU Commissioners discussed the possibility of postponing the EU-US Trade and Tech Council (TCC) – set for 29 September in Pittsburgh, Pennsylvania – but it was ultimately announced the TTC would go ahead as planned. On Friday, Executive Vice-President (EVP) and Trade Commissioner Valdis Dombrovskis briefed the EU27 Ambassadors on the EU’s preparations in this context.
On 22 September, the European Commission published a legislative proposal to establish an EU’s generalized scheme of preferences for the years 2024-2034. The proposed rules would aim to reduce import duties from products coming from less developed countries. The proposal will now go through the EU’s decision-making process. EVP Dombrovskis stated,
There is no need to overhaul the scheme. But we have done some fine-tuning, to respond better to the changing needs and challenges of beneficiary countries — and to bring the scheme closer in line with our trade sustainability principles”.
Notable US Developments
President Biden and French President Emmanuel Macron spoke of the Franco-American diplomatic tension linked to the AUKUS alliance, issuing a Joint Statement that recognized that “the situation would have benefited from open consultations among allies on matters of strategic interest to France and our European partners.” Opening an “in-depth consultation” was highlighted, with a meeting of the two leaders confirmed for the end October.
National Security Advisor Jake Sullivan met with European officials on Wednesday. A White House readout reflected,
Mr. Sullivan expressed support for the meeting next week of the U.S.-EU Trade and Technology Council, which will work to tackle a diverse set of challenges, including supply chain resilience, artificial intelligence, and global trade issues.”
On 21 September, President Biden delivered remarks to the U.N. General Assembly (UNGA), speaking of the shared global challenge of combatting COVID-19, while also emphasizing his priority to rebuild alliances and revitalize partnerships, saying “they’re essential and central to America’s enduring security and prosperity.” He affirmed the importance of NATO, saying, “We’re working with our Allies toward a new strategic concept that will help our Alliance better take on evolving threats of today and tomorrow.”
President Biden added,
We renewed our engagement with the European Union, a fundamental partner in tackling the full range of significant issues facing our world today.”
Also on 21 September, President Biden and UK Prime Minister Boris Johnson met at the White House. A White House readout reflected the leaders discussed “ongoing work on Afghanistan, as well as developments in the Indo-Pacific and the critical role of European allies and partners, including NATO and the EU, in the region. They also discussed Northern Ireland, and President Biden reiterated his longstanding support for a secure and prosperous Northern Ireland in which all communities have a voice and enjoy the gains of the hard-won peace.” In remarks to the media, Prime Minister Johnson acknowledged the prospects of securing a trade agreement with the United States were diminished, as he noted President Biden has other priorities on his plate. While the Prime Minister had raised the idea of joining the US-Mexico-Canada Agreement (USMCA), the Office of the US Trade Representative stated the agreement is a trilateral trade deal that is not open to other countries.
In a third meeting, US Secretary of Commerce Gina Raimondo and National Economic Council Director Brian Deese convened semiconductor industry participants on Thursday to discuss progress the industry has made to address supply chain challenges and increase supply chain transparency. A summary reflected that participants “welcomed the swift actions taken by the [Biden] Administration to work with diplomatic partners to strengthen the public health response in key production locales to support the safe reopening of factories.” To better understand where bottlenecks are occurring, the Commerce Department launched a Request for Information, asking all parts of the supply chain – producers, consumers, and intermediaries – to voluntarily share information about inventories, demand, and delivery dynamics.
Both chambers of the US Congress were in session last week and face a busy legislative schedule this coming week, including addressing the US debt ceiling and funding the Federal Government beyond 30 September to avert a shutdown. The House of Representatives is also set to vote on the $1.2 trillion bipartisan infrastructure package. On 22 September, the Senate confirmed Jayme White to serve as Deputy US Trade Representative.
Notable UK Developments
Anne-Marie Trevelyan, the UK’s new Secretary of State for International Trade, addressed London Tech Week’s Global Leaders Innovation Summit on 20 September, outlining a five-point plan for digital trade. She stated the plan would:
First, open up digital markets to benefit consumers and businesses;
Second, make it simpler and cheaper for businesses to trade internationally by securing trusted cross-border data flows;
Third, advance high standards in consumer and intellectual property (IP) protections;
Fourth, champion modern digital systems to help businesses cut through needless paperwork when trading; and
Fifth, plan to use free trade agreements (FTAs), the UK’s G7 Presidency and independent voice at World Trade Organization (WTO) to push the rules of global trade into the 21st century.
On 24 September, Prime Minister Johnson spoke with French President Macron. A 10 Downing Street summary reflected the discussion touched upon cooperation in the Indo-Pacific and Africa, small boat crossings in the Channel, fisheries licences, and the Northern Ireland Protocol.
UK Foreign Secretary Liz Truss visited Mexico on 23 September to boost diplomatic and economic ties in the country and wider region. The Foreign Secretary said of her trip,
A trade deal with Mexico, for example, will pave the way for us to join the CPTTP [Comprehensive and Progressive Agreement for Trans-Pacific Partnership], one of the world’s biggest free trade areas.”
UK-EU Trade Deal Updates
Earlier this week, European Commission Vice President Maroš Šefčovič called on the UK and EU to resolve all outstanding issued related to the Northern Ireland Protocol by the end of the year, in order to reduce tensions between the trading partners.