Transatlantic Trade | US and Europe – Week of September 6, 2021
This week, the United Kingdom (UK) provided an extension related to the customs requirements for its goods transiting to Northern Ireland, thereby providing additional time for negotiations with the European Union (EU) to find a path forward to resolve the trade concerns tied to the Northern Ireland Protocol. The European Commission published its 2021 Strategic Foresight Report, further delineating its policy agenda for the bloc. Later this month, the United States (US) will host the EU-US Trade and Tech Council, seeking to find common ground on trade-related matters.
While the EU continues to debate whether to move forward with COVID-19 vaccine booster jabs, the US President announced Federal requirements this week, seeking to compel US employers to mandate vaccines for their American-based employees. US courts are expected to see legal challenges to the new workforce vaccine mandate policy in the coming days.
In this issue, we also cover:
COVID-19 highlights among the transatlantic partners;
Notable UK, US and EU developments; and
A brief UK-EU trade deal update.
The debate continues in the European Union over whether to propose a COVID-19 booster shot. The European Medicines Agency (EMA) is expected to issue a recommendation within the next few weeks on whether a BioNTech/Pfizer booster shot will be required. However, due to a request from the EMA for additional information from the manufacturers, the Agency’s recommendation may be further delayed.
On Thursday, US President Joe Biden outlined his Administration’s “six-pronged” strategy to reduce the number of unvaccinated Americans by using regulatory powers and other actions to increase the number of Americans covered by vaccination requirements. The White House stated on its website: “[T]hese requirements will become dominant in the workplace.” The President claimed in his remarks to the nation, “This is a pandemic of the unvaccinated.”
President Biden encouraged vaccine mandates for work places and schools, issuing new Executive Orders that mandate most Executive Branch employees and Federal contractors and subcontractors be vaccinated, with no alternative for weekly COVID-19 testing. President Biden said the US Department of Labor is developing mandatory rules requiring large employers in the private sector to ensure their workers are vaccinated or submit to coronavirus testing. The Occupational Safety and Health Administration (OSHA) is drafting the emergency temporary safety (ETS) rule that is expected to require all employers with more than 100 employees verify their workforce is fully vaccinated, or require any unvaccinated workers produce a negative test result “on at least a weekly basis.” The White House estimates the OSHA ETS rule will affect about 100 million American workers, or two-thirds of the American workforce.
This week, the US Food and Drug Administration (FDA) reportedly declined Humanigen Inc’s request for emergency use authorization (EUA) of its lenzilumab drug to treat hospitalized COVID-19 patients. The company filed its EUA application with the FDA in May, citing late-stage trial data.
On 3 September, the UK Government shared the country’s four chief medical officers will provide further advice on the universal COVID-19 vaccination of children aged 12 to 15, following the advice of the independent Joint Committee on Vaccination and Immunisation (JCVI). The Medicines and Healthcare products Regulatory Agency (MHRA) has approved the Pfizer/BioNTech and Moderna vaccines for people aged 12 and over. The British Government also announced a record investment of around £12 billion per year over the next three years in health and social care.
Notable UK Developments
The UK Government announced this week that it will release the UK’s trade and investment position, which summarizes British trade statistics, on 20 October. On 9 September, the UK and Switzerland announced they had secured an agreement that will ensure citizens living or working in either country can receive healthcare and an uprated state pension.
Notable US Developments
Both chambers of the US Congress were in recess this week, however, some House congressional committee were active this week. Senators return to Washington next week; House lawmakers reconvene the week of 20 September. Upon their return, US lawmakers will have to address raising the debt ceiling to avert the US Government from defaulting and approve funding beyond 30 September to keep the US Government from shutting down.
Senator Joe Manchin (D-West Virginia) reportedly spoke with the White House recently, privately sharing his concerns with the $3.5 trillion Democratic reconciliation package that House congressional committees started pulling together this week. The Senator indicated he could possibly support a fraction of the Democrat’s budget proposal. This comes after the Wall Street Journal published his opinion piece last Thursday that urged Democrats to take a strategic pause on their $3.5 trillion spending package, noting an overheated economy and costly “inflation tax” and that Congress already spent $5 trillion over 18 months related to the coronavirus pandemic. He noted an “unprecedented array of challenges” facing the country, stating he disagrees with those in Congress that “have a strange belief there is an infinite supply of money to deal with any current or future crisis, and that spending trillions upon trillions will have no negative consequence for the future.” Senator Kyrsten Sinema (D-Arizona) has also said that she will not support a package that costs $3.5 trillion.
On Wednesday, 8 September, a group of bipartisan lawmakers announced they would introduce the American Beef Labeling Act next week, a bill that would reinstate mandatory country of origin labeling (MCOOL) for beef. Senator John Thune (R-South Dakota), a bill co-sponsor, observed,
Unfortunately, the current beef labeling system in this country allows imported beef that is neither born nor raised in the United States, but simply finished here, to be labeled as a product of the USA. This process is unfair to cattle producers and misleading for consumers. When you see a ‘product of the USA’ label on the grocery store shelf, it should mean just that.”
Senator Cory Booker (D-New Jersey) added, Americans should know exactly where their beef is coming from, but current USDA labeling practices allow big meatpacking companies to falsely label imported beef as being a product of the USA.” He joins Senator Thune and Senators Jon Tester (D-Montana) and Mike Rounds (R-South Dakota) in co-sponsoring the bill.
Notable EU Developments
A European Parliament notice last week reflected its International Trade Committee will hold a hearing on US trade policy on 27 September. House Ways & Means Trade Subcommittee Chair Earl Blumenauer (D-Oregon) and European Ambassador to the US Stavros Lambrinidis are among the hearing’s scheduled speakers. The hearing is set to focus on “U.S. trade policy and how the EU [European Union] and the USA can work better together for a fairer and more effective trade policy.”
The European Commission published this week its 2021 Strategic Foresight Report, a multidisciplinary and forward-looking report focusing on defining the main policy themes that will dominate the EU political agenda. Not surprisingly, the EU’s open strategic autonomy concept is at the center of the report, which identifies 10 strategic areas of policy action where there are opportunities for the EU to advance forward. From a trade perspective, the report stresses that there should be a focus on increasing, “[T]he capacity to store, extract and process data, while satisfying the requirements of trust, security and fundamental rights”, as a key factor contributing to the EU’s digital sovereignty. Securing and diversifying the supply of critical raw materials will be important. The report reflected, “A smart mix of industrial, research and trade policies with international partnerships could ensure sustainable and diverse supply”. The EU’s strategic role as a regulatory and standard setting power in key markets and technologies due to its trade position is also underlined. Maintaining the multilateralism and continuous cooperation with international partners is further highlighted, particularly with respect to “countering coercive action or extra-territorial sanctions imposed by third countries”.
The first EU-US Trade and Tech Council (TTC) is now scheduled on 29 September in Pittsburgh, Pennsylvania, where European Commission Executive Vice-Presidents Margrethe Vestager and Valdis Dombrovskis will be meeting with US Secretary of State Antony Blinken, US Commerce Secretary Gina Raimondo and US Trade Representative Katherine Tai. As reported last week, the agenda for the meeting is still under development. One topics to be discussed relates to the EU-US cooperation on the semiconductor manufacturing and related supply chains.
Meanwhile, it appears the EU’s anti-coercion instrument, embedded within a legislative proposal in the context of the EU’s Open Strategic Autonomy, will be published on 1 December, instead of October, as was initially planned.
UK-EU Trade Deal Updates
The UK decided this week to extend the grace periods for post-Brexit customs checks in Northern Ireland on goods from Britain, Scotland, or Wales. This move is intended to provide space for further discussions of implementation of the Northern Ireland Protocol with the EU. The European Commission issued a statement that took note of the UK’s decision, but it reiterated that both sides are legally bound to fulfil their obligations under the Withdrawal Agreement. The statement further underlined the EU maintains the belief that renegotiating the Northern Ireland Protocol is not an option, despite the UK’s persistence.
UK Cabinet Minister David Frost was vocal this week about the risk of long-term effects on EU-UK relations in light of issues surrounding implementation of the Northern Ireland Protocol. Nevertheless, Lord Frost and his counterpart, European Commission Vice-President (VP) Maroš Šefčovič, held a phone call this week, following the summer recess and as technical discussions are intensifying in anticipation of their upcoming October meeting. VP Šefčovič met with Northern Ireland political and business leaders this week. As the European Commission works to put forward additional solutions on the implementation of the Northern Ireland Protocol in the coming weeks, Democratic Unionist Party Leader Jeffrey Donaldson from Northern Ireland warned of possibly withdrawing from the Northern Ireland Assembly – which could force a snap election – if the Northern Ireland Protocol is not withdrawn within weeks. The statement has been met with skepticism, particularly by Irish Minister for Foreign Affairs Simon Coveney, who stressed, “ [S]olutions do exist, within the parameters of the Protocol, for the issues that have arisen”.