Could export controls hamper global vaccine distribution?

Imports and Exports | | MIC Customs Solutions |

Export controls on vaccines from the EU and India could hamper global efforts to combat the Covid-19 pandemic.

One of the most pressing issues in global trade at the moment is surely how pharmaceutical firms distribute billions of doses of various COVID-19 vaccines globally. With the pandemic still raging and many countries only in the earliest stages of vaccine rollouts, this is unquestionably a matter of great urgency for governments around the world.

This naturally places great pressure on supply chains and distribution networks. With manufacturing facilities for many of the key vaccines concentrated in just a few jurisdictions, including the EU, US, India and China, steps to facilitate the smooth import and export of these pharmaceutical products - as well as necessary accessories such as syringes and refrigeration units - are crucial.

However, there have been increasing signs of nations seeking to impose export controls on these items. So could this hamper global efforts to tackle the COVID-19 pandemic, and how can countries work to ensure supply lines remain open?

How are countries around the world handling vaccine exports?

Many commentators have warned of the dangers of 'vaccine nationalism' with regards to the export of these products, but several political disputes have already overshadowed exports. The most notable is that between the EU, UK and Anglo-Swedish pharma firm AstraZeneca, while export controls have been used by Italy to block the shipment of 250,000 AstraZeneca doses to Australia.

But the EU is not the only jurisdiction taking action. Recently, it has been reported that India is also seeking to restrict the export of vaccines manufactured within its borders. Reuters stated that the Indian government has temporarily blocked the export of the AstraZeneca vaccine, which is being manufactured by the Serum Institute of India (SII). Officials are said to be focused on meeting domestic demand as the number of cases in the country rises.

This is set to have a major impact, as India is the world's largest manufacturer of vaccines and its facilities are a critical component of the international COVAX program, which aims to ensure poorer countries do not miss out on access to these supplies. SII was expected to deliver 90 million doses to COVAX in March and April and countries around the world have warned of disruption to supply.

In the Asia-Pacific region, South Korea, Indonesia, the Philippines and Vietnam have all raised the alarm over disruptions, while in Europe, the UK is also set to be affected by supply constraints from India - which could add to its ongoing dispute with the EU over potential export controls on the Pfizer vaccine.

What could the consequences be?

As a result, many countries are looking to other avenues in order to source their vaccine supplies. Reuters noted Philippine president Rodrigo Duerte has loosened restrictions on private sector imports of medical goods, while Vietnamese officials have made similar moves to encourage businesses to get involved as the country faces a 40 percent cut in the number of doses imported under the COVAX scheme.

One nation that may be poised to step up and take advantage of these supply constraints is China. The country has long been focusing on increasing its soft power with developing nations, and it sees 'vaccine diplomacy' as a key way to expand its influence.

Chinese news agency Xinhua reports that the country is already exporting its Sinovac COVID-19 vaccine to 27 countries, as well as providing free vaccine aid to 53 nations, targeting low and middle-income countries that may struggle with the cost of procuring Western-made inoculations. Further supply constraints may well lead to a greater uptake of interest among affected nations, while Russia's Sputnik V could also be set to benefit.

Indeed, the Philippines' vaccination chief Carlito Galvez told reporters: "We have good diplomatic relations with China and Russia and we are asking if we can have access to their vaccines in April."

Even wealthier countries have called for more global cooperation to remove export restrictions and ensure vaccines get where they are needed as quickly as possible. Japan, for example, is also struggling to procure supplies as it is dependent on imports of Pfizer products from Europe.

Its vaccines minister Taro Kono told Reuters: "Some people are using vaccines for diplomacy, some people are trying to prioritize. Some people are buying like three to five times as many vaccines compared to their population. That’s unnecessary.

"We really need to have the global leaders sit down and think this is a global issue, not the domestic issue, and try to solve this together."