In this issue: Free trade in healthcare products, how to exchange data from coronavirus tracing apps, and the EU vaccine strategy.
- Free trade in healthcare products: The Commission has expressed support for trade facilitation for medicines and medical goods under a WTO framework. This would work to enable greater access to healthcare products as well as to avoid disruptions in times of crisis. Commissioner Hogan presented the idea, which could result in an agreement open to all WTO members, and said “The ideas we are putting forward today aim to facilitate global access to affordable healthcare products, including for vulnerable countries without appropriate manufacturing capacities. The goal is to make supply chains more resilient and diversified and to support efforts to build strategic reserves of critical equipment.” This could include abolishing tariffs, establishing cooperation schemes, and improving WTO rules for trade in essential goods.
- State Aid, the news: The Commission drafted a proposal for a third amendment of the State aid Temporary Framework currently in place, adopted to deal with changed requirements under COVID-19 in March. The proposal sent to Member States aims to allow aid to micro and small businesses which had already been in difficulties before the 2020 pandemic hit, as well as to incentivise private investors to provide COVID-19 related recapitalisation. Commissioner Vestager justified the proposal with the “specific challenges” faced by micro and small enterprises. If private investors increased participation, this would reduce the need for state aid, she said.
European Investment Bank
- The EIB approved a €7.5 billion financing package for projects inside and outside Europe aiming to invest in health, private sector, clean transport, education, and energy, the sectors most impacted by the pandemic. €3.2 billion will go into public health and business investments to, amongst other things, improve hospital infrastructure and emergency response. Another €1.5 billion will contribute to cleaner transportation through regional trains and electrical charging development.
Council (and other ministerial bodies)
- A fragile Europe: In a speech to the Bundestag German Chancellor Angela Merkel said that the coronavirus pandemic has shown “how fragile the European project still is.” EU leaders will meet Friday by video conference to discuss the EU budget and proposed €750 billion recovery fund. Merkel stressed the need to act quickly and decisively and “in the spirit of compromise” to find a suitable solution.
Mobility, Transport, and Trade
- To quarantine or not to quarantine: Business travel is picking up again, and summer breaks are around the corner. If you want to know where in Europe you can travel and whether you would have to self-quarantine or not, have a look at this overview.
- They believe we can fly ♫: The EU Aviation Safety Agency (EASA) published guidelines for air operators to identify safety threats related to the pandemic for when air operations (read: flying) will pick up again to get back to “business as usual” (although, will flying ever be the same?). In any case, EASA lays out details on safety risk management processes, compliance and safety monitoring, and change management to make sure the EU’s air operations are managed in a “robust and resilient” manner.
- No more bottlenecks: German Transport Minister Andreas Scheuer said that Germany would use its upcoming Council Presidency to draft common EU protocols to maintain freight traffic free of disruptions in case of future pandemic scenarios. At the beginning of COVID-19, several EU countries closed their borders and restricted mobility, also affecting the free flow of goods and leading to “bottlenecks” at borders. Scheuer said it was to avoid this in the future and called for “uniform standards and processes so that supply chains are secured at all times” (source: POLITICO).
- Trade-in-goods numbers plunging: According to Eurostat, EU exports for April 2020 fell by 28.2%, compared to April 2019. The EU’s trade surplus fell to €0.2 billion from €12.9 billion in April last year. Trade within the EU also decreased by 32%, markedly because of a stop in production within the EU due to COVID-19 related factory closures.
- Denmark and Spain calling for free global trade:Reyes Maroto, Spanish minister for trade, and Simon Kollerup, Danish minister for business, have jointly urged not to restrict global trade. In a joint op-ed, the duo argues that the crisis did reveal undue EU dependency on third countries and some key value chains, and that there was a need “to foster industrial ecosystems of strategic importance for Europe’s resilience in crisis.” At the same time, the ministers stress the importance of global value chains and call for diversification rather than dismantling. “Europe should use its economic and regulatory muscles to make trade fairer, sustainable and digital, both within and outside the EU.”
- Cross-border data exchange (minus France): EU governments have agreed to technical guidelines on how to exchange data from their coronavirus contract-tracing apps which will allow the apps to register contacts when people travel across borders. The guidelines ensure the “safe exchange of information…based on a decentralised architecture.” The sharing mechanism excludes France whose app is based on a “centralised” design.
- Germany’s homegrown app: After going back to the drawing board mid-April in an attempt to find a tracing app that would meet German’s high privacy standards, Germany’s app has finally been launched. Created by German companies Deutsche Telekom and SAP the app is based on the Apple and Google approaches – not saving information from all users in one place but on the users’ phones, and automatically deleted after 14 days. The data is also encrypted.
Vaccine Development & European Health Resilience
- Vaccine alliance: Pharma company AstraZeneca has signed a contract with Germany, France, Italy and the Netherlands, securing 400 million doses of coronavirus vaccine at cost, if it is effective. AstraZeneca with the University of Oxford is currently carrying out human trials of their vaccine. The alliance is expected to pursue similar arrangements with other vaccine manufacturers.
- EU vaccine strategy: The Commission presented its strategy to secure early access of coronavirus vaccines for EU citizens at a recent minister of health Council meeting. The ministers stressed the need for transparency in the negotiations, use of funds, and distribution of the eventual vaccine. The Commission has a budget of €2.7 billion through the Emergency Support Instrument to use via an advance purchasing agreement. The purchasing agreements help companies pay for the manufacturing of the vaccine upfront so that it can be more quickly deployed.
- GMOs could get the okay: Current law regulates that GMOs used in medical products must be specifically authorised and undergo an environmental impact assessment, but this could change with a new Commission proposal. The proposal would allow GMOs to be used in clinical trials, during emergencies, before undergoing environmental impact assessments and receiving The Commission hopes to streamline the process which is currently hindered by Member States who each have their own rules on the issue. An impact assessment would be required before the vaccine receives marketing authorisation.
- Innovative vaccine production: Sanofi announced that it will invest €610 million to create innovative research sites in France that can produce 3 to 4 vaccines simultaneously, instead of the usual 1. The sites will be used to ensure “the supply of vaccines to France and Europe in case of new pandemics.” Sanofi has also been in touch with the alliance of 4 counties (Germany, France, Italy, the Netherlands) to create a similar deal to buy vaccines at costs, as has been agreed with AstraZeneca.
- Pharma reshoring in France: French President Emmanuel Macron announced new investments and a healthcare reshoring initiative. The French government will invest €200 million to increase the country’s medical production capacity and research and development into coronavirus vaccines and treatments. The reshoring initiative will aim to bring certain critical production capabilities back to France, such as the production on paracetamol which is produced in China. France aims to reshore its production within three years’ time.
- Quelling the anti-vax trend: The International Coalition of Medicines Regulatory Authorities has issued a set of statements in an attempt to quell fears about the safety of vaccines. As immunisation rates drop globally and in the face of the current pandemic the statements outline the regulatory process for vaccines and stress that getting vaccinated is “everyone’s responsibility.”
- Another auto bailout: Spain will spend €3.7 billion to bail out its faltering auto industry and will set aside €350 million in incentives to boost car sales until the end of the year. Higher incentives will be offered for more energy efficient cars but is also available for traditional engines. The bailout includes money for charging stations and e-transport, as well as for sustainable mobility research and development.