(Bloomberg) -- Even as the U.K. sets records for Covid-19 vaccines administered in a day, the European Union’s inoculation campaign continues to sputter, while member countries face a fresh round of lockdowns. Against that backdrop, the bloc is ready to start withholding shots from the U.K., according to a senior EU official.
Such a move would set off a chain of potential consequences.
What is the EU threatening to do?
The EU will probably reject authorizations to export AstraZeneca (NASDAQ:AZN) Plc’s vaccines and their ingredients to the U.K. until the drugmaker meets its obligations for deliveries to the 27-nation bloc, the official said. The European Commission laid the groundwork for the move last week, saying it would restrict vaccine exports to countries that don’t reciprocate.
That means vaccines and ingredients produced in European factories would be reserved for local deliveries, the EU official said. No final decision has been made, however, and EU member states have been divided on the idea of an export ban.
The Commission may present a proposal for additional vaccine export curbs as soon as Wednesday, people familiar with the matter said. Leaders will assess any such restrictions over a video summit on Thursday and Friday.
How has the U.K. responded?
U.K. leaders have urged against impeding exports. European Commission President Ursula von der Leyen “made a commitment to the prime minister that the EU wouldn’t block companies from fulfilling their contractual obligations to supply vaccinations,” Helen Whately, a junior U.K. health minister, told Sky News on Monday.
The U.K. is the biggest destination for Covid vaccine doses made in the EU, receiving more than 10 million of 42 million shots that have been exported from the bloc so far.
What will happen if the EU blocks shipments?
Any reduction in supply could undermine the U.K.’s progress toward giving everyone a first dose of vaccine by the end of July. For the EU, which has not yet ratified a post-Brexit trade agreement with the U.K., the price could be damage to global relations. “The commission knows deep down that this would be counterproductive,” U.K. Defense Secretary Ben Wallace told Sky News on Sunday.
A ban on exports of vaccines from the EU to the U.K. would delay Britain’s reaching a level of supplies needed to vaccinate 75% of its population by at least two months, according to London-based analytics firm Airfinity Ltd.
Could other vaccine producers be affected?
There could be knock-on effects. Pfizer Inc. (NYSE:PFE) has warned that it needs free movement of materials between the U.K. and EU in order to make the messenger RNA vaccine it produces with Germany’s BioNTech SE (NASDAQ:BNTX). The company relies on a secret U.K. production site to make lipids, the fatty material used to encase and protect mRNA so it won’t break down when put into the body. Little used before the advent of mRNA vaccines last year, the lipids are now in short supply around the world.
A spat that disrupts supply chains and slows vaccine production could have repercussions beyond Europe. Many developing nations are counting on the Astra shot, which is lower cost and easier to transport than those of Pfizer-BioNTech and Moderna (NASDAQ:MRNA) Inc.
Meantime, results of a U.S. trial released Monday indicate the Astra vaccine is safe and highly effective. That could put to rest lingering concerns about efficacy and potential side effects that have slowed uptake in the EU and elsewhere.
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