Transatlantic Trade Update text overlaid on top of images of US, UK and EU flagsOfficials from the United States (US) reached out to European officials this week, discussing mutual concerns and priorities.  The European Union (EU) continues struggle with resolving its vaccine distribution challenges, extending its vaccine export restrictions until June.  This week, the US and European partners jointly imposed sanctions against officials from the People’s Republic of China (“PRC” or “China”) perceived to be responsible for human rights violations in the PRC’s Xinjiang Uyghur Autonomous Region.  The United Kingdom (UK) and US also focused on Myanmar/Burma, imposing new sanctions against the military regime.

In this issue, we also cover:

  • COVID-19 developments more broadly, with respect to the EU, UK, US;
  • An update related to the EU COVID-19 vaccine export control mechanism;
  • Notable UK, EU and US developments;
  • A UK-EU trade deal developments; and
  • Sanctions developments with respect to the PRC and Burma/Myanmar.

COVID-19 Updates | EU, UK, US

Due to a resurgence of COVID-19 infection rates in Europe, several European countries have imposed new restrictions, including France and Belgium, while Germany withdrew its plans for stricter measures, ahead of the Easter holiday.   Regarding vaccine distribution issues, European Commission President Ursula von der Leyen made statements calling for vaccine reciprocity and calling for AstraZeneca in particular to fulfill its contractual obligations to the EU.  In the aftermath of heightened tensions and various statements surrounding reciprocity, on 24 March 2021, a joint EU-UK statement was published noting, [G]iven our interdependencies, we are working on specific steps we can take – in the short-, medium – and long term – to create a win-win situation and expand vaccine supply for all our citizens.

Meanwhile, at the instruction of the European Commission, an inspection was carried out at an Italian site where 29 million doses of the AstraZeneca vaccine were discovered, which were later explained to be destined for EU countries, among others.  Toward increasing its vaccination production rate, AstraZeneca has requested the European Medicines Agency (EMA) authorize use of a Dutch production site to increase manufacturing capacity of its COVID-19 vaccine.  Regarding other vaccines in the pipeline, the EMA continues its rolling review of Curevac, Novavax and Sputnik V.  On the latter, the EMA announced it is planning to launch inspections of manufacturing and clinical sites in Russia to ensure there is consistency for the production of the vaccine.

Appearing before a committee of senior lawmakers, UK Prime Minister Boris Johnson suggested on Wednesday that publicans and landlords may be able to require citizens have a vaccine certification prior to entry.  Cabinet Office Minister Michael Gove has been tasked with reviewing the role vaccine certification can have in re-opening hospitality venues, while examining complex ethical issues.

In the United States, President Joe Biden said at his first formal press conference that his Administration is now targeting administering 200 million doses of COVID-19 vaccines to Americans within the first 100 days of his Administration.  This week, AstraZeneca updated the efficacy result of its Phase III coronavirus vaccine trial in the US.  The company adjusted the efficacy rate of its vaccine from 79% to 76%.  The company intends to seek Emergency Use Authorization from the US Food and Drug Administration in the coming weeks.

Update | EU COVID-19 Vaccine Export Control Mechanism

World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala expressed disappointed over the EU’s vaccine export restrictions and its decision to extend these restrictions to June.  A few days later, on 24 March, the European Commission introduced new criteria of reciprocity and transparency for the export control mechanism.  The objective is to ensure access to vaccines for European citizens.  According to European Commission President von der Leyen, “The EU is proud to be the home of vaccine producers who not only deliver to EU citizens but export across the globe. While our Member States are facing the third wave of the pandemic and not every company is delivering on its contract, the EU is the only major OECD producer that continues to export vaccines at large scale to dozens of countries.”  The EU intends to build reciprocity by collaborating with other countries granting Europe a supply of vaccines.

Notable US Developments

On Thursday, 25 March, US President Biden participated virtually in a scheduled summit of the European Council that was chaired by European Council President Charles Michel.  A White House readout reflected President Biden “conveyed a strong EU is in the U.S. interest, noting . . . shared democratic values and the world’s largest trade and investment partnership.”  Apart from addressing mutual concerns with respect to combatting COVID-19, adding climate change and promoting democracies rather than autocracies, President Biden expressed a desire to work on shared foreign policy interests, citing the PRC and Russia in particular.  He also “noted the need for continued US-EU engagement on Turkey, the South Caucasus, Eastern Europe, and the Western Balkans.”  Introductory remarks by European Council President Michel emphasized the need to work together on COVID-19 vaccines to “boost production and delivery, and ensure open supply chains” and to “lead efforts” through the COVAX Facility so that “vaccines reach all countries”.

US Secretary of State Antony Blinken visited Europe this week, attending the North Atlantic Treaty Organization (NATO) Foreign Ministerial in Brussels, Belgium.  He also met with NATO Secretary General Jens Stoltenberg, Allied Foreign Ministers (France, Germany, UK), European Commission President von der Leyen, EU High Representative for Foreign Affairs and Security Policy Josep Borrell, and Belgian Deputy Prime Minister and Minister for Foreign Affairs Sophie Wilmès, among other officials.  In a speech at NATO’s headquarter, Secretary Blinken spoke of reaffirming and reimaging America’s alliances.  He outlined urgent threats facing the Alliance, describing three categories:  (1) military threats from other countries, noting China, Russia, Iran and North Korea as countries of concern; (2) non-military threats from many of these same countries, citing technological, economic, and informational tactics deployed that threaten security; and (3) global crises like climate change and the COVID-19 pandemic.

Global terrorism, Secretary Blinken said, cuts across these categories.  To confront these challenges, he urged NATO partners to (1) recommit to alliances that affirm shared values; (2) modernize the Alliance to improve military capabilities and readiness; broaden capabilities to address threats in the economic, technological, and informational realms; and address transnational threats (e.g., climate change); and (3) ensure broader coalitions of allies and partners.  With respect to the last point, he cited as an example, “Consider 5G, where China’s technology brings serious surveillance risks. We should bring together tech companies from countries like Sweden, Finland, South Korea, the United States, and use public and private investment to foster a secure and trustworthy alternative.”  He added, “The United States won’t force our allies into a ‘us or them’ choice with China.”

US Trade Representative Katherine Tai spoke with a number of European officials this week.  On 22 March, Ambassador Tai and UK Secretary of State for International Trade Liz Truss met virtually.  According to a UK Department of International Trade readout, “They agreed to work constructively to address unfair trade practices of non-market economies, such as China.  They both reflected on the progress made in UK-US Free Trade Agreement negotiationsand the importance of continuing to work together to build a closer economic relationship, and agreed to have further discussions.”  A readout from the Office of the US Trade Representative (USTR) reflected, “They also agreed to partner on key issues, including ending the COVID-19 pandemic, resolving the large civil aircraft subsidies dispute, WTO reform, climate change, forced labor and support for a worker-centered trade policy.”  Ambassador Tai and Secretary Truss are expected to continue discussions at the G7 Trade Ministerial in March.

Ambassador Tai also met virtually with European Commission Executive Vice President Valdis Dombrovskis on Monday.  A USTR summary noted, “They committed to strengthening U.S.-E.U. cooperation on shared objectives, including trade policy support to address climate change, forced labor and issues related to large non-market economies, such as China.”  Both also discussed resolving the large civil aircraft subsidies dispute addressing global steel and aluminum overcapacity.

On Tuesday, 23 March, Ambassador Tai spoke with French Minister of Economy, Finance, and Recovery Bruno Le Maire.  She spoke with German Federal Minister for Economics and Energy Peter Altmaier on Wednesday, 24 March.  Topics discussed mirrored those noted in the meetings above.

On Thursday, 25 March, the US and UK completed an exchange of diplomatic notes that brings into force the Air Transport Agreement (“the Agreement”) between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland.  The Agreement was signed in November 2020; entry into force of the Agreement cements it as the sole basis of US-UK air transport relations, meeting all the criteria of the US Open-Skies policy and providing for new, additional traffic rights for US all-cargo operations to and from the United Kingdom.

Notable UK Developments

The UK Government announced it would contribute €500k to the “International Accountability Platform” (“the Platform”), which will collect and store evidence of human rights violations and torture that may be used in future independent criminal proceedings.  The Platform is a joint initiative led by a coalition of expert NGOs and supported by the UK, Denmark, Germany and other international partners to hold Lukashenko’s regime to account for systematic human rights violations.

On Monday, 22 March, 10 Downing Street announced the State Opening of Parliament will take place on Tuesday, 11 May.  The Queen’s Speech will set out the Government’s agenda for the next session.

Notable EU Developments

Apart from COVID-19 vaccine distribution efforts, the EU27 Heads of State and Government’s statement underscored the need to “enhance Europe’s digital sovereignty in a self-determined and open manner by building on its strengths and reducing its weaknesses and through smart and selective action, preserving open markets and global cooperation”.  Discussions were also held around the Eastern Mediterranean situation and EU relations with Turkey.  The statement confirms the intent to “intensify talks with Turkey to address current difficulties in the implementation of the Custom Union”, provided that the “current de-escalation in the Eastern Mediterranean” is “sustained and that Turkey engages constructively” with the EU.  The statement also calls on Turkey to “abstain from renewed provocations or unilateral actions in breach of international law”.  Finally, a strategic debate around EU-Russia relations is expected to be held at the next European Council meeting, scheduled for 24-25 June. 

European Commission President von der Leyen published a statement following the visit of the US Secretary Blinken, stating the two shared the same ambition “to tackle the coronavirus pandemic and to deal with its consequences on the economy, on people”.  President von der Leyen stressed the need to work together “on strengthening the global supply chains for vaccines” and to join forces on reforming the multilateral trading system (WTO) and climate change.

On 25 March, EU Commissioner for Justice Didier Reynders and US Secretary of Commerce Gina Raimondo issued a joint statement affirming their commitment to intensify negotiations on an enhanced EU-US Privacy Shield that addresses transatlantic data flows.  They underscored, Our partnership on facilitating trusted data flows will support economic recovery after the global pandemic, to the benefit of citizens and businesses on both sides of the Atlantic”.

The European Commission launched a public consultation on 23 March related to the EU anti-coercion instrument by non-EU countries, with comments accepted until 15 June 2021.  The survey-based consultation lists a number of questions regarding non-EU country practices that may be perceived as coercive ones.  It seeks evidence of non-EU country legislation that is either specifically designed to impose coercive measures on other countries or that can be used for that purpose.  Some questions also focus around the experience of either public or economic operators, asking them to describe any direct or indirect effects from coercive actions.

UK-EU Trade Deal | Updates

The House of Commons European Union Committee highlighted late last week that the threat of no-deal with the UK loomed, as long as the European Parliament had not set a date to ratify the deal.  European Parliament President David Sassoli announced ratification of the EU-UK Trade and Cooperation Agreement is now expected to take place during the plenary session set for the week of 26 April.  President Sassoli said that the ratification must be done regardless of the UK’s actions and stressed “even we struggle to understand some of the behavior on the other side of the Channel,” but it will be important to have “a serene development of the agreements that have been sealed”.

Sanction Updates | the PRC and Burma/Myanmar

              Mainland China

On Monday, 22 March, the US Government, in coordination with Canada, Britain, and the European Union, announced Global Magnitsky sanctions against two individuals alleged to be involved with the mistreatment of Muslims in the PRC’s Uyghur Xinjiang Autonomous Region.  Office of Foreign Assets Control (OFAC) Director Andrea Gacki said of the designations, “Treasury is committed to promoting accountability for the Chinese government’s human rights abuses, including arbitrary detention and torture, against Uyghurs and other ethnic minorities”.

Also on 22 March, the PRC Foreign Ministry spokesperson announced sanctions against ten individuals and four entities. The sanctions include public officials from different EU member states; they consist of a travel ban and the prohibition of doing business in the PRC (including Macao SAR and Hong Kong SAR).  This response is perceived as a retaliatory measure against the sanctions imposed by the European Union against eleven individuals and four entities for human rights violations around the world.  The EU sanctions included individuals/entities that the EU asserts are tied to “large-scale arbitrary detentions of, in particular, Uyghurs in Xinjiang in China, repression in the Democratic People’s Republic of Korea, extrajudicial killings and enforced disappearances in Libya, torture and repression against LGBTI persons and political opponents in Chechnya in Russia, and torture, extrajudicial, summary or arbitrary executions and killings in South Sudan and Eritrea.”

The PRC Government’s retaliatory sanctions could endanger the passage by the European Parliament of the Comprehensive Agreement on Investments (CAI) negotiated between the PRC and the European Union.  Some European parliamentarians have suggested not ratifying the deal.  Other members of the European Parliament insist the CAI is not related to the sanctions that come from “the effect of a broader asymmetry in the perception of human rights and governance in China”.


Also on 22 March, the US Treasury Department added two individuals to designations related to the ongoing military coup situation in the country of Burma.  OFAC Director Gacki said of the action, “The Burmese security forces’ lethal violence against peaceful protesters must end.  Treasury will continue to use the full range of our authorities to promote accountability for the actions of the Burmese military and police. We continue to stand with the people of Burma”.

On 22 March, the Council of the EU imposed sanctions against eleven individuals belonging to the highest ranks of the Myanmar Armed Forces.  Restrictive measures include travel bans and asset freezes.

On 25 March, the UK Government, in coordination with the US Government, announced sanctions targeting military-owned conglomerate Myanmar Economic Holdings Ltd. (MEHL) for its alleged involvement in serious human rights violations against the Rohingya and its association with senior military figures.  The US Government also imposed sanctions against Myanmar Economic Corporation Limited (MEC).

Frank SamolisMatthew Kirk and Wolfgang Maschek contributed insights to this report.