Transatlantic Trade Update text overlaid on top of images of US, UK and EU flagsThe United States (US) focused this week on countering the fast-spreading Delta COVID-19 variant, with the Federal Government calling for a reinstatement of mask-wearing, irrespective of one’s vaccination status.  While the second quarter report for the US economy showed some positive momentum, inflation continues to rise, with some attributing this to global supply chain issues.  Meanwhile, the US Senate started moving forward with consideration of a bipartisan infrastructure package, after weeks of negotiations resulted in a breakthrough on Wednesday.

The United Kingdom (UK) moved forward with resuming international travel with those vaccinated against COVID-19 from the US and European Union (EU).  It also began shipping COVID-19 vaccines overseas.

This week, the EU publicly released two non-papers it had previously shared with the UK Government in an effort to find a path forward on resolving the Northern Ireland Protocol dispute.  The UK Government also shared a command paper on the matter.

In this issue, we also cover:

  • COVID-19 highlights among the transatlantic partners;
  • Notable UK, and US developments; and
  • UK-EU trade deal

COVID-19 Highlights | US, UK

Despite previously saying boosters are not needed, Dr. Anthony Fauci, White House Chief Medical Advisor, stated on Sunday that Americans who are immune-compromised (e.g., transplant patients, cancer chemotherapy, and autoimmune diseases that are on immunosuppressant regimens) may end up needing COVID-19 vaccine booster shots, amid the Delta variant surge.  Meanwhile, Pfizer/BioNTech reported last Friday that the United States had purchased 200 million more doses of their vaccine to help with pediatric vaccination, as well as possible booster shots.

On Tuesday, 27 July, the US Centers for Disease Control and Prevention (CDC) recommended vaccinated Americans should resume wearing masks indoors in areas of high COVID-19 transmission.  The CDC also recommended indoor masking for all teachers, staff, students and visitors inside schools from kindergarten to 12th grade, regardless of vaccination status.  US President Joe Biden announced on Thursday, 29 July, additional steps to get more Americans vaccinated.  US federal government employees and onsite contractors will be asked to attest to their vaccination status.  Those not fully vaccinated will be required to wear a mask on the job no matter their geographic location, physically distance from all other employees and visitors, comply with a weekly or twice weekly screening testing requirement, and be subject to restrictions on official travel.  Among other things, he also directed the US Department of Defense to look into how and when they will add COVID-19 vaccination to the list of required vaccinations for members of the military domestically and overseas.

Amid increased pressure from the US travel industry and allies, the White House indicated on Monday that the United States will maintain existing travel restrictions for overseas travelers due to the global Delta variant surge.  Reuters reported last week that the White House was discussing the potential of mandating COVID-19 vaccines for international visitors, but no decision has been made.

In the United Kingdom, the Government decided on Wednesday, 28 July, to make it easier for people fully vaccinated in Europe or the United States to travel to England, effective 2 August.  Further details are accessible here on the decision intended to reopen international travel.

Also on Wednesday, British Foreign Secretary Dominic Raab announced the UK began delivering nine million COVID-19 vaccines around the world this week, including to the Philippines.  Five million were delivered to COVAX for dissemination to lower-income countries, with an additional four million shared directly with countries in need.

Notable UK Development

This week, Foreign Secretary Raab and Home Secretary Priti Patel signed a new maritime security treaty between the UK and France.  The treaty will allow the two countries to share security information concerning potential security threats, mount swifter and stronger initial responses to serious security incidents, coordinate joint responses, and cooperate in the aftermath of an attack or incident.

Notable US Developments

On Thursday, 29 July, the US Department of Commerce Department released a report that estimated the national’s gross domestic product rate was 6.4 percent for the second quarter of 2021.  While this was lower than the eight percent rate that many economists had predicted, the miss was attributed to global supply chain challenges.  A 3.4 percent increase was also noted for core inflation, which excludes food and energy.  The day before, the US Federal Reserve affirmed it would maintain its key short-term interest rate at near zero to keep short-term borrowing costs low.  Federal Reserve Chairman Jerome Powell said at a press briefing Wednesday afternoon that inflation readings have been distorted by temporary supply shortages related to the economy’s swift reopening.  Meanwhile, it remains to be seen whether the spreading Delta variant will make American consumers restrict their movements and possibly spend less in the third quarter.

On Wednesday, 28 July, the bipartisan group of US Senators negotiating the $1.2 trillion infrastructure framework announced a deal had been reached.  In a procedural vote later that evening, the Senate agreed to move forward with floor debate on the infrastructure deal, despite bill text still pending.  Meanwhile, several steps remain before the bill can advance out of the Senate, including floor debate on amendments and the 60-vote hurdle to close debate.

On Monday, 22 July, a bipartisan House Armed Services Committee task force released their final report, findings, and recommendations, following a months-long review of supply chain threats and vulnerabilities for the Department of Defense (DOD).  Among other recommendations, the Task Force suggested a statutory requirement to identify supplies and materials for major end items that come from adversarial nations and implement a plan to reduce reliance on those nations.  They also recommended authorities be updated to emphasize the value of a broad collaboration with the National Technology and Industrial Base (NTIB) allies beyond acquisition, to strengthen the alliance; direct the NTIB Council to identify particular policies and regulations that could be expanded to the NTIB allies, in order to use the NTIB as a test bed for closer international cooperation and supply chain resiliency; and authorize an NTIB “International Council” to harmonize industrial base and supply chain security policies. The Task Force also encouraged the Pentagon to prioritize supply chain security policy in bilateral and multilateral discussions.

UK-EU Trade Deal Updates

On 26 July, the European Commission publicly released two non-papers that detail different proposals already made to the UK with regard to easing trade between Northern Ireland and the rest of the United Kingdom.  Non-papers are informal documents, without explicit attribution, put forward in closed negotiations in order to seek consensus on some contentious or procedural issue.  The first non-paper include proposals in the field of medicine.  It states that regulatory compliance functions (e.g. quality control tests) may be exceptionally located in Great Britain in respect of medicines covered by UK national authorities that will be distributed in Northern Ireland, following certain conditions.  In addition, the Commission asks for an enhanced enforcement by UK competent authorities to ensure that relevant medicine is only distributed to Northern Ireland and not further in the EU Internal Market.

The second non-paper includes measures to ease the movement of assistance dogs for disabled people and movement of livestock from Great Britain to Northern Ireland.  It also clarifies the rules on food safety checks.  It also notes the rules apply to EU-origin animal products that are exported to Great Britain for storage before being moved to Northern Ireland.  It states that a draft measure amends EU rules to allow re-entry into the EU of products of EU origin that are packaged and stored under the control of the competent authority of a third country.

The UK received both non-papers months ago.  Following the public release of the papers, the UK Government spokesperson stated these papers did not address the issues and concerns raised by the UK.  In addition, the spokesperson call for the need of “comprehensive and durable solutions to avoid further disruption to every day lives in Northern Ireland”.  The United Kingdom has recently set their own solutions and concerns in the command paper titled, “Northern Ireland Protocol: the way forward”.

As previously reported, the Protocol on Northern Ireland, which was agreed as part of the Brexit deal, seeks to avoid enforcement of the EU single market rules in the border between Northern Ireland and the Republic of Ireland, leaving the first one inside the EU’s custom union and single market for goods.  Nevertheless, the Protocol imposes checks on goods moving between Northern Ireland and the rest of the United Kingdom, in order to protect the EU market from goods that may not be compliant with EU rules.

On 28 July, a Commission spokesperson stated the EU has agreed to a standstill in legal action against the UK for breaches of Northern Ireland Protocol.  The spokesperson added the European Commission would remain open to suggestions made in the British command paper.  Nevertheless, the Commission will assess the new proposal “in accordance with the necessary consultation procedures, both internally, and with the European Parliament”.