We are resuming the report after a two-week hiatus – a time-period coinciding with the United States (US) Congress and European Union (EU) annual summer recess break – and recapping developments since 16 August in this report. The EU and US are preparing for the EU-US Trade and Tech Council meeting later this month, with the agenda still being finalized. This week, the United Kingdom (UK) welcomed Mexico opening its market to British pork.
The Biden Administration and NATO allies also focused the past few weeks on the military withdrawal from Afghanistan and evacuation of citizens and Afghan refugees from Kabul airport. Amid the situation in Afghanistan, a Category 4 Hurricane’s landfall in the Gulf US States, and the Delta COVID-19 variant surge, US President Joe Biden welcomed Ukraine’s President to the White House this week, reaffirming mutual concerns with Russian aggression. Meanwhile, transatlantic partners are considering whether COVID-19 vaccine boosters are necessary, amid the Delta surge and emergence of additional coronavirus variants of interest.
In this issue, we also cover:
- COVID-19 highlights among the transatlantic partners;
- Notable UK, US and EU developments; and
- A brief UK-EU trade deal update.
On 30 August, the Council of the EU reviewed the list of countries for which non-essential travel restrictions should be lifted. The recommendation, which remains non-legally binding and can be implemented at the discretion of Member States, imposed non-essential travel restrictions on persons from the United States, in an attempt to limit unvaccinated Americans visiting EU countries. Member States can decide to lift the restrictions for fully vaccinated travelers. The updated travel list reflected the lifting of restrictions on travelers from Israel, Kosovo, Montenegro and the Republic of North Macedonia. The US aviation sector criticized the Council’s decision to impose further non-essential travel restrictions on American visitors as a “step backwards”. The UK Government also revised its international travel lists, moving seven destinations to the green list and two countries to the red list.
While the Biden Administration indicated COVID-19 booster shots (“boosters”) would be available for all Americans starting 20 September, the US Food & Drug Administration (FDA) and Centers for Disease Control and Prevention (CDC) have been more reserved, pushing back against perceived political interference and indicating COVID-19 boosters should be for persons whose immune systems cannot defend against COVID-19 after two doses. The FDA announced a virtual meeting of its Vaccines and Related Biological Products Advisory Committee for 17 September to discuss the matter of additional doses of COVID-19 vaccines, specifically the Pfizer/BioNTech supplemental Biologics License Application for administration of a booster dose of Comirnaty in individuals 16 years of age and older. This week, Moderna initiated its submission to the FDA for the evaluation of a booster dose of its COVID-19 vaccine, providing data to the FDA that the booster dose at the 50 ug dose level induced “robust antibody responses against the Delta variant.” Pfizer/BioNTech submitted its initial data to the FDA last month.
The European Commission confirmed on 3 September the ongoing litigation over the vaccine supply chain between the EU and AstraZeneca had resulted in a settlement. As part of the agreement, AstraZeneca is to provide 60 million additional doses by the end of the third quarter of 2021, followed by 75 million by the end of the year, and 65 million doses by March 2022. Meanwhile, European Commission President Ursula von der Leyen announced on 31 August that the EU hit the target of vaccinating 70 percent of its adult population. Following the Commission’s statement, the European Centre for Disease Prevention and Control (ECDC) underlined, in a technical report published on 1 September, that “based on current evidence” there is “no urgent need” for coronavirus vaccine booster shots.
The UK Government announced on 1 September that it had accepted recommendations from the independent Joint Committee on Vaccination and Immunisation to offer a third vaccine dose to people aged 12 and over with severely weakened immune systems as part of their primary schedule, following data from trials of those who are immunosuppressed.
With reports reflecting the mRNA COVID-19 vaccines face waning vaccine efficacy and consequent calls for booster shots, some experts are examining US-based Novavax’s COVID-19 vaccine candidate NVX-CoV2373, especially since its late-stage clinical data has been overwhelmingly positive and has matched the safety and efficacy rates achieved by the approved FDA vaccines. Notably, NVX-CoV2373 has an adjuvanted subunit protein platform that allows for rapid generation of multi-valent vaccines, which experts believe may be useful in the fight against emerging COVID-19 variants. Novavax’s Emergency Use Authorization (EUA) filing has been pushed back repeatedly and is now anticipated in the fourth quarter of 2021. The previous Administration secured a contract with Novavax to purchase 110 million doses of its vaccine candidate; Novavax has confirmed it is on track to begin delivering these doses by the end of the year/early 2022.
Reuters reported on Wednesday that a national survey of 961 US employers reflected nearly half of them are planning to impose COVID-19 vaccine mandates in the workplace by year-end and almost a quarter considering vaccination as a condition for employment. Currently an estimated 21 percent of American employers have one or more vaccine mandate requirements. At least 12 US states currently have laws restricting COVID-19 mandates. As of Tuesday, the CDC reported about 62 percent of the US population has received at least one dose of a COVID-19 vaccine, and about 52 percent are inoculated against COVID-19.
Wednesday, 25 August, marked the end of the Biden Administration’s 90-day review into the origins of the coronavirus. In a statement issued on 27 August, President Biden noted,
Pandemics do not respect international borders, and we all must better understand how COVID-19 came to be in order to prevent further pandemics.”
The Office of the Director of National Intelligence released an unclassified version of the report on 30 August.
Meanwhile, the World Health Organization (WHO) is tracking a new coronavirus variant known as “Mu,” or B.1.621. First identified in January 2021 in Colombia, the WHO officially flagged it as a variant of interest on Monday, 30 August. The Mu variant appears to be more vaccine-resistant and is circulating predominantly in the Western Hemisphere, including the United States, and in Europe.
Notable UK Developments
This week, the UK Government welcomed Mexico officially opening its doors to British pork for the first time. The Agriculture and Horticulture Development Board estimates that access to the Mexican market will be worth £50 million to UK pork producers over the first five years of trade.
On 1 September, International Trade Secretary Liz Truss appointed two new HM Trade Commissioners (HMTCs) to help attract inward investment and assist British businesses with export opportunities throughout Europe and Central Asia. Chris Barton, previously Acting Director General of Trade Negotiations at the Department for International Trade, has been appointed as HMTC for Europe. Deputy HMTC for Europe, Kenan Poleo, was appointed HMTC for Eastern Europe and Central Asia Network (EECAN). On 23 August, Prime Minister Boris Johnson appointed ten Trade Envoys who will boost British business in dynamic markets such as Australia, Brazil and Canada. Further details on these appointments is available here.
On 2 September, Foreign Secretary Dominic Raab announced new sanctions against U Tay Za, a key business associate of the military junta in Myanmar, and Htoo Group of Companies.
Notable US Developments
Both chambers of the US Congress were in recess this week. House lawmakers are set to return the week of 20 September; Senators are set to return to Washington the week of 13 September. Upon Congress’ return from their August recess, lawmakers will have to address raising the debt ceiling to avert the US Government from defaulting and approve funding beyond 30 September to keep the US Government from shutting down, among other legislative priorities, which includes the bipartisan infrastructure bill, Democrats’ reconciliation spending package and likely another voting rights bill attempt.
On Friday, 3 September, the US Department of Labor released the August Jobs Report, reflecting the American economy added 235,000 jobs in August, while the unemployment rate fell from 5.4 percent to 5.2 percent. Notably, economists had expected 725,000 jobs to be added this month. This is the first jobs report to reflect the impact of the Delta COVID-19 variant surge on the US economy, and it showed a clear slowdown. The statistics demonstrate American workers are reluctant to return to the workplace amid the Delta surge; the US economic recovery will not get back on track until the Delta surge subsides. President Biden blamed the impact of the Delta variant on the jobs report; he underscored the importance of continuing to vaccinate Americans, while also arguing for Congress to pass the bipartisan infrastructure bill and Democrat’s $3.5 trillion spending package. This coming Monday, the United States celebrates the Labor Day holiday.
On 18 August, Senate Foreign Relations Committee Ranking Member Jim Risch (R-Idaho) and House Foreign Affairs Committee (HFAC) Ranking Member Michael McCaul (R-Texas) released a “myth vs. fact” sheet to highlight a number of the Biden Administration’s “discredited” talking points related to the Nord Stream 2 pipeline project. On 20 August, HFAC Ranking Member McCaul released a statement in response to the latest congressionally-mandated report from the State Department on entities engaging in sanctionable activity related to the Nord Stream 2 pipeline project from Russia to Germany. He stated,
By maintaining the harmful waivers on critical Nord Stream 2 sanctions and refusing to designate all of the entities involved in the pipeline project as is required by law, the Biden Administration continues to disregard the intent of congressionally mandated sanctions. Instead, the president has paved the way for this Russian malign influence project to become operational. More troubling still is the Administration’s complete disregard for the serious concerns of the countries who will suffer most from an operational Nord Stream 2, including Ukraine and Poland.”
On 20 August, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the US Department of State joined the United Kingdom in imposing additional sanctions on Russia, marking the one-year anniversary of the alleged poisoning of Russian opposition leader Aleksey Navalny. OFAC designated nine Russian individuals and two Russian entities allegedly involved in Navalny’s poisoning or Russia’s chemical weapons program.
Late on 20 August, President Biden signed a new Executive Order (E.O.) blocking property with respect to certain Russian energy export pipelines. The order responds to Russian energy pipeline projects intended to expand Russia’s influence over Europe’s energy resources that the US believes would weaken European energy security. It would also block the property and interests in property of foreign persons identified by the Secretary of State, in consultation with the Secretary of the Treasury, for engaging in certain activities or providing certain services to facilitate construction of the Nord Stream 2 pipeline project, among others. OFAC also announced new designations related to the E.O., available here.
President Biden welcomed Ukraine President Volodymyr Zelenskyy to the White House on 1 September reaffirming solidarity against Russian aggression. A joint statement reflected the US announced a new $60 million security assistance package, including additional Javelin anti-armor systems and other defensive lethal and non-lethal capabilities, to enable Ukraine to defend itself against Russian aggression. The two countries also finalized a Research, Development, Test, and Evaluation Agreement that provides a framework for pursuing bilateral armaments and military-technical cooperation; and a Memorandum of Understanding on commercial cooperation, designed to promote commercial participation by US companies across the Ukrainian economy and by Ukrainian companies across the American economy.
In an interview with Northwest Asian Weekly, published 19 August, US Trade Representative Katherine Tai confirmed her office has been engaging “robustly” with trading partners in Europe and in the Asia-Pacific region on a possible digital trade agreement. She also stated, “This space has implications for more than just our economic values but both our political and societal values.” Ambassador Tai also acknowledged trade will play a role in the US economy post-pandemic, saying of her approach to developing trade policy:
One is that we stay very well coordinated with other parts of the economic policy apparatus as we develop our trade policies to ensure that we are aligned.”
Notable EU Developments
With the end of the summer recess, EU policy debates will gradually resume next week. The EU-US Trade and Tech Council is expected to dominate future trade policy discussions, in anticipation of the inaugural meeting on 29 September. While the agenda is still being developed, it appears that issues linked to the coordination of supply chains, particularly with respect to semiconductor manufacturing, and investment screening are two of the main themes of discussions, along with a possible agreement on transatlantic data flows.
Media reports indicate that with the current ratification limbo of the EU-China investment deal, China has been actively pursuing new trade agreements such as bilateral deals with Norway and Israel, speeding up the trade talks with Japan and South Korea, as well as advocating for the possibility of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
UK-EU Trade Deal Updates
The EU and the UK are still working to find solutions to address the implementation of the Northern Ireland Protocol, particularly since post-Brexit checks continue to cause trade disruptions between Northern Ireland and the rest of Britain. Following the end June agreement to extend the post-Brexit grace period for meat checks, further technical discussions were inconclusive in July. The next round of technical discussions is scheduled for 1 October. The likelihood of the EU agreeing to another extension seems realistic at this point, as previous technical discussions did not yield workable solutions. While the UK shares the belief that amending sections of the Northern Ireland Protocol would be the ideal scenario – recently gaining more ground in the UK political sphere – EU Member States are currently opposed to the scenario of reopening the negotiations.
Meanwhile, the UK Government confirmed on 24 August that manufacturers would be allowed to continue using the European quality mark certification (CE) for another year (i.e. until 1 January 2023) to give companies time to adjust to the new ‘UK Conformity Assessed’ safety and quality mark for their goods. UK manufacturers broadly welcomed the extension, as a vital step to ensure continuity of products circulating within the British supply chain, as many companies are still not ready to adjust to the new certification system.