The 2020 global pandemic highlighted the cracks in the supply chains that keep us fed, clothed, in health, and entertained. In 2021, our hopes for getting back to a post-pandemic life depend on the effective global distribution of the newly manufactured vaccines. Are our supply chains up to it?
This process begins with sourcing and delivering the components needed to make the vaccines in adequate quantities over an extended period. The most promising COVID vaccines (as of November, 2020) will have to be administered in two doses, several days apart. Some, including the Pfizer vaccine, already being distributed, will have to be stored in sub-zero temperatures. And while these vaccines are being manufactured in Europe, the United States, and China, stopping the pandemic means administering effective vaccines to a significant portion of the world’s population. This task of inoculating the world against covid-19 will be the primary challenge of global supply chains in 2021.
There is also concern among developing countries that the intellectual property rights of the vaccine developers could make the product too expensive for widespread distribution to poorer countries. This concern has prompted calls for the use of the WTO’s much-debated compulsory licensing regime.
US Biden Administration Trade Policy – Not Obama 2.0
The Biden Administration will inherit a number of serious challenges from the outgoing Trump Administration. This fact alone highlights the ways in which the trade policy of a President Biden must differ from that of his former boss, President Obama. The incoming Administration will have to unravel, among other things, the tangled web woven by the Trump Administration’s indiscriminate use of tariffs on dubious national security claims against friend and foe alike. In 2011 and even in 2016, the refusal of the Obama Administration to reappoint members to the Appellate Body of the World Trade Organization (WTO) “merely” signaled US displeasure; in 2020 the Trump Administration has allowed the primary mechanism to address trade disputes to become non-operational and urgently in need of resuscitation. The Trump China tariffs imposed in violation of WTO rules, along with the Administration’s rhetoric on China as an existential threat to the US, complicates the task of forging a productive policy and working relationship with the world’s other economic superpower and the source of the majority of US imports.
Since the publication of our recent post exploring what to expect on trade from a Biden Administration, more clues have emerged about the thinking of President-elect Biden. He has expressed his intention to focus on domestic policy to rebuild the US economy and increase US competitiveness before taking actions on trade. This statement could certainly hold true with regards to the return to the traditional components of US trade policy. For example, it makes sense not to expect that the incoming Administration will prioritize completion of the trade negotiations underway with the United Kingdom and Kenya, or initiation of new trade deals.
That said, it is difficult to imagine the Biden Administration being able to avoid dealing with the pressing issues outlined above. The selection of Katherine Tai to serve as US Trade Representative (USTR), heading the agency that provides trade policy leadership and serves as the chief US negotiating arm, underscores this. While Ms. Tai’s current role as chief trade counsel for the House of Ways and Means Committee which oversees trade will be important, the selection of a Mandarin-speaking Chinese-American who previously headed China trade enforcement at the USTR signals the importance the incoming Administration intends to give to its China policy.
World Trade Organization (WTO) in 2021
The WTO will begin the new year limping and leaderless. With the Trump Administration refusing to recognize the top contender, Ngozi Okonjo-Iweala of Nigeria as its next Director-General, the selection process has been halted. This step was almost certainly taken with the hopes that the incoming Biden Administration will adopt a more reasonable position and resolve the impasse. Worth celebrating is the fact that the top two contenders for the post are women. When one considers the unparalleled accomplishments of women leaders in the fight against Covid-19, there is no doubt that the organization will be in good hands. For now, however, the organization remains without a leader. It also remains without a fully-functioning dispute settlement system, another issue that will require the attention of the incoming Biden Administration, as noted above.
Post-Brexit EU-UK Trade Relations
Brexit has already happened. The United Kingdom has left the European Union. Up until December 31, 2020, however, EU-UK trade continues within the rules of the EU single market as if the UK is still an EU member. This transition period was intended to allow the two parties to negotiate a post-Brexit trade agreement that will shape their trade relations. It has been tough going.
Reports are that a deal is about three-quarters negotiated. However, they remain stuck on the other quarter – the issue of how Britain understands its sovereignty with regards to its land and sea borders, competition policy, and the mechanism for enforcing the terms of an agreement. The parties are involved in a make or break effort to reach agreement in time for it to be ratified by their parliaments before December 31, 2020. Neither side seems amenable to an extension.
They may yet reach a deal. There is huge incentive on both sides to do so. On January 1, 2021, the border between the EU and the UK will return. The negotiations are aimed at reducing the barriers that goods and services traversing the border will have to face. Failure will re-establish customs duties on a broad range of goods, added paperwork, and delays that will be disruptive and costly to both sides.
These are among the international trade stories we will be following in 2021. Contact us to learn more and to discuss how we can support you effectively in 2021. DevelopTradeLaw LLC in Washington DC provides customs and trade law consulting services. Andrea M. Ewart, Esq. is a seasoned international trade and customs attorney and policy adviser for various companies and governments with a demonstrated history of successfully developing and implementing sustainable and dynamic trade programs. She is experienced in creating partnerships with various business-support organizations to drive compliance and growth for international companies. The International Trade Attorney brings 17 years of consulting experience in understanding and teaching trade regulations to clients of/with varying backgrounds and expectations in preparation to be competitive in international business. Andrea also reviews and audits existing compliance programs to identify areas of improvement to fit the needs of the organization while meeting the challenges of operating globally.