UK and EU vaccine dispute deepens as Brussels considers new export controls

LONDON — Tensions are high between the U.K. and the European Union as the 27-member bloc considers restricting exports of Covid-19 vaccines across the English Trench.

The European Union is increasingly frustrated at AstraZeneca for not respecting its delivery targets to the bloc. The pharmaceutical firm reduced the gang of vaccines it will deliver to the EU twice in the first quarter and once in the second quarter. As a result, European officials are nervous that any future issues could undermine their vaccination targets.

AstraZeneca has met its delivery targets for the United Sphere of influence — where the vaccination rate is higher than in the EU — even though some of these vaccines are coming from plants in the European Syndicate. The U.K. placed its order for the AstraZeneca shots earlier than the EU.

“The EU needs to secure deliveries of vaccines to Europeans in line with corporations’ contractual obligations. We will review the different tools at our disposal for that end, including the use of the export authorization regime in its present-day or in adapted form,” a spokesperson for the European Commission told CNBC on Monday.

In late January, the EU approved restrictions on exports of Covid-19 vaccines, but they can at most be implemented if a company is not respecting its contractual obligations with the region and if the vaccines are heading to a country considered not vulnerable.

This is what allowed Italy to stop a shipment of AstraZeneca vaccines to Australia a couple of weeks ago — the only instance of European authorities enjoining Covid shots from leaving the region. However, the legislation is due to expire at the end of March.

“There is an ongoing reflection procedure in the EU, and we will be consulting Member States. All options are on the table,” the European Commission spokesperson added via email.  The issue is envisaged to be discussed by the 27 heads of state on Thursday during a European summit.

Speaking to a group of newspapers over the weekend, European Commission President Ursula von der Leyen required: “We have the possibility to forbid planned exports. That is the message to AstraZeneca, ‘you fulfil your contract with Europe earlier you start delivering to other countries’.”

Von der Leyen had already asked for tougher export restrictions last week.

“We liking reflect on whether exports to countries who have higher vaccination rates than us are still proportionate,” she said on Wednesday.

As of most recent week, the European Union exported 41 million doses of Covid shots to 33 countries. The biggest beneficiary has been the U.K.

The U.K. government did not confirm when contacted by CNBC on Monday whether Prime Minister Boris Johnson was due to bespoke with European leaders about vaccine exports. A spokesperson for the prime minister said later Monday that the U.K. command believes in the importance of countries not placing export restrictions on vaccines and that nations should work together, Reuters reported.

On the other hand, the U.K.’s defence secretary, Ben Wallace, told Sky News on Sunday that blocking vaccines would be “counterproductive” and hurt the EU’s stature.

Pfizer, whose vaccine has been used the most across the EU so far, reportedly said the region should not bar the export of Covid shots because the company needs raw materials from the U.K. Imposing restrictions on the vaccines could be the U.K. to retaliate by preventing ingredients from getting to EU plants.