11 Feb 2021

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A Friend in Need is a Friend Indeed – European Union Provides Verbal Assurances to Canada Against its Vaccine Export Controls

Canada’s doses of COVID-19 vaccines from Pfizer-BioNTech and Moderna are made in and shipped from Europe. With AstraZeneca being unable to fill Europe’s contract for its vaccine in the first three months of the year, the European Union (EU) issued its temporary Transparency and Authorization Mechanism on 29 January 2021. One of the key highlights of the mechanism is the export authorization scheme that provides for authorizations of exports outside the EU of COVID-19 vaccines until the end of March 2021. As such, the vaccine exports will be subject to an early notification and authorization before they are effectively shipped outside the EU.

Recently, the President of the European Commission (EC) provided assurances to the Canadian Prime Minister that the proposed European Union vaccine export transparency mechanism is not intended to disrupt exports of vaccines to Canada. On Monday, the Canadian Minister of International Trade, Mary Ng, said she and the Prime Minister had received several verbal assurances from European officials that Canada’s vaccine orders would not be affected by the controls. While Canada is not on the list of countries exempted from the controls under the Transparency and Authorization Mechanism, the European Commission’s declaration states:

           The Commission is mindful of APAs [Advanced Purchase Agreement] contracted by third countries, and will endeavour to ensure that the expectations of these countries to obtain their deliveries will be met.

Although the measure states that the export authorization mechanism is not an export ban, concerns were raised in Canada that Canada’s Advanced Purchase Agreements may not be honoured. However, the Canadian Prime Minister assured that should the EU go forward with the controls, he had ‘strong assurances’ from EU leadership that Canada would not be impacted. A news source reported that the Assistant Deputy Minister for trade policy and negotiations at Global Affairs Canada, Steve Verheul told the House of Commons Trade Committee that Canada’s first goal is to ensure Europe lives up to its promise. Without any further elaboration he added, “We’re waiting to see if the EU process is going to pose any interruptions or not,” said Verheul. He went on to state “But we’re certainly prepared that if this process does start to create problems, we will have steps we can take in light of that.” Currently, with no domestic COVID-19 vaccine production, the Canadian government has signed a “memorandum of understanding” with Novavax to produce its COVID-19 vaccine in Canada. However, it is not expected to roll out production until fall.

The EU has invested a total of €2.7 billion to produce several vaccines against COVID-19. While the EU claims that its measures are in line with all its international obligations under WTO and G20 commitments, Canada does not have many mechanisms to challenge the new controls under the Comprehensive Economic and Trade Agreement (CETA), Canada’s free trade agreement with the European Union.

Tereposky & DeRose regularly provides advice on Canadian trade matters, including safeguard actions and export control. Should you have any questions regarding this matter, we would be pleased to speak with you.

Vince DeRose
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Umair Azam
613.237.1208
uazam@tradeisds.com