Was US President Joe Biden’s decision to lift the export embargo on raw materials for India’s Covid-19 vaccines dictated by geopolitical calculations or domestic technological/industrial compulsions or both?
While Biden’s so-called U-turn on the issue seems to be dictated by a combination of factors, China and analysts of “left” proclivity are inclined to stress on White House’s geopolitical gain by getting India “cheap” into the American alliance in “Indo-Pacific”, a term Beijing is not willing to accept and use.
The first of several emergency COVID-19 relief shipments from the United States has arrived in India! Building on over 70 years of cooperation, the United States stands with India as we fight the COVID-19 pandemic together. #USIndiaDosti pic.twitter.com/OpHn8ZMXrJ
— U.S. Embassy India (@USAndIndia) April 30, 2021
Statements from officials in Beijing and posts in its state news services have highlighted how the delay by the Biden administration in addressing the public health crisis in India and then making “a self-serving U-turn” exposed the American selfishness, coming as it did “too late” as “the US government had been heavily criticized for being selfish and hypocritical by offering too little aid to India in the past few days.”
Chinese Media Slams US
According to a prominent Chinese media outlet, the latest US effort “displays how this so-called political alliance failed to address India’s major concerns.”
However, more important from the Chinese point of view, if the Chinese daily is to be taken into account, is that “While the US offering assistance has been hailed by some Indian people, Chinese experts considered such a sudden change in attitude ‘was not surprising at all,’ as the Biden administration has been facing a backlash lately”.
“In addition, some experts also pointed out that the US is taking advantage of India’s humanitarian crisis – as Washington wants to use minimum resources to push India to come closer to the US…..It’s not surprising to see the US adopting such old-fashioned tactics of paying little attention to other countries’ crises first but suddenly appearing to be ‘willing’ to offer urgent help…..Promises and help come at the last-minute from the US as it would help it gain more from the partner with less offering.”
Right now, a @usairforce C-5M Super Galaxy and a C-17 Globemaster III are en route to India from @Travis60AMW. They’re carrying oxygen cylinders/regulators, rapid diagnostic kits, N95 masks, and pulse oximeters. Thanks to @USAID for the supplies & to all involved in the effort. pic.twitter.com/awtUFrT30D
— Secretary of Defense Lloyd J. Austin III (@SecDef) April 29, 2021
The Chinese analysts and officials explain “the American hypocrisy” in terms of the fact that Biden imposed curbs on the US raw material for vaccines to be made in India, though in the virtual “QUAD summit” on March 13 (the very first multilateral meeting that Biden as President held with leaders of India, Japan, and Australia), it was announced that the four countries would cooperate to deliver one billion vaccine doses in the Indo-Pacific.
Their agreement was supposed “to bring together Indian manufacturing and US, Japanese, and Australian financing, logistics, and technical assistance to help immunize hundreds of millions of people by the end of 2022”.
Just as India came to our aid early in the pandemic, the U.S. is committed to working urgently to provide assistance to India in its time of need. Today we are proud to deliver our first shipment of critical oxygen equipment, therapeutics and raw materials for vaccine production. pic.twitter.com/fAY2mHQLDi
— Secretary Antony Blinken (@SecBlinken) April 29, 2021
China considers the QUAD as a hostile alliance and it seemed to have a point that the QUAD agreement on vaccines aimed directly countering China’s lead in distributing vaccines to the region.
China Has Reasons To Get Upset
It may be noted that three Chinese vaccine makers (Sinopharm, Sinovac, and CanSino) had received by March overseas orders for more than 572 million doses, accounting for nearly eight percent of all doses under contract globally.
In Indonesia alone, Sinovac has a deal to supply 38 percent of the nearly 330 million doses.
In fact, in Southeast Asia, the heart of Indo-Pacific, China has committed 250 million doses, estimated to be 44 percent of the total doses it has committed worldwide.
In South Asia, India’s strategic backyard, China has already donated (as per an estimate made in March) 500,000 doses to Nepal, 300,000 doses to Sri Lanka, and 300,000 doses to Myanmar.
SinoVac chairman: Chinese vaccine makers have started manufacturing Covid vaccines in six BRI countries; Sinovac’s daily manufacturing capacity has reached 6m doses and will pick 10 more countries for tech transfer. pic.twitter.com/qlmGtv5GPw
— Yanzhong Huang (@YanzhongHuang) April 21, 2021
According to Yanzhong Huang (Senior Fellow for Global Health at the Council on Foreign Relations), the huge global demand for COVID-19 vaccines and “vaccine nationalism” in wealthy nations have created a great opportunity for China to break into a market that Indian and Western pharmaceutical firms have long dominated.
“If the vaccine were priced at $10 per dose with a 40 percent net profit margin, even a 15 percent share of the vaccine market in lower – and middle-income countries would generate total sales of $10.8 billion and a profit of $4.32 billion for the Chinese economy”, he argues.
Given this background, the Chinese point on the QUAD agreement on vaccines has strong merits. But, the Chinese interpretation that President Biden is a hypocrite as he imposed an export embargo on US raw material to India soon after the QUAD meet is devoid of facts.
Reading The Fine Print
In fact, it has been totally overlooked by the media that the QUAD summit took place on March 13, whereas Biden’ decision on export curbs was taken on February 5 under the Defence Production Act (DPA)— a law dating from the 1950s that grants the US President broad industrial-mobilization powers to bolster vaccine-making in the country.
Soon after assuming the presidency of a country that is still the number one victim of the Covid in terms of infection and death, Biden, it seems, fell to the charm of “America first” without realizing that the DPA is not conducive for the lasting growth of the American pharmaceutical as well.
Because, these companies also import a variety of special materials and equipment, including plastic tubing, raw goods, filters, and even paper, that are needed for vaccine production. And here, if you stop exporting your components, others will also stop exporting their material that you need.
Secondly, if the supply chain in the vaccine production is disturbed, then the American companies that will be required to produce vaccines at home will need various paper works and clearances from the authorities, and these bureaucratic requirements, as are the cases everywhere, will take time, which also will be needed to set up new infrastructures.
Can the US or any country afford this luxury of more time, which, in reality, is now at a prime, given the challenges of the Covid pandemic? It would harm the global production of vaccines overall, something that was warned the other day by Micheal Martin, Ireland’s Prime Minister.
In fact, the DPA, if not reconsidered, will harm many positive aspects of the global supply chain of vaccines. As Indian-American Vipin Garg, President and CEO of Altimmune, argued, it’s time US biotechnology companies focused their efforts on research and development of portfolios of intellectual property (resources and capabilities) without building manufacturing facilities, animal facilities (for trials), or clinical trial units.
The latter should be taken care of by companies such as in India and the American companies will easily avoid cumbersome infrastructures.
“Ultimately, this will ensure that important, innovative and new therapies are made available at affordable prices to patients all over the world,” he said.
Against this background, it is fair to guess that Biden’s decision to lift curbs goes beyond geopolitical considerations, though the geopolitical considerations are of considerable significance for a country, which wants to recapture its role as the undisputed global leader, something that the Trump Presidency was criticized for having discarded.
All told, the US had successfully led the world in fighting the natural calamities and minimizing their impacts in the past. In 2003, President George W. Bush started the US President’s Emergency Plan for AIDS Relief, the largest global health program focused on a single disease in history.
In 2004, when a tsunami in the Indian Ocean caused more than 220,000 deaths and billions in damage, the US had been a part of an inclusive humanitarian relief and recovery effort, along with India, that rescued victims, hastened reconstruction and built lasting goodwill all over South and Southeast Asia.
Likewise, Indo-US collaborations in vaccine productions are good and beneficial not only for the two countries but also for the rest of the world. Hurdles to India in this regard will hurt everybody, given that it is the largest provider of generic medicines globally.
India occupies a 20% share in global supply by volume, supplies 62% of global demand for vaccines, ranks 3rd worldwide for production by volume and 14th by value, and happens to be the only country with the largest number of US-FDA compliant pharma plants (more than 262 including APIs) outside the United States.