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HELP WANTED
Scientists are coming up with COVID-19 vaccines. But their efforts will be wasted unless we set up an enforceable global vaccine distribution scheme now.
But this is a trade problem we know how to solve.
My latest, with @TomBollyky 1/ https://www.foreignaffairs.com/articles/united-states/2020-07-27/vaccine-nationalism-pandemic?utm_medium=social
Scientists are coming up with COVID-19 vaccines. But their efforts will be wasted unless we set up an enforceable global vaccine distribution scheme now.
But this is a trade problem we know how to solve.
My latest, with @TomBollyky 1/ https://www.foreignaffairs.com/articles/united-states/2020-07-27/vaccine-nationalism-pandemic?utm_medium=social
Admittedly, this is a super hard trade problem to solve.
First, COMPULSORY LICENSING is unlikely to work.
Manufacturing vaccines is high tech manufacturing, and will only be feasible in a handful of mostly rich countries.
Poor countries are going to need to IMPORT it. 2/
First, COMPULSORY LICENSING is unlikely to work.
Manufacturing vaccines is high tech manufacturing, and will only be feasible in a handful of mostly rich countries.
Poor countries are going to need to IMPORT it. 2/
We need trade. Fine. So what?
Governments whose scientists discover it first are likely to engage in export bans (vaccine nationalism) to vaccinate their populations first
Eg, already during the pandemic, China, France, Germany, the EU, US and others did this to hoard PPE... 3/
Governments whose scientists discover it first are likely to engage in export bans (vaccine nationalism) to vaccinate their populations first
Eg, already during the pandemic, China, France, Germany, the EU, US and others did this to hoard PPE... 3/
We need to convince governments that sharing is in their own best interest
Some of the arguments
1. Public health - no one is safe until everyone is safe
2. Economics
• Imports - foreigners under lockdown = lost inputs
• Exports - foreigners under lockdown = lost markets 4/
Some of the arguments
1. Public health - no one is safe until everyone is safe
2. Economics
• Imports - foreigners under lockdown = lost inputs
• Exports - foreigners under lockdown = lost markets 4/
Why would a vaccine manufacturing country agree to share ex ante?
Because "its" candidates might not pan out. Diversification of risk.
It's better to get access to SOME vaccine soon with near certainty, through sharing, rather than run the risk of getting no vaccine at all
5 /
Because "its" candidates might not pan out. Diversification of risk.
It's better to get access to SOME vaccine soon with near certainty, through sharing, rather than run the risk of getting no vaccine at all
5 /
How much vaccine to share with each country?
Rely on scientists and public health experts to advise
Eg, each country gets enough to vaccinate its most critical populations first - health care workers, essential workers, elderly, immunocompromised, military, teachers...
6 /
Rely on scientists and public health experts to advise
Eg, each country gets enough to vaccinate its most critical populations first - health care workers, essential workers, elderly, immunocompromised, military, teachers...
6 /
OK, I'm convinced. Let's do it. What's the problem?
Even if we agree to share today (ex ante), whichever country discovers it first has an incentive to renege (ex post) and keep all of the vaccine for itself.
UGH. Without a way to enforce the deal, there will be no deal.
7/
Even if we agree to share today (ex ante), whichever country discovers it first has an incentive to renege (ex post) and keep all of the vaccine for itself.
UGH. Without a way to enforce the deal, there will be no deal.
7/
Note: This is where we are stuck right now
The PRISONER'S DILEMMA.
Because of the belief that everyone else is going to engage in vaccine nationalism, it is rational for "me" to do it too.
Even though we can all be made better off by coordinating and agreeing NOT to do it.
8/
The PRISONER'S DILEMMA.
Because of the belief that everyone else is going to engage in vaccine nationalism, it is rational for "me" to do it too.
Even though we can all be made better off by coordinating and agreeing NOT to do it.
8/
How to enforce a COVID-19 Vaccine Trade and Investment Agreement?
We need a credible punishment for "cheating" - a country signs up, but then reneges by keeping the vaccine for itself upon discovery.
Need credible rules that trading partners would act on to DISSUADE that...
9/
We need a credible punishment for "cheating" - a country signs up, but then reneges by keeping the vaccine for itself upon discovery.
Need credible rules that trading partners would act on to DISSUADE that...
9/
How to enforce a COVID-19 Vaccine Trade and Investment Agreement?
Trading partners can threaten to WITHHOLD INPUTS
Manufacturing vaccines will require IMPORTED inputs of raw ingredients, stabilizers, preservatives, adjuvants, vials, syringes...
Without inputs, no output.
10 /
Trading partners can threaten to WITHHOLD INPUTS
Manufacturing vaccines will require IMPORTED inputs of raw ingredients, stabilizers, preservatives, adjuvants, vials, syringes...
Without inputs, no output.
10 /
How to enforce a COVID-19 Vaccine Trade and Investment Agreement?
Trading partners can threaten to WITHHOLD THE NEXT VACCINES.
The first vaccine may not be the best vaccine. Failing to cooperate today means the world may fail to cooperate with you tomorrow...
11/
Trading partners can threaten to WITHHOLD THE NEXT VACCINES.
The first vaccine may not be the best vaccine. Failing to cooperate today means the world may fail to cooperate with you tomorrow...
11/
Admittedly, enforcement options are not pleasant to think through. (Sorry)
But if policymakers are stuck because they think a globally cooperative COVID-19 Vaccine Trade and Investment Agreement is unenforceable, so we should not try to negotiate one...
...that is wrong.
12/
But if policymakers are stuck because they think a globally cooperative COVID-19 Vaccine Trade and Investment Agreement is unenforceable, so we should not try to negotiate one...
...that is wrong.
12/
Scientists are coming up with COVID-19 vaccines. But their efforts will be wasted unless we set up an enforceable global vaccine distribution scheme now.
This is a trade problem we know how to solve.
My latest, with @TomBollyky for @ForeignAffairs https://www.foreignaffairs.com/articles/united-states/2020-07-27/vaccine-nationalism-pandemic?utm_medium=social
This is a trade problem we know how to solve.
My latest, with @TomBollyky for @ForeignAffairs https://www.foreignaffairs.com/articles/united-states/2020-07-27/vaccine-nationalism-pandemic?utm_medium=social
Sign up and come watch (via Zoom) the @PIIE event @TomBollyky will be doing about how to solve this problem, and why it is so important to do so NOW
AND ASK QUESTIONS
Tues, July 28
11:00-11:45am ET
https://twitter.com/PIIE/status/1287755402503954433?s=20
AND ASK QUESTIONS
Tues, July 28
11:00-11:45am ET
https://twitter.com/PIIE/status/1287755402503954433?s=20
The amazing @PIIE team produced a Summer 2020 BLOCKBUSTER film [2 minutes] on my @ForeignAffairs essay with @TomBollyky ...
The Tragedy of Vaccine Nationalism: The Movie
https://twitter.com/PIIE/status/1287799427667722246?s=20