1. Something that's really struck me in the Brexit negotiations this year is the surprisingly fragile confidence the EU seem to have in the competitive advantage conferred by the single market. Sounds strange, but bear with me.

(Thread)

EU chief negotiator Michel Barnier has briefed Europe Ministers from EU member states that progress continues to be made in negotiations with the UK but not significantly when it comes to key sticking points: level playing field, fish, governance of deal /1

This briefing comes ahead of the EU leaders summit in Brussels end of this week, where Brexit will be discussed most likely I’m told on Friday morning. Both Michel Barnier and the PM once described this summit mid October as cut off point by which time a deal had to be agreed /2

This clearly will not be the case and each side predictably blames the other for that. Today a UK government source said: „The EU have been using the old playbook in which they thought running down the clock would work against the UK“ /3

„They have assumed that the UK would be more willing to compromise the longer the process ran, but in fact all these tactics have achieved is to get us to the middle of October with lots of work that could have been done left undone.“ /4

Both sides say they still want a deal and think it entirely possible to reach a deal this year, infact v soon, if only the OTHER side would just be „more realistic“ (ie make the big compromises) /5

The important difference between AstraZeneca's relationship with the UK and with the EU, and the reason it has fallen behind schedule on 50m vaccine doses promised to the EU, is that the UK agreed the deal with AZ a full three months before the EU did - which gave...

AZ an extra three months to sort out manufacturing and supply problems relating to the UK contract (there were plenty of problems). Here is the important timeline. In May AZ reached agreement with Oxford and the UK government to make and supply the vaccine. In fact Oxford...

had already started work on the supply chain. The following month AZ reached a preliminary agreement with Germany, the Netherlands, France and Italy, a group known as the Inclusive Vaccine Alliance, based on the agreement with the UK. The announcement was 13 June. BUT the EU...

insisted that the Inclusive Vaccine Alliance could not formalise the deal. The European Commission insisted it should take over the contract negotiations on behalf of the whole EU. So were another two months of talks and the contract was not signed till the end of August...

What is frustrating for AZ is that the extra talks with the European Commission led to no material changes to the contract, but wasted time on making arrangements to make the vaccine with partner sites. The yield at these partner sites has been lower than expected. The problem...

1/ Lots of good analysis out there on why the EU-China CAI is a bad decision in the context of Xinjiang, transatlantic partnerships, etc. But I also think that even the trade/econ benefits of the CAI look quite limited. Thread:

2/ It highlights, as a win, that China’s preservation of existing liberalizations. That’s positive, but not really a big problem; the bigger issue is stagnation, where reform pledges have failed to materialize after years/decades of promises. Great example is in the FDI openings,

3/ which are highlighted to include cloud, auto, fin services etc—all areas of EU/MNC interest. Thing is, these openings aren’t new. China has begun opening auto/finance since 2018/19, while the 50% cap on cloud services has remained unchanged since 2015 (or before if we consider

4/ WTO ascension commitments vs the 2015 Telecom Catalogue, but that’s for another day). So these are existing openings that are repackaged as “wins.” More critical issue beyond FDI caps is around licensing issuance, which still big problem. Arguably some more significance in

5/ R&D and health? Not an expert, but the FDI conditions (eg hospitals only in certain cities) are limiting, while R&D could be complicated by data/info controls. It’s also unclear how existing tech transfer prohibitions exceed existing protections in the foreign investment law,

Update from MEP @PeterLiese, health spokesman for the largest party in the EU Parliament (thread):

He maintains #AstraZeneca is treating people in EU as "2nd class citizens" and that doses have gone from the EU to the UK.

"They gave 3 different explanations in less than a week"

Carrot: He's says objections are with AZ behaviour, not vaccine's efficacy

"There's been a lot of talk about AZ being a bad vaccine - very strange fake news in German media. It's definitely not true"

"If someone offered me AZ, and it’s my turn, I wouldn’t hesitate for a minute"

“The AstraZeneca vaccine has not as good data as the vaccines from BioNTech/Pfizer and Moderna but still it is a good vaccine. In October, we would have been happy to have a vaccine that has an efficiency well above 50%."

Stick: "AZ gave 3⃣ different explanations in less than a week why there is a shortage of supply on the European continent and why they want to deliver only 31 million doses instead of 80 million that they committed to in the contract until the end of March."

1⃣ "1st explanation was different supply chains. This is wrong because in contract with the EU, two plants in the UK are mentioned for the supply on the continent and at least until a few days ago the final finishing of the vaccine [for UK] has been in a plant in Dessau, Germany"