1. @HarvardBiz has just published a new piece by @ANewman_forward and I on coronavirus and "reverse protectionism." hbr.org/2020/03/will-g… We look at how supply chain fears are reshaping global markets and spilling over into vaccine development, which should be cooperative
2. The logic is straightforward - that in a world where states fear that they don't have enough basic medical supplies for their citizens, they are going to want to hoard what they have. Regular protectionism involves import restriction. Reverse protectionism restricts exports.
3. We have seen this happening within the EU - where Germany initially responded to Italy's urgent request for medical supplies by restricting exports of medical equipment, while the French government effectively requisitioned all the medical masks in its national territory.
4. Now, there is more coordination happening within the EU - but the European Commission is restricting exports as @ChadBown piie.com/blogs/trade-an… and @yarbatman describe, moving the problem of reverse protectionism from the nation-state level to the EU.
5. This is spilling over into demands for traditional protectionism, as economic nationalists such as Peter Navarro claim that the US has no allies in a crisis like coronavirus and Tom Cotton calls for the US to stop relying on China's supply chains for medical goods.
6. So that the coronavirus crisis is becoming an accelerant for the tensions that Abe and I have discussed in our work on #weaponizedinterdependence, perhaps leading US to withdraw from supply chains where they fear that China will manipulate chokepoints.
7. But there may be broader implications for the global health infrastructure. We usually think of vaccine production as something that has strong public good characteristics from the perspective of a state. Not only does it not hurt your health security if other states have ...
8. access to a vaccine, it helps it, since the contagion is less likely to spread from them to you. Now, however, vaccine production is being securitized. We describe the controversy over US-German control of a German based company working on a coronavirus vaccine.
9. Where a German newspaper reported that the Trump administration was trying to obtain vaccine exclusivity for US citizens. It is not clear exactly what happened - but what is clear is that senior German politicians believed that this was a credible threat.
10. The US and Germany are allies. If they can't trust each other over what should be very nearly a no-brainer, we may be in serious trouble. The lack of trust is extremely unlikely to spill over into vaccine wars - but it is likely to hamper cooperation and information sharing.
11. There is another possible dynamic that could develop. China is leveraging its production capacity, and the fact that (for the moment) it has coronavirus under control, by providing other countries with supplies of masks and other goods needed to tackle coronavirus.
12. Plausibly, it is doing this for external reasons (to win influence/supplant US) and internal too (to create a different storyline than 'we screwed up and thousands of our people died because we didn't want to acknowledge the problem until after it had gotten out of control').
13. Still, a world of competitive generosity, in which the US and EU started to think about how to match China would be a better world than one of mutual hostility and refusal to cooperate. Competitive gift-giving has its own pathologies - but it likely beats alternative. Finis.
