.@TomBollyky and I have proposed a Covid-19 Vaccine Investment and Trade Agreement (CVITA)... 2/
The problem to solve:
The vaccine manufacturing supply chain is complex.
(Reflexively we think "Big Pharma," but that is NOT reality for Covid-19 vaccines)
THIS supply chain is highly fragmented & requires considerable coordination to get ANY vaccines manufactured at all 3/
US government helped coordination and scaling up of US production through Operation Warp Speed.
Billions of dollars of TARGETED US subsidies of "outputs" (vaccines) **AND** all of the "inputs" (vials, bioreactors, bags, cellular materials) needed along that supply chain... 4/
Are there lessons from the US model to now scale up global production - not for HUNDREDS of millions of doses for Americans, but BILLIONS of doses for the world?
*THAT* is where it gets more complicated. Why a Covid-19 Vaccine Investment and Trade Agreement (CVITA) is needed 5/
CVITA needs to coordinate subsidies to
A) SOME countries to increase INPUT production (ingredients & equipment)
B) OTHER countries to expand OUTPUT (vaccine 'assembly')
AND ensure trade of A) for B)...
This requires EXPLICIT international cooperation and incentives. 6/
For more details on our CVITA proposal, please read, share, talk about, poke holes in it, and let us know what you think.
The Inflation Reduction Act went into effect one year ago Wednesday (Aug 16, 2022). In Korea and Europe, anger quickly emerged when it seemed IRA's tax credits for electric vehicles would discriminate against their exports.
Yet US imports of EVs have boomed.
What happened? 1/5
Dec 29, 2022: Treasury clarifies that **leased** EVs qualify for tax credits under a separate (Section 45W) provision of IRA.
Tax credit eligibility under 45W does NOT require the EV be assembled in North America.
So leased EVs imported from Europe or Korea were eligible... 2/5
The result?
Leases as a share of new *S Korean assembled* EVs entering US market:
Dec 2022: 3%
...
Apr 2023: 42%
Leases as a share of new *European assembled* EVs entering US market:
The Inflation Reduction Act provoked a major EU-US spat over subsidies for electric vehicle supply chains. The Biden administration addressed some EU concerns by writing controversial rules to implement the law. So then what happened?
First, some background on electric vehicles (EVs).
US really needs to cut tailpipe emissions to meet Paris climate goals.
US consumers have been slow to switch from internal combustion engine cars to EVs. In 2021, only 5% of new US vehicles were EVs.
China: 16%
EU: 18%
2/
It's not as if American consumers were failing to adopt EVs - and reduce CO2 emissions - because the United States was exporting massive US production to the rest of the world.
No, US electric vehicle EXPORTS lagged China and the EU too.
US exports to China cratered during Trump’s trade war, and American sales of goods and services continue to suffer. Yet, US exports to China somehow reached "record levels" in 2022. Wait, wut?
Most US-China trade war tariffs imposed over 2018-19 remain in place:
- US average tariffs are now 19.3%, covering 66.4% of US imports from China
- Chinese average tariffs on US exports are now 21.2%, covering 58.3% of imports from US
US imports of some Chinese products have tanked. Others are higher than ever. How Trump’s selective use of tariffs continues to matter for the question about US-China decoupling.
US exports increased in 2020–21 relative to the nadir of the 2018–19 trade war. But in the end, China bought none of the additional $200 billion of US goods and services it committed to purchase under Trump's agreement... 2/n