Don’t put export bans on medical supplies during COVID-19. Why trade should flow freely to the world’s poorest countries

By Violeta Gonzalez Behar, Head, Partnerships, Outreach and Resource Mobilization, Enhanced Integrated Framework, World Trade Organization


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.
This blog is also a part of a thread looking more specifically at the impacts and responses to the COVID-19 crisis in Least Developed Countries (LDCs).



export-medical-covid19-tradeWith coronavirus spreading fast and now present in 185 countries, the pandemic has already reached some of the world’s poorest countries. We are all familiar with the headlines pointing to a shortage of masks, ventilators, gloves, gowns and face shields across countries. Fear and hoarding is only magnifying scarcity.

Amidst the uncertainty surrounding the availability of medical supplies, it may be tempting for governments to save supplies for their own citizens. And this is exactly what is playing out at the global level. Currently there are over 80 curbs on exports of essential COVID-19 medical supplies and medicines that have been introduced by 76 nations this year.

The consequences of such actions are already visible in countries like Italy, Spain, the United Kingdom and the United States. Now imagine how life-threatening this could be in the poorest countries, an example being the Central African Republic, where there are only three ventilators in the entire country.

Now more than ever, when so many human lives could be at stake, we must ensure medical supplies are available and can reach all in need. This is the time when we must all stand to ensure trade flows freely to all.

Preventing a humanitarian disaster

The impact of the virus on the world’s 47 least developed countries (LDCs) that span Haiti to Timor-Leste could be disastrous. Health systems in these countries face enormous challenges in their responses to COVID-19. Being cut from access to foreign medical supplies would put them at great risk. Most LDCs lack domestic industries that produce medical supplies, and largely depend on imports. If their populations are suddenly exposed, they would be unable to ramp up local production to assist in any significant way.

How could health workers in LDCs then get the protection they need if they don’t have access to medical supplies? These workers will be at an even higher risk of infection, of falling ill or of spreading coronavirus to others. Healthcare in these countries could also come to a halt. Hospitals will not be able to treat patients, and this would not only affect those with COVID-19, but also others with deadly diseases such as malaria or tuberculosis.

Many LDCs rely on imports of medical supplies from the European Union (EU) or China, and would be left extremely vulnerable if either would cut off access to exports. And there is reason to already be concerned. The EU has announced emergency export restrictions on some medical supplies that are perceived as needed to fight COVID-19 in the European single market.

In sub-Saharan Africa, these restrictions could have a devastating impact on many LDCs that import more than 50% of their total imports of face shields, including Angola, Niger, the Democratic Republic of the Congo and Senegal. Export bans of medical supplies could lead to a humanitarian disaster that we must avoid.

Coordinated trade action needed to ensure availability for all

 

The crisis ultimately requires coordinated international action. Yet in the short term we need to learn lessons from history that the virus itself may hamper international cooperation in various ways. The dynamics of the pandemic are very different than other types of crises. The immediate response has been to break interconnections as a measure to contain and mitigate the virus.

This reduces the ability for countries to cooperate, and creates further incentives for countries to implement export bans and anticipate global shortages. These bans on medical supplies have become as infectious as the virus itself. There is a “multiplier” effect of one country’s export restrictions leading to another and then another and this also then has an impact on world prices.

For coronavirus, economic and healthcare assistance is a matter of international concern and cooperation. Immediate and long-term support will be needed to assist the world’s poorest countries. The age profile of most LDCs makes them more resilient to the coronavirus than other countries. Cohorts of high-risk patients in these countries may be smaller. But the weak health systems in LDCs more than offset COVID-19’s potential impact, putting their populations at higher risk.

The economic vulnerability of these countries is also higher than in middle-income countries or advanced economies. Global supply chain disruptions are impacting the economies of LDCs in significant ways. The spread of the coronavirus is already driving price increases of medical supplies as production struggles to meet demand, making the health systems and economies of LDCs even more vulnerable. More than 80% of export earnings from LDCs come from commodities. The continued fall in commodity prices and in some cases the fall of national currencies since the outbreak makes it even more expensive for LDCs to purchase medical supplies.

G20 Members recently pledged to cooperate on the smooth flow of goods and services necessary for the crisis and its aftermath. The G20 communiqué stated, “We are gravely concerned with the serious risks posed to all countries, particularly developing and least developed countries, and notably in Africa and small island states.”

International cooperation is critical to ensure medical supplies ultimately reach the most vulnerable populations. Before coronavirus reaches the LDCs in a significant way, the time to act is now. Ramping up global production and distribution of medical supplies is one way. G20 countries agreeing not to restrict exports of coronavirus-related medical products is another. Coordination on price mechanisms to ensure access and availability for all is a must. Let’s not wait until a humanitarian crisis unfolds.

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