March 27, 2020 3:49PM

How the WTO Can Help in the Efforts Against COVID-19

National measures to address the challenges faced by COVID-19 have been proliferating at breakneck speed across the world. While there have been a number of important efforts to track these measures, international coordination has been lagging. Though the immediate crisis we each individually feel is close to home, it is shared among the entire world. Just as no person is immune from the virus, neither is any country. A global pandemic requires a global response. The good news is that we already have many mechanisms in place to collaborate on an international level, and now is the time, if any, to use them.

One area where coordination would be especially helpful at this time of crisis is in international trade. With many countries facing critical shortages of personal protective equipment (PPE), ventilators, and other medical supplies, keeping supply chains moving and markets open is integral. A new report issued by economist Simon Evenett from the University of St. Gallen in Switzerland found that 54 countries have imposed export restrictions on medical goods this year. While seven countries (Australia, Brunei, Canada, Chile, Myanmar, New Zealand and Singapore) affirmed “the importance of refraining from the imposition of export controls or tariffs and non‐​tariff barriers and of removing any existing trade restrictive measures on essential goods, especially medical supplies, at this time,” the United States has remained silent on this issue.

The Director‐​General to the World Trade Organization (WTO), Roberto Azevêdo, recently announced an effort to enhance transparency of measures countries are taking that may be trade disruptive. The WTO can actually play an important role here. While most people associate the organization with its dispute settlement mechanism, which allows states to challenge trade restrictive measures of other states through adjudication, there is much more to the WTO than dispute settlement. In fact, the transparency mechanism highlighted by Azevêdo is an important component of the daily interaction of WTO members in other areas, allowing countries to have quick knowledge of what others are doing. But this mechanism can be used in other ways too.

For instance, the new COVID-19 notifications could include not just the measures countries are taking, but also the supply shortages they face. Instead of one‐​off phone calls with individual leaders, this type of notification system could help in identifying the places where need is most critical, giving businesses and governments the information they need to coordinate an effective response. Such notifications can then be discussed within the Council for Trade in Goods (often comprised of ambassador‐​level diplomats), or at the General Council, the highest deliberative body of the WTO (after the Ministerial Conference, which was cancelled this year). These notifications can also be made part of the WTO’s innovative ePing system, which allows the public and private sector to be quickly alerted to new product requirements. The WTO could create similar alerts for medical goods shortages, so that governments and the private sector can respond without delay.

While some are arguing for more protectionism and autarky amidst the pandemic, these calls are both problematic and short‐​sighted. This line of thinking underpins the views of U.S. Trade Representative Robert Lighthizer, who recently defended the administration’s wide use of tariffs, suggesting that it would encourage the diversification of supply chains, “and—better yet—more manufacturing in the U.S.” First, diversifying supply chains in good times is hard enough, and in the middle of crisis, foolhardy. Lifting these tariffs immediately makes economic sense and is the moral thing to do as Americans face mounting economic challenges (because China doesn’t pay the tariffs, we do). Second, pushing for “reshoring” or things like “Buy American” provisions is also harmful, and will undoubtedly raise costs for consumers and producers alike, and add additional stress to manufacturers trying to ramp up production amid shortages.

As my colleague Simon Lester recently explained:

We want to have good trading relationships with the rest of the world, because when (inevitably) something goes wrong with our own production, we want to be able to quickly get help from others. We are better off if this manufacturing knowledge is distributed around the world. We just want to make sure that we have sources of supply in countries that we can count on.

To ensure the steady stream of supply, we need international coordination, and the WTO is well placed to play a critical role in this effort. This week, Ambassador Alan Wolff, Deputy Director‐​General to the WTO, called for an “unprecedented level” of international cooperation in the face of the COVID-19 pandemic, noting that “The WTO also serves as a venue for discussions, cooperation, coordination and negotiation, even if the discussions will for the time being largely not be face‐​to‐​face.” These functions must continue, and a special effort be made to identify the gaps in national responses so that medical products can be directed to places most in need.

Furthermore, as the pandemic spreads, not every country will have the capacity to tackle these challenges alone, and developing countries that rely on imports of medical goods, will be particularly affected by export bans if they continue. More than half of the WTO’s membership is made up of developing countries, and they have extensive experience in using the current notification system. Let’s not reinvent the wheel and make it harder for countries to get the help they need—the WTO’s transparency mechanism can be an essential tool in this regard. Therefore, instead of taking on the attitude of every country for itself, we must quickly recognize the global nature of this current crisis, and respond in kind.