On 3 June 2022 the World Bank and the WTO launched a document entitled: Trade Therapy: Deepening Cooperation to Strengthen Pandemic Defenses.
The publication notes that trade has an important role to play in the response to health crises such as the pandemic. Open markets facilitate access to medical services and goods and to the inputs required for the manufacture of the goods. Open markets also increase the diversity and the quality of available products. The combination of open trade and government support can encourage the type of innovation that led to the rapid development of vaccines during the pandemic.
On the other hand, if production is concentrated in only a few places, and there are restrictive trade policies and disruptions to the supply chain, the response to a health crisis is weakened. The international community must therefore work together to ensure a better response to future pandemics. The economic problems caused by the pandemic have created a consensus that international action is needed, and the cost of taking action now will be much less than the potential cost of a future pandemic.
The report therefore proposes an action plan for trade-related responses. Policies implemented for prevention and preparedness will ensure that public health threats can be avoided or mitigated before they arise. Priority should be given to closing information gaps, and opening markets by negotiating lower tariffs for medical goods and providing more market access for medical services.
Measures should also be taken to improve the efficiency of markets, by taking steps to harmonise regulations and create international standards for essential medical goods, inputs, and production processes. A plan should also be put in place for when a medical emergency arises, providing for agreed limits on export policy for critical goods and more flexibility on intellectual property.
Countries could agree to reduce or remove tariffs and domestic taxes on essential medical goods; and maintain a list of essential goods to be kept updated in a coordinated way. Export restrictions could be removed for essential goods and there could be international coordination of prohibitions, restrictions and licensing requirements. Import and export licensing procedures could be streamlined so they are not an obstacle to trade, and the requirements could be reviewed to identify any unnecessary licensing regulations that need to be removed.
The implementation of the WTO’s Trade Facilitation Agreement (TFA) could be accelerated for essential medical goods to allow timely access through measures such as prearrival processing of customs procedures.
When a health crisis breaks out, governments could stop imposing import tariffs on essential medical goods that are in short supply. These tariff reductions should be imposed for a minimum period, such as three years, that is sufficient to preserve market stability. During a global health emergency, governments should stop imposing export prohibitions or restrictions and ensure that any such measures are only imposed as a last resort to protect domestic shortages of medical goods.
In relation to facilitating trade, governments could extend the use of digital documents, review the necessity of prescriptive border measures such as post-entry audits and review procedures around critical consignments. Trading partners could cooperate to improve coordinated border management and identify high-risk imports. Joint working groups covering the public and private sectors could be established to prioritise access issues that need to be dealt with.
