ARE COVID-19 TRADE RESTRICTIONS WTO CONSISTENT
Author:- Yash Yadav
In this following year, a lot of things are happening on the planet like Earthquake, forest fire, and particularly this Novel Coronavirus originated in China. The Covid-19 virus has spread across most of the countries especially affecting United States, United Kingdom, India, Italy and causing major shutdown across countries due to which it has directly affected the area of Trade i.e. export and import that is done by the countries internationally and due to this various countries have put restrictions on some health products while keeping in mind the situation of Covid-19 in their domestic countries and if we want to discuss the export restrictions then we have to discuss it through the medium of World Trade Organization as WTO is the organization that deals with the rules of trade between the nations globally as they are negotiated by the organization members once when they meet. So, recently WTO has passed a report in which various countries have temporarily restricted the export of their medical products and preserving it for their country use and thus a number of countries impose trade restrictions and which have raised questions about the consistency of such actions with WTO.
WTO RULES APPLICABLE TO EXPORT RESTRICTIONS
According to the reports of Covid-19, a number of countries have placed restrictions while keeping in mind the widespread issue of the Covid-19 on the medical products like Face Masks particularly N-95 mask, Ventilators, pharmaceuticals, and various other medical equipment’s as this Covid-19 pandemic has brought a difficult challenge towards various countries to safeguard Public health Interest that leads to the drastic hike in the demand of Medical equipment’s all across the world and the countries are facing a shortage of these medical products and all the countries are somehow dependent on the international trade to meet their domestic demand of medical products and for that trad must go on within the countries but these countries have put restrictions on these medical products and have reported to the WTO of their restrictions over their medical equipment’s. If we go in detail, around 80 countries have placed trade restrictions in response to Covid-19, and if we look into the rules of Covid-19, Article XI of General Agreement and Trade (GATT) 1994, broadly prohibits the export bans and restrictions other than duties, taxes on any other charges but it also have some exceptions and if we look into the WTO rules, WTO agreement is flexible in permitting some trade restrictions in the time of emergency measures currently like this COVID-19 pandemic which are related to the national security or health even if they are contravening the WTO obligation but while imposing the restrictions there are some condition that should be followed while applying the trade restrictions which are as follows:
- Firstly, these restrictions must be temporary,
- Secondly, it should be targeted and
- Thirdly, it must be transparent.
As we know the primary motive of the WTO is to ensure that the trade is not completely restricted and being stopped. If we analyse, all those countries who have imposed restrictions on the medical equipment’s have made restrictions which are temporary as we see as the USA which has put the restriction on the export of N-95 mask has been partially lifted or we focus on India, India was not exporting the hydroxychloroquine drug but they exported it to US and Brazil and many companies after the pressure came from the USA and Later, the USA also appreciated India for exporting drugs which shows that these restrictions are not permanent as they just temporarily restrict just to increase the domestic availability of that particular product in the domestic country and then they will export after fulfilling their domestic needs and it should also be transparent by informing the WTO of their upcoming policies to deal with the crisis by giving the notification and later many countries notified the WTO and also some of them removed the restriction.
As a response to this virus pandemic, countries all over the world who has been infected by this virus including the US have imposed temporary restrictions on exports of certain medical goods, but they are not explicit bans but it varies from licensing requirements for sales to the state and also some agriculture emergency is also present but here we will talk about the medical equipment’s. Some markets are heavily dependent on the countries which have imposed restriction depend heavily on countries that have implemented restriction for the medical equipment as the national interest of each country has been paramount safety of their Public and if we talk about the international cooperation as countries and international organization have taken some coordination action over the issue of growing trade restriction due to the Covid-19 which were as follows in March 2020, France, Germany and European commission negotiated a deal in which there was end to the Intra European export Restrictions on the medical supplies within them and following in the same month, the G-20 countries stated that any emergency measures that has been taken Must be in Transparent, Targeted and temporary and it must not disrupt the supply chain of Trade and also Singapore and New Zealand entered into the open agreement where there will be zero tariff over import and Exports and these were the some important event that happened to deal with the crisis of shortage of Medical Equipment’s. WTO Direction General has also called members to improve transparency as follows;
- The countries must ensure the new export-restricting measures that are taken must be adequately published at the national level,
- The countries should notify WHO as soon as possible over their New export Restricting measure through
- Countries must update necessary the information under the “transparency notification” provided under Article 1.4 of Trade Facilitation,
- Provide additional information to other members beyond notification whenever possible.
WHAT WILL BE THE FUTURE OF TRADE
As we know the various countries put the temporary restrict over the Medical Equipment’s because these countries want to preserve the medical equipment’s for their countries to deal with pandemic as they want to keep them within domestic territories as every country national interest is to safeguard their people and then export the extra equipment’s as this pandemic is going on a large scale which is causing a shortage of these medical products and a drastic high demand of these products. So according to the Article XI of GATT a crisis or in an emergency, a member can decide to impose export restrictions to ensure that there are enough supplies of these and due to this the world supply is decreasing and according to the law of price is if the supply is less, demand will be more and it will cause an increase in price and will cause Inflation.
There are also more effects like due to export restrictions, it can also trigger a domino effect that would push and will enforce other exporters to introduce and impose similar restrictions to keep domestic prices as low as possible. As there are various other things that can happen but in the recent events, G-20 countries they are trying to deal with this crisis and WHO director also gave some tips to be transparent by giving some guidelines that must be followed as it is already being discussed above in article and Germany, France and European omission have already entered into negotiation in which there will be the free flow of goods and serviced related to a medical emergency. These things are to ensure that the Trade should not be stopped and it should go on as various countries are dependent on the import of this medical equipment. So, they could also survive this pandemic. At the last, if we can talk about is the disruption on the Air cargo mode as well as disruption in transport services as due to the contraction on the air traffic, it has led to a reduction in air cargo capacity and has increased the mode of Transport is also a challenge towards the world.
At the Last, we can conclude that the restrictions that were made by the more than 80 countries come under the exception clause of Article XI of GATT, where the countries can impose restrictions in case of crisis and emergency and here, it is Covid-19 Crisis but these restrictions are temporary not permanent and we can take the example of India supplying hydroxychloroquine drug and the US also restricted N-95 mask but later those restrictions were also lifted and in the recent events, G-20 met and said the protocol of emergency under should restrictions are made must be strictly followed and WHO Director-General Gave instruction on How to improve transparency and agreement between European association, France and Germany. These are showing the efforts taken by the countries so the trade must go on in this crisis and There is a lot of things that are yet to be done in the upcoming tome to deal with the Covid-19 Crises.