COVID-19 Special Coverage
WTO and IMF urge nations to lift trade restrictions amid COVID-19 pandemic
echosystem / Pixabay
WTO and IMF urge nations to lift trade restrictions amid COVID-19 pandemic

The heads of the International Monetary Fund (IMF) and the World Trade Organization (WTO) called Friday for nations to lift trade restrictions on medical supplies amid the COVID-19 pandemic.

The heads of the international agencies said that the trade restrictions on supplies used to fight COVID-19 could be “dangerously counterproductive,” adding, “what makes sense in an isolated emergency can be severely damaging in a global crisis.” The organizations stress that trade restrictions will “disrupt supply chains, depress production, and misdirect scarce, critical products and workers away from where they are most needed.” The leaders fear that these restrictions will increase the duration and effects of the pandemic, especially in poorer and more vulnerable countries.

The joint statement was released only one day after the WTO issued a report indicating that fewer than half of the 80 nations that have imposed trade restrictions since the pandemic began have informed the international trade agency of these restrictions. Generally, nations have placed trade restrictions on medical supplies they plan to use to fight COVID-19, including face masks and gloves, hand soaps and sanitizers, protective gear, oxygen masks, and ventilators. The WTO noted that not notifying the agency is a violation of their rules. More importantly, the lack of transparency and cooperation could hinder the urgently required response. The report showed the WTO’s understanding of national leaders’ concerns with domestic supplies but warned of the long-term consequences.

Export prohibitions and restrictions applied by large exporters may in the short run lower domestic prices for the goods in question and increase domestic availability. But the strategy is not costless: the measures reduce the world’s supply of the products concerned and importing countries without the capacity to manufacture these products suffer.

In closing their joint statement, the agency heads made a call to action by saying that the same level of international cooperation that allowed the world to recover from the Great Depression of the 1930s is needed today.

“History has taught us that keeping markets open helps everyone—especially the world’s poorest people. Let’s act on the lessons we have learned.”

For more on COVID-19, see our special coverage.