INTRODUCTION
One of the greatest challenges faced by countries these days is the major health crisis caused by COVID-19[1]. When it comes to defining the impact of this disease, it’s not just limited to health issues faced by people of different countries but also covers economic downfalls, political crisis, and social issues which are going to leave a deep impact in the long term. The World Trade Organisation (WTO)[2] has imposed restrictions on the export of various items in this ongoing situation. By the end of April, Governments of more than 80 countries have put barriers tothe export of necessary medical equipment essential to treat those suffering from this disease. The two most controversial countries highlighted in this are America; which decided to stop the export of the N95 masks to Canada and Latin America, and then comes India which decided to ban hydroxychloroquine drug essential for treating patients suffering from this harmful disease. However later on this ban was lifted after due pressure from countries like Brazil and America. Along with this, WTO members have increased restrictions to keep supplies under control at the national level and prevent a shortage. Major areas of restrictions include pharmaceuticals, ventilators, face masks, other medical equipment, food, and toilet paper. All these restrictions are posing a big problem in countries with huge populations or let’s say where the number of people affected by coronavirus is so large that medical supplies fall short and need to be exported. All countries depend on international trade to get the supply of some essential goods which is hindered due to this ongoing disruption in air cargo. Even the lack of international cooperation posed a major hindrance in the supply of essential goods. As a result of the COVID-19 pandemic, 46 WTO members and 8 non-WTO members imposed certain restrictions and bans which were declared temporary.
WTO RULES
- Article XI of GATT, 1994, clearly prohibits ban and restrictions on trade. However, it is permissible to, members to do so, only in case of shortage of such essential goods or food supplies temporarily. This article deals with qualitative restrictions on trade.
- When it comes to the WTO, one can see that it contains wider general exceptions to prove that such restriction or ban is not meant to discriminate between countries or promote any kind of arbitrary measures.However, WTO demanded that restrictions should be transparent enough. Further, they should be targeted, be temporary, and not unnecessarily restrict trade.[3]
KINDS OF RESTRICTIONS ON EXPORT
- When it comes to essential items,the most important one is food. It is observed that at least 17 countries have taken measures to regulate the export of food supplies whether in terms of licensing for such export or banning the export. Some of the examples are Turkey (which has imposed restrictions on the export of onions, lemons, and potatoes)and Vietnam (which imposed restrictions on the export of rice), etc.[4]
- Amidst these prevailing pandemic conditions,the supply of medical and sanitation equipment is equally important. But after thorough study, it is observed that at least 50 countries have imposed 95 restrictions on the supply of this essential medical equipment such as personal protection equipment kits, pharmaceuticals, chemicals required for sanitation, etc.
IMPACT OF EXPORT RESTRICTIONS:
- Such export restrictions tend to harm the supply chain, may depress production, and cut off countries from essential supplies; causing a huge dissatisfaction among employees or workers of exporting countries and leading to their movement from a place where they are most needed.
- Further, if studied properly, one may analyse that in the short run, when larger exporter tries to curb export supplies, it may increase the domestic availability of those goods and tend to lower down their domestic value.
- Countries having limited manufacturing capacity will have a prolonged effect of such export restrictions in terms of the availability of such essential goods.
INTERNATIONAL COORDINATION
- To save the global economy from sinking due to these ongoing trade restrictions, efforts have been made at the global level by different countries:
- In response to ongoing COVID-19 pandemic, some countries like Singapore and New Zealand have formed an agreement that on product essentials for COVID-19 no export restrictions will be imposed and no tariffs will be charged.
- A pledge to lift emergency measures have been taken by approximately 42 members of the World Trade Organisation.
- Steps were taken in March 2020 to end Intra- European export restrictions on medical goods by entering into a negotiation by Germany, France, and Europe.
All these steps were taken keeping in mind the current scenario and the growing trend of export restrictions.
FUTURE OF TRADE AMIDST IN COVID-19 PANDEMIC
The second phase of trade restrictions during the COVID-19 pandemic is yet to come. Once vaccines and pharmaceutical remedies for the treatment of Coronavirus will be invented across the countries, there is a high risk of additional national restrictions. It is very difficult to say whether members of the World Trade Organisation will stick to their values when the global economy will be hit by the second phase of the growing COVID-19 pandemic. If global challenges are to be met, collective actions should be taken.However, one cannot predict the changes the pandemic will bring in the future because of its rising rate but in the past, various epidemics have occurred so Governmentshave a little hint of how to deal with it and balance will be maintained in the upcoming challenges. Therefore, the future of trade is unpredictable in the upcoming period.
CONCLUSION
Seeing the present condition, one can only hope for cooperation and coordination between countries and that no country faces a shortage of supply of essential items ranging right from medical equipment to food supplies and can ensure the safety of their citizens in the best possible way in the future. However, one cannot guarantee the same because of increasing cases.
Members can change their decision anytime they want with respect to supplies and export restrictions provided it is transparent and for a temporary period. Until today, one can say this with surety that the world emerging from this COVID-19 pandemic will be very different from the one preceding it, whether it be in terms of lifestyle of people or demand for goods. This pandemic has not only affected the health of people at large but is also having a devastating impact on the global economy; the one reason behind which was the lack of collective action by countries. Uncertainty of trade relations can never promote peace at a global level. Further, in order to promote the well-being of a nation, there is a need for effective demand so that the income of an individual grows, employment rate rises, and there is an expansion in production and trade of goods and services. Such measures are possible if all the countries lift unwanted trade barriers they have imposed presently. The only key to get better quantitative results is global cooperation. Slightest of failure in tackling the current trade situation smoothly and efficiently will drain the countries of their economic, social, and political gains accumulated over the period.
By-
Eshika Singla
Amity Law School, Noida
[1] The infectious disease caused by most recently discovered coronavirus.
[2] The organisation dealing with global rules of trade between countries.
[3] Congressional Research Service, Library of Congress, available at https://crsreports.congress.govt
[4]Supra note 3.
Previous post: https://desikanoon.in/agrarian-reforms-in-india/