The International Monetary Fund and the World Trade Organisation called for open trade policies and removal of curbs on medical supplies and food items trading amid increasing export restrictions in the wake of the coronavirus pandemic.
“Export restrictions can be dangerously counterproductive. Such measures disrupt supply chains, depress production and misdirect scarce, critical products and workers away from where they are most needed,” the IMF and the WTO said in a joint statement on Friday evening.
“Accelerating imports of critical medical supplies translates into saving lives and livelihoods. Similar attention should be paid to facilitating exports of key items like drugs, protective gear, and ventilators.”
Lats year global imports of crucial goods needed in the fight against Covid-19 – face masks and gloves, hand soap and sanitiser, protective gear, oxygen masks, ventilators, and pulse oximeters – reached nearly $300 billion (Dh1.1 trillion).
The WTO rules allow for temporary export restrictions "applied to prevent or relieve critical shortages" in the exporting country. However, the organisation urged governments to exercise caution when implementing such measures amid a global pandemic.
The novel coronavirus, which originated in the Chinese city of Wuhan, has now spread across the globe, infecting more than 2.7 million and killing 197,000 people. The rapid spread of Covid-19, as the disease is called by the World Health Organisation, has battered global trade and upended supply chains.
Countries such as India – one of the largest manufacturers of generic drugs in the world – banned exports of some drugs and personal protection equipment (PPE) for healthcare works as the number of the coronavirus cases continued to rise in the country.
Since the outbreak of Covid-19, about 75 countries across the globe have imposed export barriers on materials for PPE. At the same time, many have eased their import restrictions, which is “asocial behaviour when you have a global crisis”, Paul Polman, chairman of the International Chamber of Commerce, said on Tuesday.
The IMF and the WTO said the curbs on some food items could also lead to "ever greater uncertainties and price increases".
“If critical agricultural workers are not able to move to where the harvest is, crops could rot in the fields. Where new cropping seasons are starting, planting could be hampered, lowering both domestic and international supplies and increasing food insecurity. We urge governments to address these challenges in a safe and proportionate manner.”
The organisations also urged the government and financial institutions to provide adequate trade finance to ensure that imports of food and essential medical equipment reach the economies where they are most needed.
“Our institutions are tracking developments and engaging with key suppliers of trade finance,” they noted.
They said agreement during the 2008 financial crisis to not impose new import, export, and investment restrictions had helped enormously at the time.
“A similarly bold step is needed today. We call on governments to refrain from imposing or intensifying export and other trade restrictions and to work to promptly remove those put in place since the start of the year," they added.