The International Monetary Fund (IMF) Managing Director Kristalina Georgieva and Director-General of the World Trade Organisation (WTO), Roberto Azevêdo, have on Friday April 24 issued a joint call for governments to refrain from imposing export and other trade restrictions on key medical supplies and food and to quickly lift those put in place since the start of the year.
In response to the COVID-19 pandemic, some governments have adopted measures to facilitate imports of medical products, such as cutting import duties, curbing customs-clearance processes, and streamlining licensing and approval requirements, the two agency heads noted.
Similar attention should be paid to facilitating exports of key items such as drugs, protective gear and ventilators, they added.
While global trade rules allow for temporary export restrictions to prevent or relieve critical shortages, “we urge governments to exercise caution when implementing such measures in the present circumstances”.
“What makes sense in an isolated emergency can be severely damaging in a global crisis,” they warned. “Such measures disrupt supply chains, depress production, and misdirect scarce, critical products and workers away from where they are most needed.”
“The result is to prolong and exacerbate the health and economic crisis — with the most serious effects likely on the poorer and more vulnerable countries.”
Ms Georgieva and DG Azevêdo also expressed concern with the decline in the supply of trade finance, which ensures that imports of food and essential medical equipment reach the economies where they are most needed. In addition, despite strong supply, export curbs on some food items are beginning to appear.
“The experience in the global financial crisis showed that food export restrictions multiply rapidly across countries and lead to ever greater uncertainties and price increases,” they noted.