Governments Should Rely More on the WTO in the Fight Against the Coronavirus

Yet another sign of the marginalization of the World Trade Organization (WTO) is the omission of any mention of it in the recent G20 statement on COVID-19. At a time when more international cooperation is urgently needed to control and conquer the spreading coronavirus pandemic, including in trade, the international institution established to oversee trade is increasingly shunted to the sidelines.

The G20 leaders acknowledged the importance of trade to addressing the pandemic in their statement at the conclusion of their emergency video conference on March 26. They promised to use “all available policy tools to minimize the economic and social damage from the pandemic.” Shockingly, however, they neglected to refer by name to the only global institutional tool they have for achieving that goal in trade. Six other international institutions were specifically cited – but not the WTO.

The World Trade Organization predicts that the world economy may enter a grave recession.

Going into this global fight for survival, the WTO was already badly damaged by the corrosive combination of Trumpian unilateralism and intensifying global economic nationalism. Now, because of the coronavirus, all WTO meetings have been suspended until at least the end of April. Those who see the WTO as necessarily central to world trade are left wondering what its role is now and will be.

Among trade experts, ideas abound for using the WTO to help fight the pandemic. At the top of the list is the pressing need to roll back and refrain from export bans on medicines and medical supplies. While these measures, depending on how they are applied, may be legal under WTO rules, they are inconsistent with the G20’s aim to coordinate responses in ways that avoid unnecessary interference with international traffic and trade. They prevent limited drugs and supplies from going to where they are most needed to conduct an effective coordinated global fight against the global virus, especially in the poorest countries where the outbreak may ultimately be the worst.

Making common sense, also, is an immediate end worldwide to all tariffs on imports of drugs and medical equipment. Many countries still impose import taxes on a whole range of medical-related goods that are needed everywhere during this pandemic. All countries must import at least some of these goods. No one country can produce all of these goods in the amounts they may eventually need. Tariffs rarely make sense, and these border taxes on imports of life-saving goods may make the least sense of all.

Other worthy ideas for WTO action that have been suggested include: promoting transparency in all national measures taken to fight the virus; waiving the “buy local” requirements that inflate the prices of government purchases in much of the world; improving trade facilitation to reduce the red tape costs for trading health-related products; eliminating non-tariff barriers that hinder trade in medicines and medical equipment; adopting international standards to help ensure the safety and quality of imported medical goods; giving the go-ahead to subsidies for producing the new medicines urgently needed to stop the coronavirus; reaffirming that WTO rules permit compulsory licensing of needed medicines by developing countries in these dire circumstances; and permitting health care workers to move more easily across borders.

Because the WTO operates by consensus, it can only act if all its members cooperate in deciding it should act. Quite rightly, the WTO is an entirely member-driven institution. As it stands, though, the members of the WTO are not driving it anywhere during the global crisis of this pandemic.

More than half a century in the making, the WTO was established 25 years ago to provide global solutions in trade, including in times such as these. The G20 leaders say that the virus knows no borders and this transcendence of borders includes the interrelationships between the virus and trade. In trade, as in all else, G20 leaders are right in thinking “a united front against this common threat” is needed.

Unavoidably, the WTO has postponed its biennial ministerial conference that had been planned for Kazakhstan in June. Yet, even with social distancing, self-isolation, and quarantines, WTO members can return the organization to its rightful central role in world trade by pursuing these and other ideas for global solutions. They should begin by convening a virtual ministerial conference on how best to use trade to help defeat the coronavirus.

James Bacchus is director of the Center for Global Economic and Environmental Opportunity at the University of Central Florida.