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The International Monetary Fund (IMF) and the World Trade Organisation (WTO) warned on Friday (April 24) that export restrictions on medical supplies and food “can be dangerously counterproductive”, as countries grapple with the coronavirus pandemic.
In a joint statement urging caution on such restrictions, the two organisations also said they were concerned by the decline of trade financing needed to ensure that food and medical supply imports get to the countries that need them most.
The IMF and WTO said export restrictions “disrupt supply chains, depress production, and misdirect scarce, critical products and workers away from where they are most needed. Other governments counter with their own restrictions.”
The two institutions called on global leaders to commit to refraining from imposing or tightening controls on product sales, as they did at the height of the 2008 global financial crisis.
“We are concerned by supply disruptions from the growing use of export restrictions and other actions that limit trade of key medical supplies and food,” the institutions said.
And they noted that poor and otherwise vulnerable countries would likely suffer the most.
During the last global recession, the G-20 pledge “helped to avoid widespread trade restrictions that would have worsened the crisis and delayed recovery – just as trade restrictions deepened and prolonged the Great Depression of the 1930’s”, the statement said.
While global trade rules allow the use of export restrictions during a national emergency, the IMF and WTO warn that “what makes sense in an isolated emergency can be severely damaging in a global crisis”.
“Taken collectively, export restrictions can be dangerously counterproductive,” the statement added.
The IMF and WTO welcomed moves by some nations to ease trade in products needed for the battle against Covid-19, including cutting import duties.
Last year, global imports of crucial goods needed in the fight against the coronavirus, such as face masks and gloves, hand soap and sanitizer, protective gear, oxygen masks, ventilators, and pulse oximeters, totaled nearly US$300 billion (S$428 billion).