Economy

Covid impact: Import curbs by WTO members covered goods worth $423 b

Our Bureau New Delhi | Updated on July 24, 2020 Published on July 24, 2020

Countries implement 256 trade-related measures of which, 165 were restrictive

Members of the World Trade Organisation (WTO) implemented 256 trade and trade-related measures explicitly linked to the Covid-19 pandemic by mid-May with a little more than half the measures of a trade facilitative nature, while the rest were restrictions in the form of export bans, according to a recent report.

The new import restrictions covered traded merchandise worth an estimated $423.1 billion, the third-highest value since October 2012, the WTO’s mid-year report on trade related developments pointed out.

“The report makes clear that a substantial share of world trade continues to be affected by new and accumulated import-restrictive measures, which is cause for concern at a time when economies will need trade to rebuild from the effects of the Covid-19 crisis,” said Director-General Roberto Azevêdo, who presented the report to WTO members, on Friday.

New measures

Between mid-October 2019 and mid-May, WTO members implemented 363 new trade and trade-related measures, 198 of them trade-facilitating and 165 trade-restrictive. As many as 256 (about 71 per cent) were linked to the pandemic.

WTO members notified a higher volume of standards and technical (SPS and TBT) measures compared to the previous period to restrict trade, with developing countries at the helm. From February 1 to May 15, 2020, 19 members notified 29 SPS measures and 14 members reported 53 TBT notifications taken in response to the pandemic, per the report. “These covered a wide range of products including personal protective equipment, medical equipment, medical supplies, medicines and food,” the report said.

The Covid-19 related measures seemed to have been undertaken in two distinct waves. “In the early stages of the pandemic, several of the measures introduced restricted the free flow of trade but as of mid-May 2020, 57 per cent of all measures were of a trade-facilitating nature. In early May, some members began to phase out export constraints, targeting products such as surgical masks, gloves, medicine and disinfectant,” the report said.

Import measures

Per WTO estimates for the second quarter of 2020, world trade was likely to drop 18 per cent compared to the same period the previous year. Members have also implemented trade-facilitating policies across sectors during the review period, with 51 new trade-facilitating measures not related to Covid-19 implemented. These measures mainly included the elimination or reduction of import tariffs, the elimination of import taxes, the simplification of customs procedures and the reduction of export duties.

The trade coverage of non-Covid import-facilitating measures was estimated at $739.4 billion, which is significantly higher than $544.7 billion recorded in the previous report (from mid-May to mid-October 2019) and represented the second-highest figure since October 2012.

Emergency support measures introduced by members which include grants, monetary, fiscal and financial measures, measures targeting micro, small and medium-sized enterprises (MSMEs), loans, credit guarantees and stimulus packages are under review, the report observed.

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Published on July 24, 2020
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