WASHINGTON, USA – The growing use of export restrictions by governments can be “dangerously counterproductive” as the world deals with the coronavirus pandemic, the International Monetary Fund (IMF) and World Trade Organization (WTO) warned on Friday, April 24.
The two institutions called on global leaders to commit to refrain 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 in a joint statement.
Disruptions to supply chains and misdirection of critical products could “prolong and exacerbate the health and economic crisis.”
And they warned that poor and otherwise vulnerable countries would likely suffer the most.
During the last global recession, the G20 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 1930s,” 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 said.
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 COVID-19, such as face masks and gloves, hand soap and sanitizer, protective gear, oxygen masks, ventilators, and pulse oximeters, totaled nearly $300 billion. – Rappler.com