Around 80 countries limiting exports of face masks, other goods: WTO

New Delhi: Almost eighty countries and customs territories have banned or limited the export of face masks, protective gear, gloves and other goods to mitigate shortages since the coronavirus outbreak began, the World Trade Organization (WTO) said in a report.

The bans were imposed by 72 WTO members and eight non-WTO member countries, but only 13 members (or 39 if EU member states are counted individually) had notified the global trade body as required by its regulations, it said. At least two members have already removed some of those restrictions.

“The new export prohibitions and restrictions mostly cover medical supplies such as face masks, pharmaceuticals, ventilators and other medical equipment, the report finds. Some of the measures have extended the controls to other products such as food and toilet paper,” the multilateral trade organisation said.

Most of these have been described as temporary measures.

While WTO rules broadly prohibit export bans and restrictions, they allow members to apply them temporarily to prevent or relieve critical shortages of foodstuffs or other essential products.

If members move to restrict exports of foodstuffs temporarily, the Agreement on Agriculture requires them to give due consideration to the food security needs of others. WTO rules also contain more general exceptions, which could be used to justify restrictions provided that they do not constitute a means of arbitrary or unjustifiable discrimination between countries, or a disguised restriction on international trade.

Supply, transparency, cost concerns

Highlighting the costs that both importing and exporting economies will face in the long run, particularly in terms of lower supply and higher prices for much-needed products, WTO said that transparency at the multilateral level is lacking.

Export prohibitions and restrictions applied by large exporters may in the short run lower domestic prices for the goods in question and increase domestic availability.

“But the strategy is not costless: the measures reduce the world’s supply of the products concerned and importing countries without the capacity to manufacture these products suffer,” it said.

It also said that exporters too risk losing out in the long run. On the one hand, lower domestic prices will reduce the incentive to produce the good domestically, and the higher foreign price creates an incentive to smuggle it out of the country, both of which may reduce domestic availability of the product. On the other hand, restrictions initiated by one country may end-up triggering a domino effect.

If trade does not provide secure, predictable access to essential goods, countries may feel they have to close themselves from imports and pursue domestic production instead, even at much higher prices. Such a scenario would likely result in lower supply and higher prices for much-needed merchandise. The long-term effects could be significant.

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