October 22, 2020

The IMF and the WTO defend free trade in the fight against the COVID-19 pandemic



The International Monetary Fund (IMF) and the World Trade Organization (WTO) came out this Friday in defense of the policies of an open and free international trade for their important role in the fight against the coronavirus, the recovery of jobs and the strengthening of the world economic growth.

The COVID-19 pandemic, which has infected more than 2.7 million people and caused at least 192,000 deaths worldwide, has led to the suspension of a large part of economic activities and the imposition of barriers in the travel and trade between nations, both agencies recalled in a joint statement.

“We are particularly concerned about disruptions in supplies stemming from the increasing use of export restrictions and other actions that limit trade in medical items and food,” the note said.

According to the IMF and the WTO, “trade has made the availability of advanced medical products available worldwide at competitive prices.”

“Last year imports of crucial goods needed in the fight against COVID-19, such as masks and gloves, soap and hand sanitizer, protective suits, oxygen masks, respirators, and pulse meters and oxygen totaled $ 300 billion, “the statement said.

It is in recognition of “the importance of this trade that governments have adopted dozens of measures that facilitate the importation of medical products related to COVID-19, lowering tariffs, reducing customs procedures and shortening the granting of licenses and approvals” they added.

The WTO and IMF “commend these actions” but “similar attention should be given to facilitate exports of key items such as medicines, personal protective equipment and respirators.”

Anticipating the needs of governments to respond to crises in each country, “WTO rules allow the application of temporary export restrictions to prevent or alleviate critical shortages in the exporting country,” the statement recalled.

But the two organizations urged governments to exercise “extreme caution” in applying these measures, since “taken collectively, export restrictions can be dangerous and counterproductive.”

Another issue of concern to the IMF and the WTO is the decline in the flow of trade finance.

“Adequate trade finance is important to ensure that imports of essential food and medical equipment reach economies where they are most needed,” the statement said. “In addition to the restrictions on goods for medicine, limitations are beginning to appear on some food goods even though the supply remains strong.”

“Experience in the global financial crisis (2007-2009) showed that restrictions on food exports multiply rapidly across countries and lead to even greater uncertainties and price increases,” the two multi-lateral agencies finally added.

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