My thanks to Saudi Arabia as President of the G20 for organizing this event to collect Policy Recommendations for a Post-COVID 19 World and for inviting the WTO to participate.

During the pandemic, the WTO has fulfilled a number of key functions:

  • FIRST, it has gathered notifications of COVID-19 related trade measures from individual Members and made them available to all Members and to the public. 
  • SECOND, it has issued its Trade Forecast estimating both the depth of the downturn of trade and the timing of the recovery. 

Both of these activities allowed Members to make their own policy decisions on the basis of important information.

  • THIRD, it has provided a forum for Members to share proposals and consider potential collective responses to the pandemic.

Fortunately, the number autonomous trade liberalizing measures introduced by individual Members, both in terms of removing tariffs and easing entry for critical supplies, have outnumbered export restrictions.  In addition, export restrictions on food have already in many cases been rolled back and terminated. 

This is not to suggest that the multilateral trading system could not do more to limit harms to trade and the global economy in the future.  Far from it.  There will likely still be challenges for the duration of the pandemic.  In 1918, the flu epidemic claimed 50 million lives and came in three waves, the worst of which was the second.  One can foresee the potential for an upcoming challenge due to limited availability of vaccines, once developed, and the equities of sharing those supplies. 

In addition, there is a question that should be addressed as to how best the trading system can aid in the needed economic recovery.

What is clearly deserving of attention are the following two imperatives:

  • Where the current rules are least prescriptive, they should be strengthened. 
  • Where collective action would be helpful, it should occur.

A logical next step would be to build on the initiatives led by Korea, Canada, Singapore, New Zealand and Switzerland, as well as the Ottawa Group and the Cairns Group, to give coherent direction for the crafting of national trade policies.

Some specific suggestions that have been made include the following:

  • A major effort can be undertaken to increase transparency.  Member notifications can be supplemented by enhanced monitoring and reporting of measures by the Secretariat.
  • There is little guidance in the WTO rules as to the appropriate use of export controls where it is felt that there exists short supply. Further guidance could be crafted.  Sometimes the existence of extensive policy space is contrary to the common interests of all.
  • Government interventions to procure needed supplies reduce the scope for market forces to determine competitive outcomes.  A number of the practices witnessed in the last three months in response to the pandemic are not explicitly regulated by the current WTO rules.  Included under this heading would be subsidization conditioned on supplying the domestic market, and pre-emptive government purchasing and investment.  Additional disciplines could be considered.
  • Leaving the allocation of scarce necessities solely to market forces may also not be a completely satisfactory alternative if the poorest countries are priced out of participation.
  • Consideration can be given to agreeing, as in the WTO Agreement on Agriculture, to require that a country planning to impose an export restriction consider the effect on others of applying the measure. 
  • Additional provisions could provide for prior notice before export restrictions are put into place and a commitment to engage in timely consultations.
  • Consideration can be given to including in any restrictions a sunset clause and providing for a roll-back of current trade restrictions.
  • Multilaterally-agreed guidance could be given for the sharing of scarce medical supplies, including vaccines.
  • Concerted efforts could be made to have relevant tariff liberalization, not just for medical goods, equipment and pharmaceuticals, but more broadly.
  • Consideration can be given to creating, a Members’ Emergency Task Force or other mechanism to flesh out options for consideration by Members. 
  • Where options are devised by groups of Members, an effort and process are needed to gain broader Member support for their recommendations and to assure implementation of concrete steps forward.
  • A Long-Range Policy Planning Network for the Multilateral Trading System could be created.  There is insufficient attention paid to assessing the future needs of the multilateral trading system, in part due to the daily need to deal with current challenges.

For the recovery, there are at least three immediately identifiable ways in which the multilateral trading system can contribute.  Consideration can be given to:

  • Lowering the costs of trade by lowering tariffs and other impediments to trade broadly;
  •  Engaging in a collective effort to accelerate the implementation of the Trade Facilitation Agreement, and
  • Working with international financial institutions and banks to foster the restoration of trade finance.

The multilateral trading system is uniquely positioned to provide a forum for meeting global challenges.  Subsidies disciplines cannot be limited to bilateral agreements and still be sufficiently effective.  Bilateral agreements on sharing scarce medical supplies would only further erode the principle of nondiscrimination upon which the trading system was founded.

I do not believe that the multilateral trading system is about to fail, but it obviously needs improvement.  While it is understandable to focus on where the rules are inadequate, this should not be to the exclusion of understanding the value of what the rules currently provide.  Most of world trade is conducted based on the WTO rules, not through regional or bilateral trade agreements, or pursuant to unilateral actions.  The task ahead is to take what we have and to make it better.

I do not believe that the trading nations of the world will retreat very far into policies of autarchy.  To be sure, there will be some re-shoring of medical production, some stockpiling of medical supplies and pharmaceuticals, and some additional diversification of foreign sources of supply.  But complete self-sufficiency has economic limits and other practical limits and is unnecessary.  Mutual commitments of openness to trade is a more effective solution than the unilateral closing of borders both to meet the objective of food security as well as to assure necessary stocks of emergency medical supplies and equipment to deal with this pandemic and future crises. 

The WTO is about promoting global well-being and that includes development.  Growing international trade can benefit all nations.  Building capacity allows developing countries ultimately to enjoy all the benefits of the trading system and to be in a position to fulfill all the system’s obligations.

The multilateral trading system must aspire to universality.  Having those nations which are still outside the WTO accede to the WTO should be an objective for all. 

I am sanguine but realistic about challenges to the multilateral trading system.  Populism and nationalism, and over-reliance on bilateral approaches, will not in the long run prevail over wider cooperation. 

The crisis of the pandemic provides an opportunity for understanding better what we have and what we need with respect to the multilateral trading system, to improve its relevance and its resilience. 



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