WTO Members Slap 98 Restrictions in Covid Times

· WCO Complains that only One Proposal for Classification Received, HS2027 Revision is On

Members welcomed the latest update on export restrictions and prohibitions and trade-easing measures relating to the COVID-19 pandemic, which was presented by the WTO Secretariat at a meeting of the Committee on Market Access on 30-31 March. The Committee also heard about the first experience-sharing session on COVID-19-related goods, where members sought to better understand how they define lists of “essential goods” to combat the pandemic and the challenges they face with tariff classification.

The WTO Secretariat presented a revised report that compiles and summarizes relevant information on export prohibitions and restrictions that have been notified by members under the 2012 Decision on Notification Procedures for Quantitative Restrictions (QR Decision), the voluntary communications submitted by members to the Committee with information on trade-easing measures as well as other measures by WTO members collected under the WTO's Trade Monitoring Exercise and listed in “COVID-19: Measures affecting trade in goods”.

The report indicates that as of 25 March 2022, a total of 98 measures that prohibit or restrict exports as a result of the COVID-19 pandemic have been adopted by members. These measures have either been formally notified as a quantitative restriction or recorded by the WTO's Trade Monitoring Exercise.

The majority of the 98 export-restrictive measures in response to COVID-19 have taken the form of full bans and prohibitions (36%), followed by export restrictions in the form of non-automatic export licences (18%) and other measures. Most of these measures were introduced between January and April 2020, which coincides with the declaration of a pandemic by the World Health Organization (11 March 2020) and the consequent lockdowns and other health measures.

The types of products restricted for exports changed slightly during the pandemic. For example, personal protective equipment and sanitizers and disinfectants are less restricted for exports in 2022 compared to 2020. However, some products (pharmaceuticals, medical devices and equipment, other medical supplies, COVID-19 test kits and vaccines) appear to be almost as restricted as they were during the first six months of 2020, suggesting that global shortages in these products persist.

With regard to trade-easing measures, as of 25 March 2022 a total of 169 measures are recorded. Twenty-six communications have been submitted to the Committee by 14 members, even though there is no obligation to notify such measures. The majority of these measures (more than 70%) are tax-related measures that aim to reduce the price of critical imports.

Members stressed that the various reports produced so far by the WTO Secretariat have been very useful. The reports also underlined the importance of transparency, one of the main WTO principles. Some members expressed concern about the significant number of measures not notified and the lack of clarity about the duration of some of these measures. The chair of the Committee, Mr Chakarin Komolsiri, called on members to provide this information so that the Secretariat can prepare a more comprehensive and accurate analysis in the next revision.

In addition, a preliminary analysis on the impact of export restrictions on trade was presented by the WTO Secretariat. Many of the export restrictions were enforced in March/April 2020, a period marked by major global supply and demand shocks as well as transportation disruptions. Untangling these effects was a complex undertaking. It was further noted that more granular data would be required to do a more extensive analysis.

Under the agenda item on quantitative restrictions, Ukraine shared with members a notification dated 25 March, which indicates that “due to Russia's military invasion of Ukraine on February 24, 2022, the Government of Ukraine was forced to introduce export restriction measures on certain products in order to ensure national food security.” The United States also notified import and export prohibitions on certain goods with regards to the Russian Federation.

Many members took the floor to express their strong opposition to the invasion of Ukraine. The Russian delegate responded by saying that the WTO was not the proper venue for a discussion of this nature.

Experience-sharing session

The chair reported on the first experience-sharing session on trade in COVID-19 related goods held on 4 March, where members exchanged views and identified the main lessons learnt from the pandemic in order to get better prepared for future challenges.

Representatives from six members participated as speakers, namely Canada, China, Ecuador, the European Union, Singapore and the United Kingdom. Several other members participated in the discussion by sharing their experiences at the meeting or by requesting the Secretariat to circulate written communications afterwards. The Secretariat summarized the discussions in a report, which also highlights the main lessons learnt (JOB/MA/152).

Members agreed on the value of this exercise and looked forward to the three additional experience-sharing sessions scheduled to cover other topics of interest. Tentative dates have been scheduled:

26 April 2022: to discuss how members have monitored and measured trade in essential goods to combat the pandemic, including through the creation of national tariff lines or statistical breakouts

20 June 2002: to focus on members' practices in relation to measures aimed at easing trade under the purview of the Committee, including tariff suspension, reduction or elimination

16 September 2022: to discuss how to improve transparency in export restrictions and share experiences with respect to the choices underpinning the use of such restrictions.

Uruguay Round derestriction

Following the discussion initiated at the Committee in January 2021, members agreed in principle to the overall derestriction process of the Uruguay Round negotiating material. However, some members requested more time to review the documents.

The chair recalled that the objective of the derestriction is to enhance transparency, in line with the WTO's efforts in this regard, and to make available to the public documents and materials of historical and research value. At the same time, he stressed that members would have the right to decide if certain information should remain restricted.

The bilateral negotiating materials of seven rounds of negotiations under the General Agreement on Tariffs and Trade (GATT) have already been derestricted and, at present, only the bilateral negotiating materials of the Uruguay Round remain restricted.

World Customs Organization

A representative of the World Customs Organization (WCO) addressed some of the challenges faced by members with the tariff classification of COVID-19 essential goods due to the lack of specificity and ambiguity in the Harmonized System (HS). She noted that the HS is member-driven and proposals for classifications are meant to come from members or intergovernmental organizations (IGOs) representing members. So far, the WCO had received just one proposal to specify the classification of medical goods.

The WCO indicated that the HS review cycle was close to finishing, so if proposals did not arrive in the next few months the prospects for addressing the lack of specificity for critical medical products in the next version of the nomenclature (HS 2027) and to be better prepared to handle future health emergencies would be limited. She encouraged trade policy makers and health authorities to work in collaboration with customs administrations to prepare the inputs needed for the HS 2027 to address the issues identified during the pandemic.

Trade concerns

The Committee addressed 18 trade concerns, new and previously raised, including:

Sri Lanka's import ban on various products, raised by Australia, the European Union and Thailand

Sri Lanka's import on palm oil, raised by Indonesia

Angola's import-restricting practices, raised by the European Union and the United States

Canada's restriction on the commercial importation of cannabis and cannabis products for medical use, raised by Colombia

China's trade-disruptive and restrictive measures, raised by Australia

The European Union's carbon border adjustment mechanism, raised by the Russian Federation and Indonesia

The selective tax on certain imported products by Saudi Arabia, Bahrain, the United Arab Emirates, Oman and Qatar, raised by the European Union, Switzerland and the United States

India's import policies on tyres, raised by the European Union, Indonesia, Chinese Taipei and Thailand

India's import restriction on air conditioners, raised by Japan and Thailand

India's plain copier paper quality order 2020, raised by Indonesia

India's quantitative restrictions on imports of certain pulses, raised by Australia, Canada, the European Union and the United States

Indonesia's import substitution programme, raised by the European Union

Indonesia's customs duties on certain telecommunication products, raised by the European Union and the United States

Mexico's import quota on glyphosate, raised by the United States

Nepal's import ban on energy drinks, raised by Thailand

Peru's tax treatment of pisco, raised by the United Kingdom

The Philippines' special safeguard on instant coffee, raised by Indonesia

The United States' quantitative restriction on steel and/or aluminium imports, raised by China

Next meetings

The next formal meeting of the Committee is currently scheduled to take place on 18 and 19 October 2022. The next informal meetings for the Harmonized System (HS) multilateral review and other issues, as appropriate, are currently scheduled to take place on 27 June and 23 November 2022.