WTO Report on Global Trade in Medical Products
WTO Report on Global Trade in COVID-19 Medical Products
The WTO Secretariat has released a new report on trade in medical products critical for the global response to the COVID-19 pandemic. The report traces trade flows for products such as personal protective products, hospital and laboratory supplies, medicines, and medical technology while providing information on their respective tariffs.
Trade in medical products, which have now been described as critical and in severe shortage during the COVID-19 crisis, totaled about US$ 597 billion in 2019, accounting for 1.7% of total world merchandise trade, according to the report. The ten largest supplying economies accounted for almost three-quarters of total world exports of the products, while the ten largest buyers accounted for roughly two-thirds of world imports.
Commitments made under various WTO negotiations and agreements have helped slash import tariffs on these products and improve market access, with the average tariff on COVID-19 medical products standing at 4.8%, lower than the 7.6% average tariff for non-agricultural products in general. The statistics show that 52% of 134 WTO members impose a tariff of 5% or lower on medical products. Among them, four members do not levy any tariffs at all: Hong Kong, China; Iceland; Macao, China; and Singapore. The report, however, also identifies markets where tariffs remain high. Tariffs on face masks, for example, can be as high as 55% in some countries.
Key Points
- Germany, the United States, and Switzerland supply 35% of medical products.
- China, Germany, and the United States export 40% of personal protective products.
- Imports and exports of medical products totaled about US$ 2 trillion, including intra-EU trade, which represented approximately 5% of total world merchandise trade in 2019.
- Trade of products described as critical and in severe shortage in the COVID-19 crisis totaled about US$ 597 billion, or 1.7% of total world trade in 2019.
- Tariffs on some products remain very high. For example, the average applied tariff for hand soap is 17%, and some WTO members apply tariffs as high as 65%.
- Protective supplies used in the fight against COVID-19 attract an average tariff of 11.5% and go as high as 27% in some countries.
- The WTO has contributed to the liberalization of trade in medical products in three main ways:
- The results of tariff negotiations scheduled at the inception of the WTO in 1995.
- Conclusion of the plurilateral sectoral Agreement on Pharmaceutical Products (“Pharma Agreement”) in the Uruguay Round and its four subsequent reviews.
- The Expansion of the Information Technology Agreement in 2015.
Notes
- Those products include computer tomography apparatus; disinfectants/sterilization products; face masks; gloves; hand soap and sanitizer; patient monitors and pulse oximeters; protective spectacles and visors; sterilizers; syringes; thermometers; ultrasonic scanning apparatus; ventilators, oxygen masks; X-ray equipment; and other medical devices. They are frequently mentioned by countries and international organizations and in news reports as the goods in short supply.
Source: www.wto.org
WTO Members and Trade Restrictions on Medical Products
It is important to note that trade plays an important role in ensuring the availability and affordability of vital medicines, medical products, and healthcare services, particularly among its most vulnerable members. International trade is crucial to ensuring access to medicines and other medical products – no country is entirely self-reliant for the products and equipment it needs for its public health systems.
That said, each WTO member is free to determine what is necessary to protect its citizens and take the measures it deems appropriate. In general, WTO rules provide broad space for members to adopt trade measures deemed necessary to protect public health and public welfare (including import and export bans, quantitative restrictions on imports and exports, and non-automatic import licensing). These measures should be applied in a manner that does not discriminate between WTO members and should not constitute a disguised restriction on international trade.
The general exceptions are set out under two of the WTO’s cornerstone agreements – the General Agreement on Tariffs and Trade (GATT) 1994 and the General Agreement on Trade in Services (GATS).
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) also provides members with flexibilities to ensure that life-saving drugs are available and affordable for their citizens. Among other tools, governments can use WTO-compliant compulsory licensing procedures in cases where patented drugs have been unaffordable or not widely available. Voluntary licensing of patents and pooling of intellectual property for different drugs or medical technologies are additional options within the scope of WTO rules.
In addition, two WTO agreements address measures adopted by members to protect public health or public safety – the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) and the Agreement on Technical Barriers to Trade (TBT Agreement).
The SPS Agreement establishes that members have the right to restrict trade by taking SPS measures necessary for the protection of human, animal, or plant life or health. These measures should only be applied to the extent necessary to achieve their objectives, be based on scientific principles, and be supported by scientific evidence. In situations where relevant scientific evidence is insufficient, members may provisionally adopt SPS measures based on available pertinent information.
The TBT Agreement aims to ensure that technical regulations, standards, and conformity assessment procedures are non-discriminatory and do not create unnecessary obstacles to trade. At the same time, it recognizes WTO members’ right to implement measures to achieve legitimate policy objectives, such as the protection of human health and safety.
Both the SPS and TBT agreements require WTO members to notify others of any new or changed requirements which affect trade and to respond to requests for information on new or existing measures.
Source: www.wto.org