G20 trade ministers pledge to focus on free, fair trade in coronavirus response
Trade ministers from the Group of 20 major economies agreed on Monday to keep their markets open and ensure the continued flow of vital medical supplies, equipment and other essential goods as the world battles the deadly coronavirus pandemic.
G20 leaders pledged last week to inject over $5 trillion into the global economy to limit job and income losses caused by border closures and sweeping shutdowns aimed at halting the spread of the disease.
The G20 Trade and Investment Ministers extraordinary meeting under Saudi Arabia Presidency pledged to take “immediate necessary measures” to facilitate trade in essential goods and incentivize additional production of equipment and drugs, according to a joint statement issued after a videoconference.
They said they agreed that all emergency measures should be “targeted, proportionate, transparent, and temporary,” consistent with the rules of the World Trade Organization (WTO) and not creating “unnecessary barriers” to trade.
They also vowed to work to prevent profiteering and unjustified price increases, and keep supplies flowing on an affordable and equitable basis.
“The pandemic is a global challenge and requires a coordinated global response,” the ministers said. “As we fight the pandemic both individually and collectively and seek to mitigate its impacts on international trade and investment, we will continue to work together to deliver a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open.”
The ministers emphasized the importance of transparency, and agreed to notify the WTO about any trade-related measures taken to keep global supply chains running. They said they would convene again as necessary.
However, they stopped short of explicitly calling for an end to export bans that many countries, including G20 members France, Germany and India, have enacted on drugs and medical supplies. The statement included the phrase “consistent with national requirements” already used by G20 leaders, which experts say provides a loophole for protectionist barriers.
Shortages and bottlenecks
Lack of protective medical gear is putting doctors and nurses at risk. Many countries rely on China, the source of the outbreak, for drug ingredients, and are now struggling to avoid shortages after lockdown measures prompted by the epidemic held up supplies and delayed shipments.
Supply chains are backing up as air freight capacity plunges and companies struggle to find truck drivers and shipping crews. Europe and the United States are short of tens of thousands of freight containers. Shippers struggle with crew shortages and quarantines at ports. Agriculture is also being disrupted.
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The ministerial video conference was attended by representatives from the World Health Organization, World Trade Organization and Organization for Economic Cooperation and Development.
G20 finance ministers and central bankers will also meet virtually, on Tuesday, for the second time in just over a week to continue coordinating their response, as worries grow about the debt crisis looming over poorer countries, three sources told Reuters.
Japan’s trade minister told counterparts at Monday’s meeting that the public and private sectors should try to avoid shutting supply networks to enable an early resumption of economic activities.
“It is extremely important to keep supplying medical and daily necessities internationally to overcome the crisis as well as to restore economic activities when the coronavirus outbreak comes to an end,” Hiroshi Kajiyama said in a statement.
Yousef Al-Benyan, chair of the Saudi Business 20, which engages the global business community, told Reuters that cross-border trade would be vital to economic recovery.
Each G20 state must “address their local requirements, but that should not compromise the good state of free trade globally, which will benefit everybody,” he said.
The coronavirus has infected nearly 738,500 people worldwide and killed some 35,000, and has already plunged the world into a global recession, according to IMF Managing Director Kristalina Georgieva.