ATP RESEARCH > Trade in Medical Goods in the Context of Tackling COVID-19

Trade in Medical Goods in the Context of Tackling COVID-19

04/03/2020

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World Trade Organization

COVID-19 Global Value Chains Supply Chains Trade Agreements Trade Liberalization WTO

KEY POINTS:

  • Germany, the United States (US), and Switzerland supply 35% of medical products;

  • China, Germany and the US export 40% of personal protective products;

  • Imports and exports of medical products totaled about $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 COVID-19 crisis totaled about $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 goes as high as 27% in some countries;

  • The WTO has contributed to the liberalization of trade 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.

Introduction

The COVID-19 pandemic has brought considerable attention to trade in medical products, and specifically trade in products for prevention, testing and treatment.

The COVID-19 pandemic has spread to most countries and territories with hundreds of thousands of people infected, and a growing burden of fatalities. Understandably, governments are taking protective measures to stem the pandemic of the virus. Some of these measures may inadvertently impact the flow of critical medical goods across territories.

This study provides a comprehensive overview of trade and tariffs imposed on medical goods in general, many of which appear to be in severe shortage as a result of the current crisis. The purpose of this note is to provide factual information on how these goods are traded globally.

 

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