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Tactics to sell products internationally during the second wave of COVID-19.

In an extraordinary global health crisis, trade is essential to save lives and livelihoods; and international co-operation is required to keep trade flowing. In the midst of significant uncertainty, there are four things we can do:

  •  Boost confidence in trade and global markets by improving transparency about trade-related policy actions and intentions.
  •  Keep supply chains flowing, especially for essentials such as health supplies and food.
  •  Avoid making things worse, through unnecessary export restrictions and another trade barrier.
  •  Even in the midst of the crisis, think beyond the immediate. Government support today needs to be delivered in a way that ensures it serves the public interest, not vested interests, and avoids becoming tomorrow’s market distortions.

In a challenging and uncertain situation, trade is essential to save lives and livelihoods.

COVID-19 is a humanitarian crisis on a global scale. The virus continues to spread throughout the globe, placing health systems under extraordinary stress in the battle to save lives. A further challenge is uncertainty about COVID-19, including in terms of the scale and pace of infection; how long and widespread shutdown measures will prove necessary; the prospects for treatments to better manage symptoms, allowing health services to focus only on the most serious cases; and the risk of “second wave” infections as the virus moves around the globe. The virus is proceeding in waves, with countries succumbing – and set to recover – at different times. Against this background, there is a clear need to keep trade flowing, both to ensure the supply of essential products and to send a signal of confidence for the global economy. Trade is essential to save both lives and livelihoods. But keeping trade flowing requires co-operation and trust.

Despite considerable uncertainty, there are four actions that can be taken now:
  1. Boost confidence in trade and global markets by improving transparency:- A strong, shared, transparent information base is critical in underpinning sound national policy responses and the international co-operation to keep trade flowing. It will be critical that countries honor their commitments to notify trade-related measures taken in response to COVID-19 to the World Trade Organization.
  2. Keep global supply chains going, especially for essentials: – An important priority is keeping the key supply chains for essential goods for the crisis including medical supplies, food products, and ICT goods and services – open and functioning. However, we are starting to see a number of challenges to keeping these supply chains going related to the business of trade. Cancellation of passenger flights linked to travel bans has limited the availability of air cargo while urgent shipping of essential goods has increased demand, resulting in increases in the price of air cargo.  Over 50 countries have changed port protocols, ranging from port closure and quarantine measures to additional documentation requirements and examination.
    • Lockdowns are also impacting the availability of labor to unload ships at or raised costs due to increased protective measures for workers.
    • Speeding up border checks for medical products and food and minimizing the need for physical interaction between Customs and other border officials and traders at borders, by digitizing processes to the extent possible.
    • Making it cheaper and easier for people to stay connected to jobs, markets, and each other by reducing tariffs on information and communication technology goods and measures affecting access to digitally-enabled services.
    • Helping medical researchers co-operate on COVID-19 through enabling data flows.
  3. Avoid making things worse: – There are many unavoidable costs in the current pandemic; all the more reason to avoid actions that add to costs for traders and consumers. Chief among these is the need to avoid export restrictions on essential goods, such as medical equipment and, especially, food products. There is currently no supply problem in global agriculture and food markets; indeed, at present, stocks are strong and prices look set to stay low. However, if governments engage in export restrictions or if individuals, firms, or countries engage in panic buying or hoarding there is a risk of creating an avoidable problem now. The global market situation for medical supplies is very different; there is a critical need to increase the overall global supply of essential medical supplies for combating COVID-19 such as ventilators and masks. Governments need to invest urgently in boosting production capacity, including in co-operation with the private sector, for local, regional, and global markets. Indeed, areas already isolated due to the virus would have been worse off if they had to rely on the local economy to guarantee supplies of medical equipment, food, and other necessities and even those countries with production capacity in medical equipment have struggled to meet demand. Moreover, even domestic manufacture of equipment can rely on imported inputs. Transparency and global dialogue and co-operation are essential in building confidence in global supply. If export restrictions on medical supplies cannot be avoided entirely in the current political context, agreements to place strict conditions on their temporary use are vital.
  4. Look beyond the immediate:- Policy actions now could have a long life: – While countries are necessarily focused on ensuring the health and economic security of their people today, and, in light of past and current experiences, contribute to helping governments ensure a recovery that is robust, widespread, and sustainable. Some key issues and areas are highlighted below.
Despite considerable uncertainty, there are four actions that can be taken now:
  1. Boost confidence in trade and global markets by improving transparency:- A strong, shared, transparent information base is critical in underpinning sound national policy responses and the international co-operation to keep trade flowing. It will be critical that countries honor their commitments to notify trade-related measures taken in response to COVID-19 to the World Trade Organization.
  2. Keep global supply chains going, especially for essentials: – An important priority is keeping the key supply chains for essential goods for the crisis including medical supplies, food products and ICT goods and services – open and functioning. However, we are starting to see a number of challenges to keeping these supply chains going related to the business of trade. Cancellation of passenger flights linked to travel bans has limited the availability of air cargo while urgent shipping of essential goods has increased demand, resulting in increases in the price of air cargo.  Over 50 countries have changed port protocols, ranging from port closure and quarantine measures to additional documentation requirements and examination.
    • Lock downs are also impacting the availability of labor to unload ships at or raised costs due to increased protective measures for workers.
    • Speeding up border checks for medical products and food and minimizing the need for physical interaction between Customs and other border officials and traders at borders, by digitizing processes to the extent possible.
    • Making it cheaper and easier for people to stay connected to jobs, markets and each other by: reducing tariffs on information and communication technology goods and measures affecting access to digitally enabled services.
    • Helping medical researchers co-operate on COVID-19 through enabling data flows.
  3. Avoid making things worse: – There are many unavoidable costs in the current pandemic; all the more reason to avoid actions that add to costs for traders and consumers. Chief among these is the need to avoid export restrictions on essential goods, such as medical equipment and, especially, food products. There is currently no supply problem in global agriculture and food markets; indeed, at present, stocks are strong and prices look set to stay low. However, if governments engage in export restrictions or if individuals, firms or countries engage in panic buying or hoarding there is a risk of creating an avoidable problem now. The global market situation for medical supplies is very different; there is a critical need to increase the overall global supply of essential medical supplies for combating COVID-19 such as ventilators and masks. Governments need to invest urgently in boosting production capacity, including in co-operation with the private sector, for local, regional and global markets. Indeed, areas already isolated due to the virus would have been worse off if they had to rely on the local economy to guarantee supplies of medical equipment, food, and other necessities and even those countries with production capacity in medical equipment have struggled to meet demand. Moreover, even domestic manufacture of equipment can rely on imported inputs. Transparency and global dialogue and co-operation are essential in building confidence in global supply. If export restrictions on medical supplies cannot be avoided entirely in the current political context, agreements to place strict conditions on their temporary use are vital.
  4. Look beyond the immediate:- Policy actions now could have a long life: – While countries are necessarily focused on ensuring the health and economic security of their people today, and, in light of past and current experiences, contribute to helping governments ensure a recovery that is robust, widespread, and sustainable. Some key issues and areas are highlighted below.
How government support is designed matters.

Governments are necessarily and rightly providing huge amounts of support to prevent the COVID-19 crisis from destroying livelihoods, businesses, and production capacity. But once the waters ebb, governments will need to take a careful look at the measures in place to ensure that they have not become sources of unfair competition and distortions in the global economy. While this is tomorrow’s problem, the way such support is designed now will affect the shape of the global economy to come, and whether that economic benefits and is seen to benefit everyone. Support granted today will have an important impact on the global level playing field. Given that these tools will be important and widely used in the crisis equity positions, in particular, can be an effective way for governments to support ailing firms in the short term how governments approach this support, and its unwinding (or not) will be critical to the future shape of competition in the global economy. These elements are mutually reinforcing. The scale of public investments needed during and after the crisis – from health systems and social protection, to access to education and digital networks – underscores the need for support to firms and sectors to be as efficient as possible to maximize available public resources. There is a wealth of experience on minimizing the competitive distortions from support on which to draw, including in relation to government-invested firms.

Some key principles include that support granted is:
  • Transparent, including with regard to the terms of any support through the financial system;
  • Non-discriminatory amongst similarly affected firms and targeted at those experiencing the most disruption,while avoiding rescue for those who would have failed absent the pandemic;
  • Time bound& reviewed, and targeted at consumers, leaving them for to decide how to spend any support, rather than tied to consumption of specific input and final goods and services.
Doing more on trade and health to be ready for the next time:

The current crisis offers an opportunity to develop readiness for future pandemics. In addition to national measures to ensure supply, there may be scope for an international agreement to provide greater predictability and certainty on availability of key supplies in international markets and build confidence that trade will keep flowing to support the management of future pandemics. A possible agreement among countries could include elements such as:

  • Ensuring transparency.
  • Cutting tariffs on essential medical products .
  • Disciplines on export restrictions .
  • Upfront investments in co-operative solutions .
  • Addressing the requirements of the most vulnerable countries.

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