The last year has been one of the most challenging times on record for world trade, with economies around the globe affected by the impact of COVID-19. However, despite fears that many countries would react to this by implementing restrictive and protectionist trade policies, this has not happened.
In fact, a new report from the World Trade Organization (WTO) has claimed that in reality, the international systems that govern trade have helped keep goods flowing and laid the groundwork for a strong recovery.
G20 members avoid protectionism
The report found that trade policy restraint by countries around the world, but especially the G20 group of developed nations, has prevented the implementation of measures that would have led to further suppression of global trade and longer-lasting, deeper damage to the world economy.
Director-general of the body Ngozi Okonjo-Iwaela said: "The multilateral trading system has again proven its value. As was the case during the global financial crisis more than a decade ago, the system has been a solid and effective bulwark against any acceleration of protectionism as we face the worst economic and health crisis in generations."
The 25th WTO Trade Monitoring Report, which covers the period from mid-October 2020 to mid-May 2021, revealed that since the outbreak of the pandemic, G20 countries implemented 140 trade measures related to goods. Of these, 101 (72 percent) were of a trade-facilitating nature and 39 (28 percent) were considered to be trade-restrictive.
When it comes to enabling trade, 60 percent of measures taken involved the removal or reduction of import tariffs and taxes. Meanwhile, more than 90 percent of restrictive measures related to export bans.
As trading conditions have eased, some of these measures have begun to be repealed. The WTO noted 22 percent of COVID-19 trade-facilitating measures by G20 economies and 49 percent of the COVID-19 trade-restrictive measures had been terminated as of mid-May.
However, the WTO did note that in terms of trade coverage, the value of trade-restrictive measures still in force ($98.8 billion) was slightly higher than that of trade-facilitating ($96.5 billion), suggesting that the rollback of trade-facilitating measures has been swifter than the repeal of more restrictive regulations.
The report also highlighted that the multilateral trading system has kept trade flowing, stating that the WTO has played "a central role in ensuring that supply chains are kept open and restrictive trade policies are avoided".
Trade in medical supplies vital to recovery
However, the WTO did warn that there remain obstacles in place that could undermine global efforts at trade recovery. In particular, work to diversify the production of critical medical supplies such as vaccines, and ensure these products can easily get to where they are most needed, will be an ongoing challenge.
Ms Okonjo-Iwaela said: "As the world struggles to overcome the enormous human, economic and social impact of the pandemic, we must not be complacent. Trade recovery will not be sustainable unless vaccine equity is assured."
She stated that "vaccine policy is trade policy" and will be vital in preventing a resurgence of the pandemic, which would in turn "significantly jeopardize" the global trade recovery. The director-general added that the leadership of the G20 will be vital in underpinning a return to strong, sustainable growth.
The report warned that production of vaccines has been slow and distribution uneven, which has contributed to "significant disparities in access" for these vital medical supplies. Low-income nations are particularly struggling to obtain enough doses to meet the needs of their populations.
"G20 economies have more work to do to ensure the free flow of the medical inputs and supplies critical to saving lives," Ms Okonjo-Iwaela said. "Trade restrictions hamper our efforts to ramp up production, particularly in the developing world, and ensure the equitable distribution of vaccines."