COVID-19 and NTMs

Governments across the world resorted to the use of trade measures to respond to the various challenges and pressures created by the COVID-19 pandemic. Both tariff and non-tariff measures were applied by over 140 countries: some that facilitated trade and some trade restricted it.

The use of NTMs was in particular was noticeable with around 280 NTMs being applied. Majority of these NTMs were designed to serve legitimate policy objectives: to ensure adequate supplies of essential food and medical products; to ensure quality and safety of imported and exported medical goods or to avoid entry of potential carriers of the disease into the territory of the country. Some NTMs were also imposed in pursuit of economic objectives like safeguarding local industries and jobs. In aggregate, these measures had both positive and negative implications for trade during the pandemic.

Commonly used NTMs

Trade Facilitating Measures

Trade Restricting Measures

L41* Tax and duty exemptions, reductions, other fiscal incentives reducing burden of taxes otherwise due

P31 Export prohibition

G4 Regulations concerning terms of payment for imports

P33 Licensing, permit or registration requirements to export

E125* Licensing for the protection of public health

A11 Prohibitions for SPS (sanitary and phytosanitary) reasons

A83* Certification requirements for SPS (sanitary and phytosanitary) reasons

E313 Temporary prohibition, including suspension of issuance of licenses

L11 Transfers of funds (monetary transfers) by the Government (to an enterprise) – Grants

P32 Export quotas

D12* Anti-dumping duties

P22 Export monitoring and surveillance requirements

B83* Certification requirements for TBT (technical barriers to trade) reasons

E325 Prohibition for the protection of public health

L9 Support for consumers or producers not elsewhere specified

C9 Other pre-shipment inspection formalities not elsewhere specified

E325 Prohibition for the protection of public health

B14 Authorization requirements for importing certain products TBT (technical barriers to trade) reasons

B7* Product quality, safety, or performance requirements for TBT (technical barriers to trade) reasons

 

B14* Authorization requirements for importing certain products TBT (technical barriers to trade) reasons

 

* Measures relaxed to facilitate trade

Implications for Trade

Many measures such as exemptions from duties and taxes (L41); relaxation of SPS requirements (A83, B7, B14 and B83) and easing of non-automatic licensing requirements (E125) on imported medical supplies helped expedite trade of such goods, thus ensuring adequate supplies for the source country.

On the other hand, use of export prohibitions (P31); export quotas (P32); licensing, permit or registration requirements to export (P33) on medical supplies negatively affected trade and hence the availability of essential goods in import-dependent countries, particularly the most vulnerable ones. These measures, often imposed without coordination with trading partners disrupted global value chains, further impeding smooth flow of trade in critical goods.

Some measures like export monitoring and surveillance requirements (P22) helped ensure that the exported product was safe and of high quality. However, they also ended up delaying exports due to the additional inspections and checks imposed.