Contrary to the current dominant narrative, the global trade system has responded impressively to the COVID-19 pandemic. It’s time to acknowledge this.
The milestones are passing almost without notice. Two billion vaccines against the COVID-19 virus have been administered globally. While there is no doubt there have been problems – not least that the distribution has not been equitable between countries – we have never seen a vaccine deployment at this scale and speed before. The same could be said of personal protective equipment, in which we have seen a dramatic increase in supply to meet demand.
The supply of vaccines is not a simple process. Numerous inputs and processes – including across multiple borders – are required to create and deploy safe products.
Those of us who see trade as a positive thing should feel vindicated. But that isn’t what is happening. Of course the fight against COVID-19 is ongoing, but there have been few suggestions from public figures that trade is playing a positive role.
If anything trade and the existing rule set is being seen as more of a problem than a solution.
Discussions at the WTO over a potential TRIPS waiver for COVID-19 vaccines present the existing rule-book as a problem. India and South Africa have been pushing this issue for some time, but their latest proposal to fellow members of the world trade institutions would seem to go too far for a United States that indicated some support for the idea. It certainly goes too far for the EU. It seems increasingly likely that events on the ground will overtake these discussions.
This pattern will continue in other trade policy areas if we consider for example the way e-commerce is globally established in practice with no accompanying WTO provisions. More worryingly, it will mean the focus is once again on struggling negotiations, not successful trade stories.
Global supply chains come of age
The deployment of COVID-19 vaccines has not, of course, been a seamless process. The EU have spent a considerable amount of time engaging in public disputes with the firm Astra Zeneca over promised supplies. The European Union, the United Kingdom and the United States have in reality had processes to restrict exports, though often claiming otherwise. More recently India’s deadly wave saw serious questions raised about their production and exports of medical supplies and vaccines to the rest of the world.
Similarly there were many problems in the early days of fighting the pandemic with the supply of personal protective equipment and other medicines and equipment required. These appear to have dissipated over time in most countries, though resurfaced as a major concern recently in India.
The pandemic also seems to have contributed to recent problems in the global shipping sector, as ports became full with related shipments, and costs rose.
Yet the sheer fact is that the global goods market responded – quickly – to the pandemic.
There have been no general shortages of goods in any developed country, and responses to specific shortages within weeks. Vaccine supply chains were constructed at great speed.
It sometimes seems that European politicians discovered global supply chains this year with vaccine supply problems, and decided they could do better, and create more domestic jobs. While one shouldn’t rule out that possibility, there is no guarantee that reliance on domestic supply would have been better, and every likelihood it would have been worse.
The largely ignored role of services
The impact of the pandemic has arguably been greater for services than for goods trade. Entire sectors had to be reimagined as travel between and even within countries became more difficult. Whether universities, culture or business services: there was a huge impact on international trade, only some of which has been alleviated to date.
Yet services trade, like that for goods, did continue through the pandemic. More work was done remotely, transportation options changed, and online services thrived.
More pertinently, trade in areas such as research and development proved just as important as goods trade in defeating COVID-19.
The development of vaccines has been an international effort, with numerous examples of collaboration across borders. Many politicians probably don’t even realise that this constitutes international trade.
The sheer diversity of services trade is rarely recognised, with finance, ICT, and other business services typically taking most of the attention along with free flows of data.
The fight against COVID-19 would be a good time to start setting this right.
Protecting trade means celebrating success
Whether in the US, UK or EU we can see that this is a time of more focus on national success than international cooperation. In this narrative the COVID-19 pandemic has demonstrated the need for national resilience, and national efforts like vaccine procurement are to be celebrated.
Politicians may talk in the abstract about the contribution trade can make, but have not linked this to the fight against COVID-19.
The recent statement of G7 trade ministers sees trade delivering in the future, but not the present.
The successful response of the operational international trade system to the COVID-19 pandemic has been inconvenient to politicians. It hasn’t been particularly good either for those who would wish to see the WTO at the centre of such a system either, as the institution clearly hasn’t been. Rather it has been the network of companies large and small, individuals in different organisations, a dense web of connections, and no doubt considerable public money, which has delivered.
It remains to be seen whether any governments, or those companies, will say that free trade has delivered a good response to the pandemic. At this stage it seems unlikely: this would be a huge missed opportunity. For it would be hard to think of a better demonstration of the positive role of international trade to global health.
Expressing theoretical support for trade is easy. It is however an empty statement if that support does not include the response to the greatest global crisis our generation has known.
It is time for the genuine supporters of free trade to establish a different narrative if they want protectionist action and rhetoric to be avoided.
David Henig runs the column ‘Perspectives’ on the politics of global trade for Borderlex. He is also a UK director at the think tank ECIPE.
Views expressed by columnists at Borderlex are strictly their own.