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1 1 (May 15, 2020)

handle is hein.crs/govdamj0001 and id is 1 raw text is: .........SE ;0r h,&. , , May 15, 2020 Export Restrictions in Response to the COVID-19 Pandemic In response to the COVID-19 pandemic, countries all over the world, including the United States, have imposed temporary restrictions on exports of certain medical goods and some foodstuffs in order to mitigate potential shortages of key supplies. Many measures are not explicit bans, but vary from licensing requirements to mandates for sales to the state. These restrictions have raised debate about the consistency of such actions with World Trade Organization (WTO) rules and the potential impact on the global trading system. Some markets depend heavily on countries that have implemented restrictions. Most leading exporters are also major importers of critical supplies, with integrated supply chains at risk. The proliferation of such measures has prompted some countries to commit to limit restrictions or to abide by certain principles in their temporary application. Members of Congress have weighed in on both sides of the issue, both in terms of the immediate disruption from COVID-19, but also on the future of supply chains. T 0 ,es In general, WTO agreements are flexible in permitting emergency measures related to national security or health that may contravene WTO obligations; they require, however, that such restrictions be targeted, temporary, and transparent, and do not unnecessarily restrict trade. Article XI of the 1994 General Agreement on Tariffs and Trade (GATT) broadly prohibits export bans and restrictions, other than duties, taxes or other charges. However, it allows members to apply restrictions temporarily to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting country, among other circumstances. In the case of foodstuffs, the WTO Agreement on Agriculture requires members to give due consideration to the effects on food security of importing countries. In addition, general exceptions (e.g., GATT Article XX) within WTO rules provide for policy flexibility, including to protect health, provided restrictions do not constitute a means of arbitrary or unjustifiable discrimination, or a disguised restriction on international trade, among other conditions. WTO leadership has emphasized the downside risks of curbs on exports and urged members to restrain their use and minimize disruptions to supply chains. The WTO has also called on members to abide by notification obligations and improve transparency on any trade-related measures taken in response to COVID-19. R\a e nt US.'15 A C vo,,-, In recent decades, restrictions on U.S. exports typically have been applied to defense articles, dual-use goods and technologies, crude oil, or sanctioned entities. On April 7, 2020, the Federal Emergency Management Agency (FEMA), pursuant to the Defense Production Act (DPA) and other authorities, issued a temporary final rule banning the export of certain personal protective equipment (PPE), including certain respirators, certain surgical masks, and certain medical gloves, without explicit approval from FEMA. The rule includes various exemptions, including exports of subject goods that are destined for either Canada or Mexico. The rule also requires FEMA to consider the need to minimize disruption to supply chains, the humanitarian impact of a restriction, as well as other diplomatic considerations. The ban applies to an estimated $1.1 billion of U.S. exports (Figure 1). Figure I. U.S. Imports and Exports of Goods now subject to FEMA's Temporary Export Restrictions U.S. imports M U.S. Exports .. .. .. .. .. .. ...... . .. ..... .. ..... .. . ..... .. ......... Respirato . .......... Surgical $O.l~b Masks 04 Source: U.S. Census Bureau, U.S. imports for consumption and U.S. exports for 2019. Based on HTS codes subject to FEMA restrictions. Advocates of the policy argue that the measure is necessary to prevent evasion of U.S. domestic anti-hoarding actions by exporting goods to markets where they can command higher prices. Furthermore, advocates contend, the measure is not an outright ban, but rather prioritizes American demand and grants FEMA the discretion to allow the export of excess goods. Critics note that the United States imports many more of the goods subject to the restriction than it exports, thus imperiling U.S. supplies of those goods should more of its major trading partners take similar actions (Figure 1). Moreover, the United States is a net importer of other kinds of PPE and critics worry that counter export restrictions by U.S. trading partners might quickly encompass other goods. Still others are concerned about the impact of such restrictions on countries in Latin America and the Caribbean, many of which rely on U.S. exports of the goods subject to restrictions. As one trade economist noted, Jamaica ... gets more than half of its total imports of respirators, masks, and gloves from the United States. By the end of April, at least 80 countries had introduced export restrictions as a result of the COViD-19 pandemic, according to the WTO. Since January 2020, countries have taken more than 117 actions banning or limiting the export of certain products, according to Global Trade Alert (Figure 2). The products covered by these export curbs vary, but have broadly fallen into two categories: medical goods (medical supplies, pharmaceuticals, and equipment) and foodstuffs. Getting an accurate picture of the total K~:> p\w -- , gnom goo mppm qq\ a , q 'S I 11LIANJILiN,

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