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1 [1] (April 23, 2021)

handle is hein.crs/govedbz0001 and id is 1 raw text is: C orn g r s io a R e e r h e v c Updated April 23, 2021 Export Restrictions in Response to the COVID-19 Pandemic Overview of Export Restrictions In response to the Coronavirus Disease 2019 (COVID-19) pandemic, countries all over the world, including the United States, imposed temporary restrictions on exports of certain medical goods and some foodstuffs in order to mitigate potential shortages of key supplies. According to the World Trade Organization (WTO), for G-20 countries, export bans accounted for more than 90% of trade restrictions related to the pandemic. Many measures are not explicit bans, but vary from licensing requirements to a right of first refusal for the government of the exporting country. These restrictions have raised debate about the consistency of such actions with WTO rules and the potential impact on the global trading system. Some markets depend heavily on countries that have implemented trade restrictions. Most leading exporters are also major importers of critical supplies, which put integrated supply chains at risk. The proliferation of such measures prompted some countries to lift restrictions or to abide by certain principles in their temporary application. WTO Rules In general, WTO agreements are flexible in allowing the use of emergency trade restrictions related to national security or health that might otherwise contravene WTO obligations; the agreements require, however, that such restrictions be targeted, temporary, and transparent. 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. It allows members to apply restrictions temporarily to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting country. 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 called on members to abide by notification obligations and improve transparency on COVID-related trade measures. Recent US. Actions In recent decades, U.S. export restrictions typically have 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 https://crsreport certain medical gloves, without explicit approval from FEMA. The rule included various exemptions, including exports of subject goods that are destined for either Canada or Mexico. The rule also required FEMA to consider the need to minimize disruption to supply chains, the humanitarian impact of a restriction, as well as other diplomatic considerations. The restriction applies to an estimated $1.1 billion of U.S. exports (Figure 1). On December 31, 2020, FEMA extended this temporary rule to June 30, 2021, and added syringes and needles to the list of restricted products. Figure I. U.S. Imports and Exports of Goods now subject to FEMA's Temporary Export Restrictions U.S. Imports U U.S. Exports Gloves $2.8b Respirators $3.4b Surg. Masks Sb Syringes >o.b 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 it is necessary to prevent evasion of U.S. domestic anti-hoarding actions by exporting goods to markets where they can command higher prices. Advocates contend the measure was not an outright ban, but rather prioritized U.S. demand and granted 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. With the United States a net importer of other kinds of PPE, 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 restricted goods. As one trade economist noted, Jamaica ... gets more than half of its total imports of respirators, masks, and gloves from the United States. Export Restrictions Globally Between January 2020 and the beginning of April 2021, countries took more than 220 actions banning or limiting the export of certain products for COVID-19-related reasons, according to Global Trade Alert (Figure 2). The products covered by these export curbs vary, broadly falling into two categories: medical goods (medical supplies, pharmaceuticals, and equipment) and foodstuffs. Most of the export restrictions came early in the pandemic, peaking in March and April 2020. While many of the

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