Daily US Times: In the race to secure medical supplies, countries ban or restrict exports
Many countries across the world are in race to secure medical supplies and ban or restrict exports, in an attempt to fight the coronavirus outbreak.
India banned the export of sanitizers and ventilators on March 24. The European Union announced on March 15 it was restricting exports medical supplies like surgical masks, gowns, face shields and other personal protective equipment. Switzerland began requiring On Wednesday licenses for exports of goggles, gloves, masks, and swabs.
According to the national broadcaster’s website, Swiss economic minister Guy Parmelin said: “It’s the least we can do for the Swiss population to avoid a shortage of necessary medical equipment in an emergency situation.”
These are just a few of the trade restrictions several governments have put in place on medical supplies since the outbreak began in Wuhan, China last year.
The University of St. Gallen Professor Simon Evenett, who is also the head of Global Trade Alert, 60 countries have introduced new export curbs and more are being added every day.
While leaders from different countries are understandably concerned about providing for their own nations, but trade experts warned that such restrictions will lead to inefficient distribution of essential goods. Ultimately prices go up for everyone and poorer nations would be more sufferer as they can get cut off from crucial technology.
World Bank economist Michele Ruta said, “We know there is a tendency of individuals to hoard. This behavior happens also at the international domain.”
He said comparing to global food prices from 2008-2011, national hoarding can lead to overall reductions in production, product scarcity and price increases.
During the increasing global food prices from 2008-2011, many countries began restricting food exports. Those trade measures drove up food prices by another 13% on average, Mr Ruta and his colleagues calculated.
He and fellow World Bank economist Aaditya Mattoo took a look at the ventilator market to try and predict how trade restrictions could impact the global response to the Covid-19 outbreak.
They found just seven countries account for 70% of total exports. They estimate if just one producer imposed an export ban, world prices would go up by 10%.
Ruta said, if more countries impose export restrictions, the price increase would be much larger.
None of the major ventilator-producing countries currently issued official export ban, but Siare Engineering, Italy’s only ventilator producer said all its production is reserved for domestic use from March 6 after directions from the government. The company previously exported 90% of its products, which includes anesthesia machines and ventilators.
Gianluca Preziosa, Siare’s director-general said: “Prime Minister Conte directly called to explain the situation. He said there wasn’t an alternative. We had to organize a plan with the government in 48 hours with us and the civil protection and defense ministries.”
Many nations without their own ventilator manufacturers are likely to be poorer countries who have no industrial or technological base to produce such products. There are no nations in the Middle East, Africa or South Asia that export ventilators and only one nation in Latin America does. While countries in these regions may have domestic ventilator producers, he argues it’s unlikely they would be producing the most advanced versions.