In an open letter issued today, John W.H. Denton AO, Secretary General of the International Chamber of Commerce (ICC), has urged G20 trade ministers to seize the opportunity to fully utilise trade policy tools to combat the COVID-19 pandemic and limit its economic effects.
In the open letter, Mr Denton wrote:
“While we understand why many countries have limited their exports of medical necessities, this is not an effective response to the fundamental problem – a supply shortfall, which can only be addressed by increasing production. Export curbs do the exact opposite – they remove incentives for companies to massively produce medical equipment by destroying the possibility of selling abroad.”
“We are seeing an unprecedented collapse of value chains in many sectors – with major implications for employment and the supply of goods.”
Mr Denton also stressed that the pandemic must not inhibit long-term reform of the trading system:
“[T]he economic downturn caused by the pandemic will necessitate a significant rebuild. In this time of uncertainty, leadership requires not only responding to the crisis at hand, but providing a clear vision of the future.”
The letter also contains specific recommendations – drawing on the expertise of ICC’s global business network – to deploy trade policy tools to expedite the flow and reduce the cost of essential medical supplies, as well as measures to support small businesses.