Trade chiefs of the world’s 20 largest economies (G20) pledged to try to keep supply chains open as the world fights to contain the coronavirus pandemic and limit the economic fallout.
The G20 commerce ministers also vowed to "guard against profiteering and unjustified price increases" during a conference call on Monday devoted to the trade and investment implications of the health scare.
"We will continue to work together to deliver a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open," the ministers said in a joint statement released by Saudi Arabia, current holder of the G20's rotating presidency. "We will explore ways for logistics networks via air, sea and land freight to remain open."
The pandemic is exposing rifts between countries’ traditional pledges to uphold free trade and their actions to meet the short-term needs of domestic populations facing lockdowns meant to stop the spread of the virus, which has killed 35,000 globally.
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Russia, for example, last week proposed limiting shipments of its grain abroad. The European Union criticised such moves on Monday by warning against food-export restrictions.
"There is no global supply shortage at this time and such measures are completely unjustified," EU Trade Commissioner Phil Hogan told his G20 counterparts.
At the meeting of trade ministers, the World Bank asked the nations to refrain from setting any new export restrictions on "critical medical supplies, food or other key products," according to the text of a speech made by Mari Pangestu, the bank's managing director for development policy and partnerships. She also asked them to lower or eliminate tariffs on products related to Covid-19, food and other basic goods.
The EU, the world’s most lucrative single market, has itself faced criticism for a mid-March decision temporarily to require an authorisation for the sale outside the 27-nation area of personal protective equipment needed to fight the virus, known as Covid-19.
In their joint statement, the G20 trade chiefs appeared to offer scope for such moves by saying they can be compatible with World Trade Organization rules.
“We agree that emergency measures designed to tackle Covid-19, if deemed necessary, must be targeted, proportionate, transparent, and temporary, and that they do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules,” the ministers said.
At the meeting, the US said that the main goal is to support global supply chains to help all people, but emphasised that it would promote domestic industry for critical products to reduce over-reliance on other countries.
"Our primary goal is to resolve disruptions in global supply chains that can support the health and well-being of all our citizens," US Trade Representative Robert Lighthizer told the meeting. However, "we are encouraging diversification of supply chains and seeking to promote more manufacturing at home" to lessen the strategic vulnerability of being over-dependent on other nations, he said. – Bloomberg
