As cities around the world have shut down, drastically altering daily life, the spread of COVID-19 appears to be slowing in response in some cases. But it continues spreading globally with numerous consequences for both global health and trade.
In response to this crisis, the World Customs Organization (WCO) and the World Trade Organization (WTO) issued a joint statement on April 6th pledging to work side-by-side in facilitating trade during this uncertain time.
The WCO and WTO Joint Agreement
The agreement between the WCO and WTO works to facilitate the trade of essential goods with a heavy focus on supplies that are vital for combatting the pandemic. Medical supplies, as well as food and energy, will take priority for the foreseeable future. Additionally, considerations are in place to ensure that less-developed and land-locked countries with the most need receive the same essential goods.
The two organizations also urged their members to conduct cross-border trades in a “targeted, proportionate, transparent, and non-discriminatory” manner to increase transparency. But the WCO and WTO plan for all proposed changes to be temporary, particularly if they lead to restrictions in trade. Once trade begins to bounce back from the crisis, the measures will be rescinded.
Mitigating COVID-19 Impacts on Trade
The fact that the COVID-19 pandemic is first and foremost a health crisis has various implications for trade. With regards to the economy, disruptions at all levels of the supply chain for months on end will likely cause trade to fall between 13% and 32% this year. But there are several possible trajectories that the economy can take, including quick recovery if we make smart decisions now.
The agreement between the WCO and WTO helps lay strong foundations for such recovery while also considering the health and well-being of people. When it comes to economic damages, the goal is to mitigate them as much as possible, but not at the expense of human life.
Trade Community Adjustments
The trade community must adapt to the conditions laid out by the WCO and WTO while they last. Some companies may need to shift their focus to goods covered by the new trade agreement. This can be tricky considering that health products often have strict standards.
For example, some countries may approve various respirators while other countries require specific models. However, the severity of the current situation led the Food and Drug Association (FDA) to open its doors to the relaxation of certain standards. Such actions aim to prevent the need for personal protective equipment (PPE) outpacing its supply.
While accommodating, the FDA is still a complicated maze that often proves difficult to navigate. Fortunately, ClearFeight’s experts specializing in the FDA regulations for shipping PPE can help smooth the process. Working together to make such changes in the supply chain may lead to the beginning of a recovery in trade as early as the second half of this year.
Contact us today and see how we can assist with your logistics and supply chain needs.