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May 15, 2020
Export Restrictions in Response to the COVID-19 Pandemic
Overview of Export Restrictions
and other authorities, issued a temporary final rule banning
In response to the COVID-19 pandemic, countries all over
the export of certain personal protective equipment (PPE),
the world, including the United States, have imposed
including certain respirators, certain surgical masks, and
temporary restrictions on exports of certain medical goods
certain medical gloves, without explicit approval from
and some foodstuffs in order to mitigate potential shortages
FEMA. The rule includes various exemptions, including
of key supplies. Many measures are not explicit bans, but
exports of subject goods that are destined for either Canada
vary from licensing requirements to mandates for sales to
or Mexico. The rule also requires FEMA to consider the
the state. These restrictions have raised debate about the
need to minimize disruption to supply chains, the
consistency of such actions with World Trade Organization
humanitarian impact of a restriction, as well as other
(WTO) rules and the potential impact on the global trading
diplomatic considerations. The ban applies to an estimated
system. Some markets depend heavily on countries that
$1.1 billion of U.S. exports (Figure 1).
have implemented restrictions. Most leading exporters are
also major importers of critical supplies, with integrated
Figure 1. U.S. Imports and Exports of Goods now
supply chains at risk. The proliferation of such measures
subject to FEMA’s Temporary Export Restrictions
has prompted some countries to commit to limit restrictions
or to abide by certain principles in their temporary
application. Members of Congress have weighed in on both
sides of the issue, both in terms of the immediate disruption
from COVID-19, but also on the future of supply chains.
WTO Rules
In general, WTO agreements are flexible in permitting
emergency measures related to national security or health
that may contravene WTO obligations; they require,
Source: U.S. Census Bureau, U.S. imports for consumption and U.S.
however, that such restrictions be targeted, temporary, and
exports for 2019. Based on HTS codes subject to FEMA restrictions.
transparent, and do not unnecessarily restrict trade. Article
Advocates of the policy argue that the measure is necessary
XI of the 1994 General Agreement on Tariffs and Trade
to prevent evasion of U.S. domestic anti-hoarding actions
(GATT) broadly prohibits export bans and restrictions,
by exporting goods to markets where they can command
other than duties, taxes or other charges. However, it allows
members to apply restrictions temporarily “to prevent or
higher prices. Furthermore, advocates contend, the measure
is not an outright ban, but rather prioritizes American
relieve critical shortages of foodstuffs or other products
essential”
demand and grants FEMA the discretion to allow the export
to the exporting country, among other
of excess goods. Critics note that the United States imports
circumstances. In the case of foodstuffs, the WTO
many more of the goods subject to the restriction than it
Agreement on Agriculture requires members to give “due
exports, thus imperiling U.S. supplies of those goods should
consideration to the effects on food security” of importing
more of its major trading partners take similar actions
countries. In addition, general exceptions (e.g., GATT
(Figure 1). Moreover, the United States is a net importer of
Article XX) within WTO rules provide for policy
other kinds of PPE and critics worry that counter export
flexibility, including to protect health, provided restrictions
restrictions by U.S. trading partners might quickly
do not “constitute a means of arbitrary or unjustifiable
encompass other goods. Still others are concerned about the
discrimination,” or a “disguised restriction on international
impact of such restrictions on countries in Latin America
trade,” among other conditions.
and the Caribbean, many of which rely on U.S. exports of
the goods subject to restrictions. As one trade economist
WTO leadership has emphasized the downside risks of
noted, “Jamaica … gets more than half of its total imports
curbs on exports and urged members to restrain their use
of respirators, masks, and gloves from the United States.”
and minimize disruptions to supply chains. The WTO has
also called on members to abide by notification obligations
Export Restrictions Globally
and improve transparency on any trade-related measures
By the end of April, at least 80 countries had introduced
taken in response to COVID-19.
export restrictions as a result of the COVID-19 pandemic,
Recent U.S. Actions
according to the WTO. Since January 2020, countries have
taken more than 117 actions banning or limiting the export
In recent decades, restrictions on U.S. exports typically
of certain products, according to Global Trade Alert
have been applied to defense articles, dual-use goods and
(Figure 2). The products covered by these export curbs
technologies, crude oil, or sanctioned entities. On April 7,
vary, but have broadly fallen into two categories: medical
2020, the Federal Emergency Management Agency
goods (medical supplies, pharmaceuticals, and equipment)
(FEMA), pursuant to the Defense Production Act (DPA)
and foodstuffs. Getting an accurate picture of the total
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Export Restrictions in Response to the COVID-19 Pandemic
number of export restrictions is difficult, as many WTO
larger producers, can have ripple effects throughout the
members, including China and the United States, have not
global economy, affecting both the level and volatility of
yet officially notified the WTO’s Secretariat of those
supply and prices. In the short run, export curbs by larger
restrictions. With respect to medical supplies, some analysts
exporters may result in lower domestic prices and increase
have argued that Chinese government actions in February
domestic availability of scarce medical products. At the
2020, including prioritizing domestic use (which was not
same time, such measures can reduce the total global supply
reported to the WTO) and making large state-backed
and limit the availability of such goods for countries with
purchases on the international market, fueled global PPE
limited domestic manufacturing capacity. In addition,
scarcity and prompted the global restrictions. Currently, the
domestic price restrictions in exporting countries can
Chinese government is selectively releasing PPE for export,
reduce incentives for firms to produce and sell at home.
with destinations seemingly chosen according to political
Economists have also noted that export restrictions can lead
calculations. See CRS Report R46304, COVID-19: China
to retaliatory measures that further cut off countries from
Medical Supply Chains and Broader Trade Issues,
essential supplies, disrupt supply chains, and create
coordinated by Karen M. Sutter.
uncertainty.
Figure 2. Export Restrictions on Foodstuffs and/or
“Taken col ectively, export restrictions can be dangerously
Medical and Pharmaceutical Products
counterproductive. What makes sense in an isolated
emergency can be severely damaging in a global crisis. Such
measures disrupt supply chains, depress production, and
misdirect scarce, critical products and workers away from
where they are most needed. Other governments counter
with their own restrictions. The result is to prolong and
exacerbate the health and economic crisis — with the most
serious effects likely on the poorer and more vulnerable
countries.”
IMF and WTO, April 24, 2020
Reactions and Global Coordination
Countries and intergovernmental organizations have taken
some coordinated action as concerns have mounted about
growing export restrictions. In March 2020, for example,
Germany, France, and the European Commission
Source: Global Trade Alert, Actions Taken January 1-May1, 2020.
negotiated an end to intra-European export restrictions on
Medical and Sanitation Supplies
medical supplies. That same month, G-20 countries stated
As of May 1, at least 50 countries have taken at least 95
that any emergency measures taken must be “targeted,
actions to impose export restrictions on medical goods, a
proportionate, transparent, and temporary,” and must not
category that includes general medical supplies (such as
“create unnecessary barriers to trade or disruption to global
PPE), medical equipment, pharmaceuticals (the largest
supply chains.” In April, the G-20 Agriculture Ministers
category in terms of actions), chemicals, sanitation
issued a broadly similar statement in the context of food
products, and other medical goods. The United States
security. In May, 42 WTO members pledged to lift
imports more than $130 billion of such goods annually
emergency measures as soon as possible; the United States,
from countries that have added restrictions since January.
the European Union, and China did not participate in the
pledge. Following expressions of concern, some countries,
Foodstuffs
such as Turkey and Romania, have removed restrictions.
As of May 1, at least 17 countries have taken 22 actions to
impose bans or licensing requirements on exports of food-
Some observers view the trade response to COVID-19 as
stuffs, despite little evidence of shortages. For example:
reinforcing the need for a plurilateral agreement on medical
Russia, Kazakhstan, and Romania’s restrictions on the
goods to address broader trade issues, including the phasing
export of wheat.
out of export restrictions. For example, Singapore and New
Vietnam’s restrictions on the export of rice.
Zealand recently entered into an open agreement to remove
Turkey’s restrictions on onions, lemons, and potatoes.
tariffs, not to impose export restrictions, and to remove
nontariff barriers on a list of COVID-19 related products.
The impact of such restrictions could be severe. Russia, for
example, is the world’s top exporter of wheat. While some
The two countries have invited others to join. Economists
have favored this multilateral approach to helping diversify
analysts note that such measures often accompany domestic
the supply chain and have advocated for a coordinated
policies to control prices (to discourage exporting goods to
effort with close allies to prepare rapidly for a potential
take advantage of noncontrolled prices abroad), others warn
second wave of COVID-19 in the fall.
that such policies could lead to artificial shortages.
Economic Impact
Christopher A. Casey, Analyst in International Trade and
A growing economic literature has assessed the impact of
Finance
past export curbs during crises, in particular related to raw
Cathleen D. Cimino-Isaacs, Analyst in International Trade
materials and the food sector, on resource allocation, trade,
and Finance
and the competitiveness of industries. These studies have
generally concluded that export restrictions, particularly by
IF11551
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Export Restrictions in Response to the COVID-19 Pandemic
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