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Updated August 25, 2020
Export Restrictions in Response to the COVID-19 Pandemic
Overview of Export Restrictions
2020, the Federal Emergency Management Agency
In response to the Coronavirus Disease 2019 (COVID-19)
(FEMA), pursuant to the Defense Production Act (DPA)
pandemic, countries all over the world, including the United
and other authorities, issued a temporary final rule banning
States, have imposed temporary restrictions on exports of
the export of certain personal protective equipment (PPE),
certain medical goods and some foodstuffs in order to
including certain respirators, certain surgical masks, and
mitigate potential shortages of key supplies. According to
certain medical gloves, without explicit approval from
the World Trade Organization (WTO), for G-20 countries,
FEMA. The rule included various exemptions, including
export bans accounted for more than 90% of trade
exports of subject goods that are destined for either Canada
restrictions related to the pandemic. Many measures are not
or Mexico. The rule also required FEMA to consider the
explicit bans, but vary from licensing requirements to
need to minimize disruption to supply chains, the
mandates for sales to the state. These restrictions have
humanitarian impact of a restriction, as well as other
raised debate about the consistency of such actions with
diplomatic considerations. The restriction applies to an
WTO rules and the potential impact on the global trading
estimated $1.1 billion of U.S. exports (Figure 1). On
system. Some markets depend heavily on countries that
August 10, 2020, FEMA extended this temporary rule to
have implemented restrictions. Most leading exporters are
December 31, 2020.
also major importers of critical supplies, with integrated
supply chains at risk. The proliferation of such measures
Figure 1. U.S. Imports and Exports of Goods now
has prompted some countries to commit to limit restrictions
subject to FEMA’s Temporary Export Restrictions
or to abide by certain principles in their temporary
application. Some Members of Congress have weighed in
on 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 allowing the
use of emergency trade restrictions related to national
security or health that might otherwise contravene WTO
obligations; the agreements require, however, that such
Source: U.S. Census Bureau, U.S. imports for consumption and U.S.
restrictions be targeted, temporary, and transparent. Article
exports for 2019. Based on HTS codes subject to FEMA restrictions.
XI of the 1994 General Agreement on Tariffs and Trade
(GATT) broadly prohibits export bans and restrictions,
Advocates of the policy argue that the measure is necessary
other than duties, taxes, or other charges. However, it
to prevent evasion of U.S. domestic anti-hoarding actions
allows members to apply restrictions temporarily “to
by exporting goods to markets where they can command
prevent or relieve critical shortages of foodstuffs or other
higher prices. Furthermore, advocates contend the measure
products essential” to the exporting country. In the case of
was not an outright ban, but rather prioritized American
foodstuffs, the WTO Agreement on Agriculture requires
demand and granted FEMA the discretion to allow the
members to give “due consideration to the effects on food
export of excess goods. Critics note that the United States
security” of importing countries. In addition, general
imports many more of the goods subject to the restriction
exceptions (e.g., GATT Article XX) within WTO rules
than it exports, thus imperiling U.S. supplies of those goods
provide for policy flexibility, including to protect health,
should more of its major trading partners take similar
provided restrictions do not “constitute a means of arbitrary
actions (Figure 1). Moreover, the United States is a net
or unjustifiable discrimination,” or a “disguised restriction
importer of other kinds of PPE and critics worry that
on international trade,” among other conditions.
counter export restrictions by U.S. trading partners might
quickly encompass other goods. Still others are concerned
WTO leadership has emphasized the downside risks of
about the impact of such restrictions on countries in Latin
curbs on exports and urged members to restrain their use
America and the Caribbean, many of which rely on U.S.
and minimize disruptions to supply chains. The WTO has
exports of the restricted goods. As one trade economist
noted, “Jamaica … gets more than half of its total imports
also called on members to abide by notification obligations
and improve transparency on any trade-related measures
of respirators, masks, and gloves from the United States.”
taken in response to COVID-19.
Export Restrictions Globally
Recent U.S. Actions
By the end of July, nearly 90 countries had introduced
In recent decades, restrictions on U.S. exports typically
export restrictions as a result of the COVID-19 pandemic,
have been applied to defense articles, dual-use goods and
according to the WTO. Since January 2020, countries have
technologies, crude oil, or sanctioned entities. On April 7,
taken more than 197 actions banning or limiting the export
of certain products, according to Global Trade Alert
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Export Restrictions in Response to the COVID-19 Pandemic
(Error! Reference source not found.). The products
restrictions in exporting countries can reduce incentives for
covered by these export curbs vary, but have broadly fallen
firms to produce and sell at home. Economists have also
into two categories: medical goods (medical supplies,
noted that export restrictions can lead to retaliatory
pharmaceuticals, and equipment) and foodstuffs. Getting an
measures that further cut off countries from essential
accurate picture of the total number of restrictions is
supplies, disrupt supply chains, and create uncertainty.
difficult, as many WTO members, including China, have
not yet officially notified the WTO’s Secretariat of all
“Taken col ectively, export restrictions can be dangerously
measures. As of early August, 7 export restrictions and 37
counterproductive. What makes sense in an isolated
quantitative restrictions had been notified. With respect to
emergency can be severely damaging in a global crisis. Such
medical supplies, some analysts have argued that Chinese
measures disrupt supply chains, depress production, and
government actions in February, including prioritizing
misdirect scarce, critical products and workers away from
domestic use and making large state-backed purchases on
where they are most needed. Other governments counter
the international market, fueled global PPE scarcity and
with their own restrictions. The result is to prolong and
prompted the global restrictions. Currently, China is
exacerbate the health and economic crisis — with the most
selectively releasing PPE for export, with destinations
serious effects likely on the poorer and more vulnerable
seemingly chosen according to political calculations. See
countries.”
CRS Report R46304, COVID-19: China Medical Supply
IMF and WTO, April 24, 2020
Chains and Broader Trade Issues.
Reactions and Global Coordination
Figure 2. Export Restrictions during COVID-19
Countries and intergovernmental organizations have taken
some coordinated action, as concerns mounted about
growing export restrictions. In March 2020, for example,
Germany, France, and the European Commission
negotiated an end to intra-European export restrictions on
medical supplies. That same month, G-20 countries stated
that any emergency measures taken must be “targeted,
proportionate, transparent, and temporary,” and must not
“create unnecessary barriers to trade or disruption to global
supply chains.” In April, the G-20 Agriculture Ministers
issued a broadly similar statement. In May, 42 WTO
members pledged to lift emergency measures as soon as
possible; the United States, EU, and China did not
participate. Following expressions of concern, some
countries, such as Turkey and Romania, have removed
Source: Global Trade Alert, Actions Taken Jan. 1-Aug. 15, 2020.
restrictions. In a June report on G-20 countries, the WTO
Medical and Sanitation Supplies
reported that by mid-May, 36% of COVID-19 trade
Between January 1 and August 15, at least 67 countries
restrictions had been repealed. At the same time, 70% of
took at least 152 actions imposing export restrictions on
pandemic-related measures liberalized and facilitated trade.
medical goods, a category that includes general medical
supplies (such as PPE), medical equipment,
Some observers view the trade response to COVID-19 as
pharmaceuticals, chemicals, sanitation products, and other
reinforcing the need for a plurilateral agreement on medical
medical goods. While some countries have removed some
goods to address broader trade issues, including the phasing
restrictions, at least 88 remain in force.
out of export restrictions. Economists have favored this
multilateral approach to helping diversify the supply chain
Foodstuffs
and have advocated for a coordinated effort with close
Between January 1 and August 15, at least 18 countries
allies to prepare rapidly for a potential second wave of
took at least 24 actions to restrict exports of foodstuffs,
COVID-19 in the fall.
despite little evidence of shortages. While many of the more
severe restrictions have been lifted, eight remain in force.
Vaccines and Trade
Economic Impact
Economists and policymakers have expressed concern that
if countries repeat the patterns observed in the spring, they
A growing economic literature has assessed the impact of
might hinder the efficient production and equitable
past export curbs during crises, in particular related to raw
distribution of a future vaccine, as well as therapeutics.
materials and the food sector, on resource allocation, trade,
Countries, some observers worry, might place export
and the competitiveness of industries. These studies have
controls on supplies and inputs necessary for the production
generally concluded that export restrictions, particularly by
of vaccines or on the vaccines themselves. Such actions
larger producers, can have ripple effects throughout the
would likely have a severe impact on the availability of any
global economy, affecting both the level and volatility of
future vaccines in low-income countries in particular.
supply and prices. In the short run, export curbs by larger
exporters may result in lower domestic prices and increase
domestic availability of scarce medical products. At the
Christopher A. Casey, Analyst in International Trade and
same time, such measures can reduce the total global supply
Finance
and limit the availability of such goods for countries with
Cathleen D. Cimino-Isaacs, Analyst in International Trade
limited manufacturing capacity. In addition, domestic price
and Finance
https://crsreports.congress.gov
Export Restrictions in Response to the COVID-19 Pandemic
IF11551
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