The COVID-19 (coronavirus) pandemic has exposed the upsides and downsides of international trade in medical goods and services. Open trade can increase access to medical services and goods—and the critical inputs needed to manufacture them—improve quality and variety, and reduce costs. However, excessive concentration of production, restrictive trade policies, supply chain disruptions, and regulatory divergence can jeopardize the ability of public health systems to respond to pandemics and other health crises. Trade Therapy: Deepening Cooperation to Strengthen Pandemic Defenses, coordinated by Nadia Rocha and Michele Ruta at the World Bank and Marc Bacchetta and Joscelyn Magdeleine at the World Trade Organization, provides new data on trade in medical goods and services and medical value chains, surveys the evolving policy landscape before and during the pandemic, and proposes an action plan to improve trade policies and deepen international cooperation to deal with future pandemics.
As the COVID-19 pandemic lingers, the focus of policy action is on the response, which includes actions aimed at removing bottlenecks and providing government support to promote equitable access to vaccines. As the emergency subsides, the focus should shift to prevention and preparedness. Steps to close information gaps—building on the Multilateral Leaders Task Force on COVID-19, the ACT-Accelerator, and the open markets, for example—by negotiating tariff reductions on medical goods and greater market access in services should take priority. Also important are measures to improve the efficiency of markets, which include harmonizing regulation through mutual recognition or equivalence of standards and creating international standards for essential medical goods, inputs, and production processes. Agreement on a crisis rulebook to be deployed during an emergency—including clear and agreed limits on export policy flexibility and shared rules on intellectual property flexibilities—would provide a more solid policy foundation to address future challenges.