COVID-19 Pandemic Could Soon Lead to Global Restrictions on Food Exports, Trade Expert Says
The world could soon see increased export restrictions on food supplies due to the COVID-19 pandemic, said Simon Evenett, a trade and economics professor at the University of St. Gallen in Switzerland. Although export restrictions so far have been mostly limited to medical supplies, the upcoming harvesting season in Western Europe and the U.S. could be impacted because of a lack of labor due to coronavirus-related travel restrictions, Evenett said. This could lead to protectionist-style policies regarding food as well as medicine.
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“Export curbs on food are less of a problem [right now] … than export curbs on medicine,” Evenett said during an April 16 webinar hosted by the Washington International Trade Association. “But, of course, it doesn't have to stay like this. This is something we have to monitor. It could develop and get worse.”
Some countries have already imposed food restrictions, Evenett said, such as Russia’s ban on certain grain exports (see 2004080056) and a rice export ban introduced by Vietnam last month (see 2003270010). Vietnam later reversed that measure -- partly due to backlash from rice farmers, Evenett said -- and instead introduced a rice export quota (see 2004140029).
Evenett pointed to a recent trend of governments introducing export restrictions but then reversing those measures after receiving pushback from producers, who rightly inform the government that food supply is not an issue. Evenett called it the “overreaction phase,” but said those measures could soon be the norm. “We’re in early days here,” he said. Fewer than 25 governments have imposed restrictions on food exports due to the pandemic, Evenett said, much less than the 75 governments that have restricted sales of medical supplies since the beginning of the year. In addition, the number of governments currently restricting food exports is “nowhere near” the number of restrictions in place during the 2008 financial crisis, which saw a “substantial number of export curbs,” Evenett said.
But that could soon change. “Once we get into the picking seasons in Western Europe and North America, if we don't have those foreign laborers coming in to be able to pick those crops, then we're going to lose a lot of produce,” Evenett said. “Food scarcity, if not necessarily shortages, will come back in a couple of months as an issue in more countries.”
Countries should refrain from restricting food exports, which could lead to an even worse disruption of the global supply chain, said Rufus Yerxa, president of the National Foreign Trade Council. “Most of us would agree that this is not really the time to end up implementing policies that disrupt supplies, particularly in the two critical areas of medicine and food,” he said during the webinar. “If all countries go down this road ... it's a self-defeating strategy. It disrupts the supply chains in the short term and it stops global coordination.”
Yerxa said that countries will need to sustain agricultural trade to survive the pandemic suppression effort. “We need to maintain the system of supply chains the way it exists today, not use the crisis to enact restrictive measures that we think are going to somehow preserve our ability to deal with it domestically, like an export restraint,” he said.
Ashok Mirpuri, Singapore's ambassador to the U.S., said the country is committed to limiting export restrictions and sustaining free-flowing trade, which he said is pivotal to fighting the spread of COVID-19. Singapore was one of seven countries that signed a March joint statement committing to keeping trade lanes open (see 2003260029), and Mirpuri added that Singapore and New Zealand earlier this week agreed to eliminate customs duties for pharmaceuticals and other medical products. The agreement will also expedite the movement of essential goods to airports and seaports, he said, adding that other World Trade Organization members should agree to similar measures.
“Closing off your exports means that others will close up exports to you as well,” Mirpuri said. “We rely on open export supply chains … and we need to think in terms of a longer-term supply chain and that not each country can remain dependent on itself.”