Trade Policy at Work

Ensuring PPE Market Supply Transparency for Future Pandemics: From Lessons to Solutions

This session presented an overview of the global personal protective equipment (PPE) market and the impact of COVID-19 on PPE supply, and presented a way to enhance transparency of the PPE supply chain. The COVID-19 pandemic has exposed the opacity of the global PPE supply chain, and the high dependence on international markets for medical PPE provision has left states vulnerable to price volatility and supply shortages. This PPE market volatility is exacerbated by the lack of accurate, up-to-date, transparent information of PPE international supply conditions, which undermines effective policy responses and the resilience of healthcare systems around the world.

The session began with a presentation on the topic. It outlined the impact of COVID-19 on the international PPE market and stated several key findings: demand for PPE increased by 300-400%, production increased by 50-1200% depending on the type of PPE, and China increased its share of the global PPE market to 80%. Furthermore, trade in PPE increased by 433%, and international prices increased by around 400-700%. The presentation then argued that the opacity of the international PPE supply chain exacerbated market volatility, referring to the imposition of PPE export bans by 47 countries as evidence of uninformed decision making by policymakers. The creation of a Market Supply Transparency System was tabled as a solution to enhance the transparency of the PPE supply chain by providing publicly accessible real time data on the production capacity, output, and available inventory of PPE manufacturing facilities at either the national or international level.

Discussants expressed their satisfaction with the presentation, noting that PPE market volatility was especially harmful for developing and least developed countries. Three main areas of concern were highlighted. First, discussants noted the poor state of notifications in the WTO and expressed their concern that this proposal would place an additional undue burden on members. Some expressed their hope that a politically neutral topic such as PPE would help sooth political concerns, and that directly engaging with private actors would alleviate some of the additional burden on states. Second, a free rider problem was identified whereby companies and countries could benefit from public access to this information without submitting their own. The need to develop incentives, such as preferential public procurement measures were discussed as a possible solution to this problem. Last, discussants raised concerns regarding the possible lack of private sector participation. Discussants again mentioned the need to develop incentives and identified examining the appetite of the private sector for this proposal as an area for potential further research.

On the panel were Mr. Kyle de Klerk, Master Candidate in International Affairs IHEID; Ms. Mariana Mendez, Master Candidate in International Affairs IHEID; Ms. Nadia Garcia-Santaolalla, Public Policy PhD. Candidate at Tecnológico de Monterrey, School of Government; H.E Mikael Anzén, Ambassador and Permanent Representative of Sweden to the WTO; and Prof. Gabrielle Marceau, Senior Counselor, WTO Research Division. The session was moderated by Rashid S. Kaukub, Executive Director, CUTS International Geneva.

Reporting by Kyle de Klerk