The trade policy response to COVID-19 and its implications for international business

This paper aims to explore trade policy measures taken in response to COVID-19 and analyses in detail their extent and nature. It assesses their compatibility with World Trade Organisation (WTO) agreements: specifically, whether they were necessary and justifiable efforts to protect the security and health of populations and asks how this widespread recourse to trade barriers may impact on international business?

This paper analyses an extensive database from the International Trade Centre of trade measures taken in response to COVID-19. It differentiates by type of country, nature and coverage of measures (imports or exports, type of product…). On the basis of existing jurisprudence, this paper analyses whether restrictive measures were likely to be judged legal under WTO rules.

This paper finds that, although the majority of trade measures are probably justifiable, there were nevertheless many measures whose coverage and/or nature was such that a justification under existing WTO exceptions is, at the very least, arguable. Such widespread and intense instigation of potentially WTO incompatible measures in such a short period of time undoubtedly undermines the global trade rules on which international business has relied for decades.

There is little existing analysis of the legality of measures taken under the security exceptions and no substantial analyses of the measures taken in response to COVID-19. Furthermore, little scholarly attention has been paid to the impacts on international business of the increasing use of WTO “exceptions” to justify trade measures to protect national industries and populations.