GENEVA, Switzerland — The World Trade Organization (WTO) secretariat has released a new report on trade in medical products critical for the global response to the COVID-19 pandemic. The report traces trade flows for products such as personal protective products, hospital and laboratory supplies, medicines and medical technology while providing information on their respective tariffs.
Trade-in medical products which have now been described as critical and in severe shortage during the COVID-19 crisis(1) totalled about US$ 597 billion in 2019, accounting for 1.7 percent of total world merchandise trade according to the report. The ten largest supplying economies accounted for almost three-quarters of total world exports of the products while the ten largest buyers accounted for roughly two-thirds of world imports.
Commitments made under various WTO negotiations and agreements have helped slash import tariffs on these products and improve market access, with the average tariff on COVID-19 medical products standing at 4.8 percent, lower than the 7.6 percent average tariff for non-agricultural products in general. The statistics show that 52 percent of 134 WTO members impose a tariff of 5 percent or lower on medical products. Among them, four members do not levy any tariffs at all: Hong Kong, China; Iceland; Macao, China; and Singapore. The report, however, also identifies markets where tariffs remain high. Tariffs on face masks, for example, can be as high as 55 percent in some countries.
Key points
- Germany, the United States and Switzerland supply 35 percent of medical products; (2)
- China, Germany and the United States export 40 percent of personal protective products;
- Imports and exports of medical products totalled about US$ 2 trillion, including intra-EU trade, which represented approximately 5 percent of total world merchandise trade in 2019;
- Trade of products described as critical and in severe shortage in the COVID-19 crisis totalled about US$ 597 billion, or 1.7 percent of total world trade in 2019;
- Tariffs on some products remain very high. For example, the average applied tariff for hand soap is 17 percent and some WTO members apply tariffs as high as 65 percent;
- Protective supplies used in the fight against COVID-19 attract an average tariff of 11.5 percent and go as high as 27 percent in some countries;
- The WTO has contributed to the liberalization of trade in medical products in three main ways:
- The results of tariff negotiations scheduled at the inception of the WTO in 1995;
- Conclusion of the plurilateral sectoral Agreement on Pharmaceutical Products (“Pharma Agreement”) in the Uruguay Round and its four subsequent reviews;
- The Expansion of the Information Technology Agreement in 2015.
- The report is available here.
