World Health Organization

World Health Organization — July 31 meeting of Emergency Committee regarding the outbreak of coronavirus disease and July 30 note on public health considerations while resuming international travel

· August 3, 2020 · COVID-19, World Health Organization · , · No Comments

COVID-19 is first and foremost an international health challenge. The World Health Organization (“WHO”) spearheads international efforts at developing and communicating information on the coronavirus, coordinating efforts at addressing the health response and working with other organizations to help countries around the world obtain needed medical supplies and to facilitate best practices in addressing the pandemic. While the United States has given notice of its withdrawal from the WHO (which takes effect six months after the notice), the WHO is a critical organization for a coordinated response to health pandemics such as COVID-19. For example, the WHO put out on February 3, 2020, a publication entitled, “2019 Novel Coronavirus (2019-nCoV): Strategic Preparedness and Response Plan” and followed that up last month with a progress report covering 1 February to 30 June 2020. See https://www.who.int/docs/default-source/coronaviruse/covid-strategy-update-14april2020.pdf?sfvrsn=29da3ba0_19; https://www.who.int/publications/m/item/who-covid-19-preparedness-and-response-progress-report—1-february-to-30-june-2020. These types of publications provide important information to nations around the world as well as documenting progress being made in controlling the spread of the pandemic.

This post looks at several recent activities of the WHO.

July 31, 2020 4th Meeting of the Emergency Committee regarding the outbreak of coronavirus disease (COVID-19)

On July 31, a meeting of health experts from around the world was convened by the WHO’s Director-General under the Inernational Health Regulations (IHR)(2005). It was the fourth meeting of the Emergency Committee regarding the outbreak of coronavirus disease (COVID-19). A statement was released from the meeting on August 1. https://www.who.int/news-room/detail/01-08-2020-statement-on-the-fourth-meeting-of-the-international-health-regulations-(2005)-emergency-committee-regarding-the-outbreak-of-coronavirus-disease-(covid-19).

Much of the work of the Emergency Committee is confidential but the statement released includes a summary of issues reviewed and advice provided to the WHO and to States Parties. As reviewed in yesterday’s post, the number of new COVID-19 cases continues to increase around the world. While most of the growth is in developing and least-developed contries, the United States continues to experience huge numbers of new cases, increasing hospitalizations and increasing deaths. Many other developed countries are seeing some resurgence of cases as their economies reopen. See August 2, 2020,  Review of the COVID-19 pandemic – continued growth in cases and deaths, resurgence in some countries where COVID-19 had receded, https://currentthoughtsontrade.com/2020/08/02/review-of-the-covid-19-pandemic-continued-overall-growth-in-cases-and-deaths-resurgence-in-some-countries-where-covid-19-had-receded/.

While many developing and least-developed countries have had relatively small numbers of cases, that is not true for all such countries. Moreover, the sharp contraction in GDP and trade volumes in developed countries and developing countries with large numbers of cases has meant that the economic damage for many of the poorest countries is mounting and is debilitating. The World Bank and IMF are both actively engaged in providing financial assistance to many developing and developed countries. Still the World Bank’s June 2020 Global Economic Prospects estimates that COVID-19 will result in 71-100 million people being pushed into extreme poverty. See https://www.worldbank.org/en/topic/poverty/brief/projected-poverty-impacts-of-COVID-19; World Bank, Global Economic Prospects, June 2020, https://openknowledge.worldbank.org/handle/10986/33748.

Thus, with the continued growth in global cases, the increased concentration in developing and least-developed countries and the huge economic effects occurring as countries try to reduce the spread of COVID-19, it is not surprising that the Emergency Committee “unanimously agreed that the pandemic still constitutes a public health emergency of international concern.” The WHO’s Director-General included a declaration to that effect in the statement released on August 1.

Below is the advice the Committee provided to the WHO Secretariat and the temporary recommendations to State Parties (all material to the next header is from the statement):

Advice to the WHO Secretariat

  1. Continue to distill and rapidly communicate lessons learned and best practices from the COVID-19 pandemic and national
    intra-action reviews.
  2. Continue to coordinate and mobilize global and regional multi- lateral organizations, partners and networks for robust political
    commitment and resourcing of COVID-19 pandemic preparedness and response, including for development of vaccines and
    therapeutics.
  3. Provide nuanced, pragmatic guidance on criteria for appropriate COVID-19 response activities to reduce the risk of response fatigue in the context of socio-economic pressures.
  4. Continue to support State Parties and partners in conducting active and community-based COVID-19 surveillance, through technical and operational resources, such as guidance, tools, and trainings on case definitions and identification, contact tracing, and death certifications; encourage State Parties to continue reporting relevant data to WHO through platforms such as the Global Influenza Surveillance and Response System.
  5. Accelerate research into remaining SARS-CoV-2 critical unknowns, such as the animal source and potential animal reservoirs, and improve understanding of the epidemiology and severity of COVID-19 (including its long-term health effects; viral dynamics such as modes of transmission, shedding, potential mutations; immunity and correlates of protection; co-infection; as well as risk factors and vulnerabilities) and the effectiveness of public health measures.
  6. Continue to work with partners to counter mis/disinformation and infodemics by developing and disseminating clear, tailored
    messaging on the COVID-19 pandemic and its effects; encourage and support individuals and communities to follow recommended public health and social measures.
  7. Support diagnostics, safe and effective therapeutics and vaccines’ rapid and transparent development (including in developing countries) and equitable access through the Access to COVID-19 Tools (ACT) Accelerator; support all countries to implement the necessary clinical trials and to prepare for the rollout of therapeutics and vaccines.
  8. Work with partners to revise WHO’s travel health guidance to reinforce evidence-informed measures consistent with the provisions of the IHR (2005) to avoid unnecessary interference with international travel; proactively and regularly share information on travel measures to support State Parties’ decision-making for resuming international travel.
  9. Support State Parties, particularly vulnerable countries, in strengthening their essential health services and accompanying
    supply chains as well as preparing for and responding to concurrent outbreaks, such as seasonal influenza.

Temporary recommendations to State Parties

  1. Share best practices, including from intra-action reviews, with WHO; apply lessons learned from countries that are successfully
    re-opening their societies (including businesses, schools, and other services) and mitigating resurgence of COVID-19.
  2. Support multilateral regional and global organizations and encourage global solidarity in COVID-19 response.
  3. Enhance and sustain political commitment and leadership for national strategies and localized response activities driven by science, data, and experience; engage all sectors in addressing the impacts of the pandemic.
  4. Continue to enhance capacity for public health surveillance, testing, and contact tracing.
  5. Share timely information and data with WHO on COVID-19 epidemiology and severity, response measures, and on concurrent disease outbreaks through platforms such as the Global Influenza Surveillance and Response System.
  6. Strengthen community engagement, empower individuals, and build trust by addressing mis/disinformation and providing clear guidance, rationales, and resources for public health and social measures to be accepted and implemented.
  7. Engage in the Access to COVID-19 Tools (ACT) Accelerator, participate in relevant trials, and prepare for safe and effective therapeutic and vaccine introduction.
  8. Implement, regularly update, and share information with WHO on appropriate and proportionate travel measures and advice, based on risk assessments; implement necessary capacities, including at points of entry, to mitigate the potential risks of international transmission of COVID-19 and to facilitate international contact tracing.
  9. Maintain essential health services with sufficient funding, supplies, and human resources; prepare health systems to cope with seasonal influenza, other concurrent disease outbreaks, and natural disasters.

Travel and Tourism

In prior posts, I have reviewed the devastating economic consequences of the pandemic on the travel and tourism sector of global economies as countries have restricted entry of people from many countries to reduce the likelihood of travelers having and spreading COVID-19. See April 30, 2020, The collapse of tourism during the COVID-19 pandemic, https://currentthoughtsontrade.com/2020/04/30/the-collapse-of-tourism-during-the-covid-19-pandemic/; May 3, 2020, Update on the collapse of travel and tourism in response to COVID-19, https://currentthoughtsontrade.com/2020/05/03/update-on-the-collapse-of-travel-and-tourism-in-response-to-covid-19/.

The airline industries around the world are in serious trouble, as are restaurants, bars, hotels, sports and entertainment venues and more. The reduced level of air traffic has greatly reduced air cargo availability which has increased costs for many products. At the same time, countries have struggled to find ways to expedite movement of medical goods and permit the travel of essential personnel (e.g., health professionals, transportation employees, etc.). There are not uniform standards being applied by countries on access of international travelers which means confusion and less movement than would happen under agreed rules.

On July 30, the WTO released a document, entitled “Public health considerations while resuming international travel”. The link follows and the document is embedded below. https://www.who.int/news-room/articles-detail/public-health-considerations-while-resuming-international-travel.

Public-health-considerations-while-resuming-international-travel

The paper advises each country to conduct a risk-benefit analysis and decide on the national priorities of permitting the return/expansion of international travel.

“WHO recommends that priority should be given to essential travel for emergencies, humanitarian actions (including emergency medical flights and medical evacuation), travel of essential personnel (including emergency responders and providers of public health technical support, critical personnel in transport sector such as seafarers[5] and diplomatic officers), and repatriation. Cargo transport should also be prioritized for essential medical, food and energy supplies. Sick travellers and persons at risk including elderly travellers and people with chronic diseases or underlying health conditions, should delay or avoid travelling internationally to and from areas with community transmission.

“There is no ‘zero risk’ when considering the potential importation or exportation of cases in the context of international travel. Therefore, thorough and continuous risk assessment and management will help identify, reduce and mitigate those risks, while balancing the socio-economic consequences of travel measures (or temporary restrictions) against potential adverse public health consequences.

“The decision process should include an analysis of the situation, taking into account the local context in countries of departure and destination. The following factors should be considered: local epidemiology and transmission patterns, the national public health and social measures for controlling the outbreaks in both departure and in destination countries; public health and health service capacity at national and subnational levels to manage suspect and confirmed cases among travellers, including at points of entry (ports, airports, ground crossings) to mitigate and manage the risk of importation or exportation of the disease; and the evolving knowledge about COVID-19 transmission and its clinical features.”

All countries need to find ways to handle the travel of essential personnel and those involved with emergencies. However, as the note makes clear, while expanding international travel is important for countries, there are a host of considerations that will make movement of non-essential travel dependent on a range of considerations, including the extent to which the pandemic is under control in either the country from which passengers are travelling or in the country of entry. The EU’s list of countries from which non-essential travelers will be permitted into the EU is an example of the approach suggested by the WHO focusing on the extent of the spread in the country from which travelers would leave to arrive in the EU.

What the WHO note makes clear is that the fastest route to reopening of international travel safely is for greater cooperation among countries to both control the spread of COVID-19, for greater transparency in how governments are addressing emerging situations, and for greater attention to the level of health care preparedness to handle surges including testing, tracing and any needed quarantine capabilities.

Considering how quickly situations can change in a given country, an additional challenge for countries reopening international travel will be the flexibility and responsiveness of the country to changing health conditions in trading partners (and in its own country) over time.

Conclusion

The challenges of individual nations in addressing the COVID-19 pandemic should be made more manageable through cooperation with other nations and the work of multilateral organizations including the World Health Organization. Many countries have worked cooperatively to share information, including on research and best practices. The WHO provides a great deal of support to countries and serves as a gathering point for information to improve transparency in the health care responses around the world.

WTO Members need to address trade restrictions that have arisen as countries attempt to slow the spread of the COVID-19 pandemic. Reopening trade and keeping it open are critical to the ability of countries to minimize the economic fallout that has occurred in the first half of 2020 and will continue at least in part in the third quarter and likely beyond. Yet, the ability to keep markets open and increase international travel is complicated by the myriad differences between nations on factors like the level of COVID-19 infection, the health care infrastructure and ability of that infrastructure to handle surges where they occur. The WHO plays a critical role in helping nations understand the tools available to address the pandemic and the considerations that need to be taken into account when reopening markets, including international travel.

COVID-19 Trade and Economic Fallout — Are current projections too optimistic?

· June 2, 2020 · COVID-19, United States, World Health Organization · , , , , , , , , , , , , , · No Comments

The COVID-19 pandemic is not simply a global health crisis but also a global economic crisis of unprecedented proportions.

The WTO has projected that global trade will decline between 13 and 32 percent in 2020 before rebounding in 2021.  https://www.wto.org/english/news_e/pres20_e/pr855_e.htm.

The IMF in its April 2020 update of the global economy modified its projection to show global GDP contraction of 3.0% for 2020 with a 6.1% contraction by advanced economies (U.S., -5.9%; Euro Area, -7.9%; Japan, -5.2) and a 1.0% contraction for emerging markets and developing economies.  https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020.

Developments in global trade and the national economy for the United States and the rising severity of the pandemic in some of the emerging and developing countries will likely cause future downward revisions to the global trade and economic fallout occurring in 2020 and reemphasize the importance of global cooperation both in responding to the pandemic but also in posturing the world for an economic recovery in the second half of 2020 and beyond.

United States data through April as an example

Gross domestic product in the United States declined 5.0% in the first quarter of 2020 based on a May 28, 2020 second estimate provided U.S. Department of Commerce’s Bureau of Economic Analysis.  https://www.bea.gov/sites/default/files/2020-05/gdp1q20_2nd_0.pdf.

With more than 40 million people filing for unemployment benefits between mid-March and the end of May, the projection for second quarter GDP from at least one source on June 1, 2020 is an extraordinary contraction of 52.8%.  See https://www.frbatlanta.org/cqer/research/gdpnow.  This compares to the Congressional Budget Office’s projection of a 39.6% decline in the second quarter.  https://www.cbo.gov/publication/56335.  The CBO estimate uses a 3.5% decline in GDP for the first quarter and an annual projected decline of 5.6% for 2020.

With the current first quarter data GDP contraction in the U.S. at 5.0% and the most recent data from a model similar to that used by the Bureau of Economic Analysis projecting a 52.8% contraction in the second quarter, it is highly likely that the U.S. contraction in 2020 will exceed the 5.9% projected in the April IMF data.

Indeed, with the number of bankruptcies being reported in the U.S. and the large number of small and medium sized companies that may not be able to return to operation as reopening occurs, the economic rebound may not be as strong as current projections estimate either.  The continued large number of new cases in the United States may be a contributing cause as some states either delay the speed of reopening or face larger resurgence of cases once reopening occurs because of the continued high level of COVID-19 in the population.

While the number of cases in the United States has at least stabilized and has been  trending down, the rate of decline is far lower than that experienced in western Europe.  For example, the United States continues to have the largest number of new confirmed cases of any country in the world, many weeks after the U.S. peak.  Indeed in today’s European Centre for Disease Prevention and Control report on the COVID-19 situation update worldwide, as of 2 June 2020, the U.S. has 302,679 cases reported in the last fourteen days of the continuing to grow global total of 1,477,362 new cases in the last fourteen days.  European countries have relatively few (7,973 for Spain; 7,311 for Italy, 9,188 for France and 6,818 for Germany).  https://www.ecdc.europa.eu/en/geographical-distribution-2019-ncov-cases.  In a prior post, data were shown for various countries over the period December 31, 2019 – May 24, 2020.  Most European countries show reductions from their peak two week period of 80-90% while the United States has shown declines of only 23.5% through May 24 (slightly more through June 2, 26.0%).  See COVID-19 – new hot spots amidst continued growing number of confirmed cases,  https://currentthoughtsontrade.com/2020/05/25/covid-19-new-hotspots-amidst-continued-growing-number-of-confirmed-cases/.  To the extent that IMF projections are based on infection rates that decline more rapidly than the actual U.S. experience with COVID-19, that would be another reason to believe the IMF projected contractions for the U.S. are too low. 

On the trade front, the United States was doing well until mid-March.  But the COVID-19 challenges that resulted in government actions led to 1st quarter 2020 exports from the U.S. of goods being down 1.2%, services exports down 21.5% for a total contraction of U.S. exports of 6.7%.  U.S. imports of goods were down 11.5%, led by contraction of imports from China due to various additional duties imposed on Chinese goods.  U.S. imports of services were down 29.9% for total imports being down 15.5%.  See Bureau of Economic Analysis, News Release BEA 20-23, May 28, 2020 at 7, https://www.bea.gov/news/2020/gross-domestic-product-1st-quarter-2020-second-estimate-corporate-profits-1st-quarter.

The U.S. Department of Commerce, U.S. Census Bureau puts out a “Monthly Advance Economic Indicators Report”.  The April 2020 report was released on May 29th and showed estimated data for imports and exports of goods (seasonally adjusted).  April exports for the U.S. were down 29.9% with individual sectors being down 5.3% (food, feeds and beverages) to 70.8% (automotive vehicles).  Similarly, U.S. imports were down 20.6% for April with sectors varying from being down 5.6% (foods, feeds and beverages) to 57.0% (automotive vehicles).  https://www.census.gov/econ/indicators/advance_report.pdf.

Thus, U.S. trade contractions in April suggest that the range put forward by the WTO (13-32% for the year) is probably the correct range. 

Rising Number of COVID-19 cases in South America and in India

The IMF revised 2020 projections from April likely understate the negative effects that emerging and developing countries are experiencing.  Specifically, Latin America and the Caribbean are seeing major outbreaks of COVID-19 cases with the peak not yet reached in a number of important countries like Brazil, Peru, Chile and Colombia and also in Mexico.  Depending on developments in these major countries and the spread in others, the likely economic contraction in the region could be significantly higher than the 5.2% contained in the April 2020 projections by the IMF.  Brazil was estimated to experience a GDP contraction of 5.3% by the IMF, but recent estimates show a steadily growing projected contraction, latest figures showing 6.25%.  See https://www.statista.com/statistics/1105065/impact-coronavirus-gdp-brazil/.  With the COVID-19 cases still growing in Brazil, the contraction in GDP for 2020 will likely continue to worsen.

Similarly, India was projected to have GDP growth of 1.9% in 2020.  The country’s challenges with COVID-19 cases are just starting with the current total number of confirmed cases at just under 200,000 but with nearly half of the cases reported in the last fourteen days (97,567 of 198,706).   Indeed, some recent projections by Oxford Economics now have India’s GDP contracting in 2020.  See https://www.icis.com/explore/resources/news/2020/06/01/10513907/india-gdp-growth-slows-to-4-2-lockdown-stays-at-manufacturing-hubs.

Other countries are also seeing increasing case numbers and the global totals of new cases have not peaked as yet which likely mean greater numbers of cases than most models have anticipated.  If so global contraction could be significantly worse than the April estimates of the IMF.

High national debt levels are growing higher   

The collapse of economic activity even for a few months is reducing tax revenues, increasing government spending in many jurisdictions and worsening national debt levels.  For example, in the United States the Congressional Budget Office blog from April 24 estimated that the U.S. budget deficit in 2020 and 2021 will be $2.7 billion and $1.1 billion higher than earlier estimates and that federal debt held by the public is likely to grow from 79% of GDP in 2019 to 101% of GDP in 2020 and 108% of GDP in 2021.  https://www.cbo.gov/publication/56335.  The actual deficits and federal debt are likely to be significantly higher as the CBO estimates are based on forecasts for GDP contraction that already understates the severity experienced through the first quarter and assumes no further federal assistance will be required to pull the economy out of the steep contraction being experienced in the second quarter.  As governors across the country have made clear, the serious budget shortfalls being experienced by the states because of closed businesses, reduced revenues and increased expenditures are not sustainable.  If these 2020 shortfalls are not addressed through federal legislation, the outcome will be large reductions in state and local services and massive layoffs of state and municipal employees including police, fire, health care and teachers.  So either the budget shortfall of the federal government is understated because of additional stimulus funding needs or the expected recovery of the economy (and hence government revenues) is overstated because of the challenges for many states.

Virtually every country is facing budget challenges as they attempt to address the COVID-19 pandemic and its economic fallout.  See, e.g., articles on growing budget deficits for France, Italy, Brazil and India; https://www.reuters.com/article/us-health-coronavirus-France-budget/france-more-than-doubles-crisis-package-cost-to-100-billion-euros-idUSKCN21R2J2; https://www.nytimes.com/reuters/2020/05/22/world/americas/22reuters-brazil-economy.html; https://www.reuters.com/article/us-health-coronavirus-italy-budget-exclu/exclusive-italy-sees-2020-budget-deficit-near-10-of-gdp-source-idUSKBN21Y2U9; https://economictimes.indiatimes.com/news/economy/indicators/indias-fiscal-deficit-may-shoot-to-6-2-of-gdp-in-fy21-fitch-olutions/articleshow/74928660.cms?from=mdr#:~:text=NEW%20DELHI%3A%20India’s%20fiscal%20deficit,Fitch%20Solutions%20said%20on%20Wednesday.  

Budget shortfalls, the need to borrow more money and the pressure to reduce national, regional and local services all affect the ability of nations to contribute to international institutions, to provide financial assistance to the poorest countries and to facilitate short-, medium- and longer-term growth.

Conclusion

The global COVID-19 pandemic is creating economic havoc in addition to the heavy health toll on countries around the world.  A global challenge of this magnitude hasn’t been faced since World War II.  The projections that have been made by multilateral and national organizations have been for huge contractions in world trade and in global economic growth.  Unfortunately, the estimates at least on global GDP contraction are likely too optimistic both in terms of the severity of the second quarter 2020 contraction and the anticipated level of  second half 2020 recovery.  Moreover, there is likely to be significantly more national stimulus programs needed to help economies recover increasing already huge national debts for many countries and the likely greater need for trade financing and debt support for many developing and least developed countries because of the severity of the global trade and GDP contraction. 

The challenges being faced affect the health and livelihood of billions of people but are occurring at a time of reduced trust in multilateral institutions, increased trade frictions between major nations and groups of nations and a lack of strong leadership within and among nations.  

How severe the damage to the world turns out to be from the pandemic will depend on –

(1) whether countries come together to ensure open markets;

(2) whether countries both coordinate information about and promote expanded production of essential medical goods to ensure adequate and equitable availability to all at affordable prices,

(3) whether countries support efforts of both public and private players on the development of effective vaccines and therapeutics and facilitate the sharing of information while ensuring equitable availability to all at affordable prices where breakthroughs occur,

(4) whether countries support multilateral organizations’ efforts and individually support the bolstering of health care infrastructure of least developed countries and some developing countries where COVID-19 cases could easily overwhelm internal capabilities;

(5) whether countries cooperate for a strong global recovery by pursuing stimulus programs that don’t distort markets and create other challenges to global participation, and by providing multilateral organizations with the resources to address debt and trade financing needs of the poorest among us.

There are some efforts to address each of the five items above although the U.S. announced withdrawal from the World Health Organization handicaps efforts reviewed in (3). 

More needs to be done and could be done with greater cooperation among the top 50 countries in the world.  However, we may be at the maximum of what is the art of the possible at the moment.  For the 7.8 billion people living on earth in 2020, let us hope that more is possible quickly. 

 

 

 

 

 

 

U.S. Withdrawal from the World Health Organization and Decision to Revoke Preferential Treatment for Hong Kong — Reduced Cooperation as COVID-19 Pandemic Rages on

· May 30, 2020 · China, COVID-19, U.S. - China relationship, World Health Organization · , , , · No Comments

On May 29, 2020, President Trump indicated that the United States was withdrawing from the World Health Organization (“WHO”) because of the WHO’s failure to adopt reforms the U.S. had demanded and the belief of a bias within the WHO towards China and China’s failure to provide timely information on the start of the virus and the likely nature of the problem. https://www.nytimes.com/2020/05/29/us/politics/trump-hong-kong-china-WHO.html. This followed the U.S.’s earlier temporary withholding of funds from the WHO while awaiting developments on reforms.

President Trump also indicated that in light of actions by China to assert security controls over Hong Kong, the U.S. viewed China as violating its commitment to maintain “one China, two systems” and would accordingly be taking actions to remove special treatment provided Hong Kong in a wide range of areas (extradition, export controls, etc.) and would be treating Hong Kong as part of China for tariffs, export controls, etc. https://www.wsj.com/articles/u-s-to-cancel-visas-for-some-chinese-graduate-students-11590744602.

Not surprisingly, China has reacted negatively to the statements of President Trump on Hong Kong and has threatened to take retaliatory actions if the U.S. takes actions contrary to China’s interests and indicated that any U.S. action was doomed to fail. https://www.bloomberg.com/news/articles/2020-05-30/china-says-us-action-on-hong-kong-doomed-to-fail; https://www.cnbc.com/2020/05/30/china-says-us-action-on-hong-kong-doomed-to-fail.html.

Concerns have also been raised that U.S. action would be a double-edged sword in light of the large trade surplus the U.S. has with Hong Kong and the enormous presence of U.S. businesses in Hong Kong. For example, based on U.S. Census data as compiled by the U.S. International Trade Commission, the United States had a trade surplus with Hong Kong (total exports – general imports) of $26.086 billion in 2019 [the trade surplus based on domestic exports – imports of consumption being lower at $11.845 billion]. While China has not identified actions it is considering, harming U.S. interests in Hong Kong would obviously be one avenue China might take.

The trade implications, in terms of U.S. imports from Hong Kong, are relatively minor. If imports from Hong Kong are treated as imports from China, imports of items subject to additional duties from the 301 investigation would be relatively minor. That is because U.S. imports for consumption from Hong Kong in 2019 were just $4.646 billion, with half of that being under HS 9810 for articles that have been imported after exportation, after repair, etc. If China were to impose additional duties on U.S. exports to Hong Kong, the effect would be larger. U.S. domestic exports to Hong Kong in 2019 were $16.491 billion.

Increased tensions; reduced cooperation

Whatever the merits of the actions being taken by the United States (and the reactions anticipated from China), the results are predictable — we are entering a period of reduced cooperation and coordination of actions to address the pandemic as well as increasing bilateral tensions between the U.S. and China at a time of global economic contraction. This despite the fact that cooperation has been less than robust even before the current increased tensions.

In the trade arena, the pandemic continues to grow in severity as confirmed cases continue to climb globally with the hot spots shifting. Cooperation at the WTO and G20 is critical in terms of keeping markets open, minimizing export restraints, addressing logistics needs in a manner that preserves the health needs of importing countries, avoiding inventory builds of agricultural products, the introduction of export restraints where there is no underlying agriculture production problem globally, taking actions to expand production of medical goods to meet the demand surge flowing from the pandemic, ensuring transparency, and promoting best practices. The world is struggling already to achieve the trade needs identified above. Reduced cooperation will make the challenges that much harder.

Similarly, the search for vaccines, therapeutics and diagnostics to effectively prevent, treat and identify medical needs requires global cooperation, information sharing and the work of a multilateral institution like the WHO and various NGOs to ensure all peoples who need these products have equitable and affordable access to them when developed. Trials on potential vaccines are at various stages in China, in the United States and in Europe and possibly other areas. Often the research is amongst companies working jointly from multiple jurisdictions. Which research project or projects will prove effective, if any, is obviously not known. Implications of a lack of cooperation between countries should effective vaccines, therapeutics and diagnostics be developed are for the possible hording of products, refusal to sell to other countries or delays in sharing and other actions that would make global escape from the pandemic harder, longer and more deadly.

And for many developing and least developed countries, the pandemic, whether significantly affecting individual countries directly, threatens most countries through contraction in global trade (estimated to be between 13 and 32% by the WTO in 2020), limited financial capabilities to address budget shortfalls and increased unemployment and challenges to existing health care infrastructure from the pandemic. Multilateral institutions like the World Bank and the IMF and others are critical here but are dependent on the cooperation of key members like the U.S., China, and others. While these organizations have been working effectively to date, the size of the challenge posed by the pandemic which is unprecedented will likely result in additional funding needs in the coming months or years which will require cooperation to meet.

Conclusion

The United States and China have very different economic and political systems. In the trade sphere, the United States has reached the conclusion that coexistence of such disparate systems doesn’t make sense under the World Trade Organization’s rules which are premised on market-based economic policies. The U.S. actions vis-a-vis China on trade have been an effort to achieve reciprocity with China, a situation not possible under the existing WTO rules. That the U.S. effort to obtain reciprocity in fact is proving contentious is hardly surprising and will not likely lessen in bilateral tensions in the near future.

In the political sphere, our two systems have resulted and will continue to result in periodic tensions, such as we are currently witnessing over the actions of China on security measures in Hong Kong.

Historically, major nations who view each other as adversaries have been able to cooperate effectively on issues of mutual interest. That was true during the cold war between the U.S. and the Soviet Union on certain issues. Whether the U.S. and China view each other as adversaries as well as competitors at the present time, the same ability to cooperate between them should be true when looking at issues such as addressing the pandemic effectively and efficiently.

Let us hope that regardless of the bilateral tensions and of the U.S. departure from the WHO, all WTO Members can step up their efforts to keep markets open and transparent and that governments will cooperate to ensure that medical developments are available to all on an equitable and affordable basis and that the financial resources are available to help those least able to weather the pandemic’s effects alone to survive and move forward.