Malta

Trade and Health at the WTO’s 12th Ministerial Conference

An area of focus the last two years at the WTO has been addressing the COVID-19 pandemic. This has included various statements from Members, monitoring by the Secretariat of export and import actions either impeding or expediting the flow of medical goods and services, and various proposals for actions to address the pandemic or for future preparation. The proposal for a waiver from various TRIPS obligations from India and South Africa (and now supported by a range of countries) is one proposal. A number of countries (Ottawa Group) have put forward a proposal for a trade and health initiative to permit a more rapid response by WTO Members in the future. See COVID-19 AND BEYOND: TRADE AND HEALTH, COMMUNICATION FROM AUSTRALIA, BRAZIL, CANADA, CHILE, THE EUROPEAN UNION, JAPAN,
KENYA, REPUBLIC OF KOREA, MEXICO, NEW ZEALAND, NORWAY, SINGAPORE AND SWITZERLAND, 24 November 2020, WT/GC/223; November 27, 2020:  The Ottawa Group’s November 23 communication and draft elements of a trade and health initiative, https://currentthoughtsontrade.com/2020/11/27/the-ottawa-groups-november-23-communication-and-draft-elements-of-a-trade-and-health-initiative/. The WTO Director-General and the Members have engaged in a number of meetings with other multilateral organizations and the private sector exploring options for expanding production of COVID-19 vaccines and expanding distribution to countries in need.

Amb. David Walker of New Zealand has been tasked to work with Members to see if a declaration on trade and health can be agreed to at the 12th WTO Ministerial Conference that starts on November 30.

A former Deputy Director-General of the WTO, Alan Wolff, provided his thoughts on likely outcomes at the 12th Ministerial during a WITA virtual event on November 18th and opined that a declaration on trade and health was likely only if there was some resolution of the waiver proposal for vaccines. See PIIE, Alan Wm. Wolff, Defining Success for MC12, 18 November 2021, Presented at WITA, slides 5, 7, 10-11. Slide 10 is presented below.

I have written before on the challenges of the waiver of TRIPs obligations proposal put forward by India and South Africa. See, e.g., November 2, 2020:  India and South Africa seek waiver from WTO intellectual property obligations to add COVID-19 – issues presented, https://currentthoughtsontrade.com/2020/11/02/india-and-south-africa-seek-waiver-from-wto-intellectual-property-obligations-to-address-covid-19-issues-presented/.

The EU and some others have not agreed to a waiver but have focused on making compulsory licensing more effective. See, e.g., DRAFT GENERAL COUNCIL DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH IN THE CIRCUMSTANCES OF A PANDEMIC, COMMUNICATION FROM THE EUROPEAN UNION TO THE COUNCIL FOR TRIPS, 18 June 2021, IP/C/W/681.

Thus, the outcome on trade and health heading into the Ministerial is uncertain. See WTO News Release, Members to continue discussion on a common COVID-19 IP response up until MC12, 19 November 2021, https://www.wto.org/english/news_e/news21_e/trip_18nov21_e.htm.

A driver behind the waiver proposal has been the limited availability of vaccines to least developed and some developing countries. Vaccine equity is the shorthand term for the concerns about availability and affordability of vaccines for all people. While the issue of availability and access is complicated and beyond just WTO competence, the world’s vaccine manufacturers have ramped up capacity and production, governments have belatedly gotten involved in expanding donations and some of the major bottlenecks to getting vaccines to COVAX in 2021 appear to be resolved going forward, though many LDCs and developing countries will not get large volumes of vaccines until 2022.

The pandemic and the challenges of ramping up production and ensuring access to all people has been the subject of dozens of my prior posts. See, e.g., October 12, 2021: See WTO Information Notes on COVID-19 Vaccine Production and Potential Bottlenecks, https://currentthoughtsontrade.com/2021/10/12/wto-information-notes-on-covid-19-vaccine-production-and-potential-bottlenecks/; September 27, 2021:  Global efforts to expand COVID-19 vaccine production and distribution — an all hands on deck effort being led by the U.S. and EU with active support of many governments and others, https://currentthoughtsontrade.com/2021/09/27/global-efforts-to-expand-covid-19-vaccine-production-and-distribution-an-all-hands-on-deck-effort-being-led-by-the-u-s-and-eu-with-active-support-of-many-governments-and-others/; May 6, 2021:  COVID-19 vaccines — role of WTO and developments at May 5-6, 2021 General Council meeting on TRIPS Waiver, https://currentthoughtsontrade.com/2021/05/06/covid-19-vaccines-role-of-wto-and-developments-at-may-5-6-2021-general-council-on-trips-waiver/.

Prior to 2021, global capacity for all vaccines was estimated at 5 billion doses/year. In 2021, COVID-19 vaccine production alone will be around 10 billion doses. As of November 20, 2021, UNICEF’s COVID Vaccine Market Dashboard shows 8.624 billion doses delivered to countries and territories of which COVAX deliveries were 524 million (and 565 million delivered or cleared for shipment). https://www.unicef.org/supply/covid-19-vaccine-market-dashboard (visited on November 20, 2021).

Administration of vaccine doses to populations has been less than doses delivered. Data from Blomberg’s COVID Vaccine Tracker as of November 19, 2021 9:34 a.m., shows 7.63 billion doses administered. https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/ (visited November 20, 2021). From the Vaccine Tracker data, there are a large number of countries or territories (95) that have administered 100 or more doses to every 100 people in the country. As major vaccines like Pfizer and Moderna need two shots, and as some countries have started supplying boosters, data are not necessarily comparable across countries in terms of percentage of people vaccinated. But the doses administered per 100 people is a reasonable measure of equitable distribution. A review of the data do show large differences in administration of doses. However, which countries or territories have administered large numbers of doses/100 people is not tied to a country or territory having vaccine production capacity, nor is it tied to level of income in the country or territory.

For example, the top ten countries or territories for administering doses of COVID-19 vaccine in the Bloomberg report were:

Gibraltar, 279.2 doses/100 people

Cuba, 244.2 doses/100 people

Chile, 207.5 doses/100 people

Maldives, 204.8 doses/100 people

UAE, 201.6 doses/100 people

Bahrain, 191.7 doses/100 people

Uruguay, 190.7 doses/100 people

Malta, 185.9 doses/100 people

Cayman Islands, 183.7 doses/100 people

Seychelles, 182.7 doses/100 people

China ranked 16th at 172.1 doses/100 people; the United States ranked 66th at 134.0/100 people; EU members were generally greater than 100 doses/100 people but had several member states below that (Bulgaria at 45.4 doses/100 people; Romania at 73.0 doses/100 people) and had an overall average of 138.7. Morocco had the most doses/100 people for a country from Africa — 136.5.

Twenty-eight countries or territories have administered between 75 and 99.4 doses/100 people (including India at 84.6 doses/100 people); twenty-three countries or territories have administered between 50 and 73 doses/100 people (including Rwanda at 65.2 doses/100 people and Botswana at 52.8 doses/100 people); twenty-two countries or territories have administered between 25 and 47.1 doses/100 people (including South Africa at 41.4 doses/100 people); thirty-three countries or territories have administered between 0.2 and 18.7 doses/100 people.

Obviously, there are a large number of countries (including some developed countries) where vaccines administered are far too limited. For many developing and LDC countries with low numbers of doses administered, the failure of supplies to be delivered to COVAX for shipment is certainly a significant cause. India’s need to keep vaccine doses at home was a major cause of the shortfall to COVAX in 2021, but not the only reason.

Belatedly larger volumes of vaccine doses are making it to those in greatest need. The increases flow from a combination of increased production volumes globally, India resuming exports, increases in donations from a number of countries and more. For example, the UNICEF data on deliveries shows that there have been some significant increases in doses available to the countries or territories with very low doses administered levels. For example, Nigeria shows only 4.6 doses/100 people administered in the Bloomberg vaccine tracker data. The UNICEF vaccine market dashboard shows roughly three times the number of doses delivered to Nigeria as are reported administered (29.689 million vs. 9.254 million). Benin has 1.968 million doses delivered and just 0.347 million administered (2.9/100 people). It is also true for countries receiving doses from COVAX with higher existing doses administered. For example, Zimbabwe which had 42.3 doses administered per 100 people in the Bloomberg data showed nearly twice as many doses delivered in the UNICEF data as had been administered (11.322 million doses delivered vs. 6.31 million doses administered).

What the two reports suggest is that while vaccine equity is a real issue, the causes of the very different experiences of different countries or territories in the same general area are complex and not easily or completely understood by the current discussion. For example, Zimbabwe’s per capital GNI in 2020 was $1,090 and yet they had administered 42.3 COVID vaccine doses/100 people. Cameroon, with a per capita GNI in 2020 of $1,100, had COVID vaccines administered of only 2.4/100 people. Similarly, Morocco had a 2020 per capita GNI of $2,980 and COVID vaccines administered of 136.5/100 people. In comparison, South Africa with a much higher per capita GNI in 2020 ($5,410) had COVID vaccines administered at less than 1/3rd the rate of Morocco – 41.4 vs.136.5/100 people. Nigeria, with a 2020 per capita GNI of $2,000 had administered only 4.6 COVID vaccines/100 people.

Thus, those working on improving vaccine equity need to identify and address the other causes besides vaccine production and availability through COVAX in the coming months.

I paste below the data from the Bloomberg COVID Vaccine Tracker ranked in descending order of COVID vaccine doses administered per 100 people as of November 19, 2021.

Countryvaccines

World COVID-19 pandemic peaks on November 26 and starts to slowly recede

The most recent surge in COVID-19 cases (up from 3.57 million cases over a fourteen day period in early August to over 5 million for fourteen days on October 22 to over 8 million new cases for fourteen days on November 17), seems to have peaked on November 26 with 8,296,264 new cases over fourteen days and has been slowly receding for the last three days, down to 8,142,629 new cases during the period November 16-29. Total cases since the end of December 2019 now stand at 62,271,031 as of November 29 according to the European Centre for Disease Prevention and Control (ECDC) publication “COVID-19 situation update worldwide, as of 29 November 2020”.

The World Health Organization puts out a publication that tracks cases and deaths on a weekly basis. COVID-19 Weekly Epidemiological Update (data as of 22 November). While it breaks countries and territories into different configuarations that the ECDC, the publication shows new cases in the period November 16-22 declining 6% in Europe and in South East Asia while increasing 11% in the Americas, 5% in the Eastern Mediterranean, 15% in Africa and 9% in the Western Pacific. Because of the large spike in cases in the September – November period in many parts of the world, deaths in the November 16-22 period increased in all regions — up 10% in Europe, 15% in the Americas, 4% in South-East Asia, 10% in the Eastern Mediterranean, 30% in Africa and 1% in the Western Pacific. The latest report is embedded below.

20201124_Weekly_Epi_Update_15

The graphs in the WHO publication show by region the trajectory of new cases and deaths over time. The chart showing aggregate data show a flattening of total new cases in the last weeks of November while the number of deaths globally are sharply increasing.

The WHO Africa region peaked in the summer and has declined until the last few weeks when there has been some increase in both cases and deaths.

The Americas saw a peak in both new cases and deaths in the July period with some declines in new cases until the second half of September when the current surge started and accelerated in November. Deaths declined until early October before starting to grow again.

The Eastern Mediterranean peaked in May-June for both cases and deaths, declined through August/September and have surged to new heights with continued upward trajectory as of November 22.

The WTO European Region had an early surge of cases and deaths in the March-April period. Deaths receded sharply through August. While new cases have increased since summer, there was a massive increase in the September – end of October period in new cases and rising deaths through November.

The WHO South-East Asia region saw a huge increase in cases and deaths in the May-August period, peaking in early September and declining since then. Much of the data for the region reflect activity in India.

The Western Pacific Region has had several peaks in terms of deaths and in new cases, though the numbers are the lowest of any WHO region. The latest peak in new cases was in early August with some increase in the October-November period. Deaths last peaked in early September and have declined through November.

The United States

Turning back to the ECDC data, the United States continues to have more confirmed cases (13,246,651) than any other nation and more confirmed deaths from COVID-19 (266,063) than any other nation. The United States is also still experiencing a surge in new cases and rising deaths. October 31 was the first day that ECDC data show the U.S. recording 100,000 new cases in a single day. Since November 5, the U.S. has had more than 100,000 new cases every day up to November 29. It is the only country to record one million new cases in a week and the only country to record two million new cases in fourteen days. For the last fourteen days, the U.S. recorded 2,341,760 new cases. The U.S., which accounts for 4.3% of the global population, accounts for 21.27% of all COVID-19 cases that have been reported since December 2019 and accounted for 28.76% of new cases in the last two weeks. The rate of increase remains high for the United States — up 31.67% from the 1,778,530 new cases in the two weeks ending November 15. There are concerns that the number of new cases will continue to increase into the new year based on the high rate of infections in many parts of the country, major potential spreading events around holidays in November (Thanksgiving) and December, and limited compliance with basic requirements for limiting the spread of the virus.

The number of deaths from COVID-19 that the U.S. accounts for has declined from roughly 20% to 18.30% as of November 29. In the last two week, while the U.S. has the largest number of deaths in the two weeks, the percent of total deaths accounted for by the U.S. in the November 16-29 period was 14.65%. However, many cities, communities and even states are at or nearing the limits of the health care capacity with hospitalizations now about 90,000, limits on health care professionals with the surging cases and some challenges on personal protective equipment. Thus, models used by the government projects a continued rise in the number of deaths in the coming months.

While the first vaccine could receive emergency approval for distribution in the U.S. as early as December 10, and the U.S. could have two or three vaccines in distribution in early 2021, the United States will unfortunately likely be a major part of the continued high rate of infections and deaths well into 2021.

Europe

While Europe had faced early challenges in a number of western European countries in February-April and very high death rates in a number of countries, the second wave of cases following the relaxation of restrictions in time for summer vacations accounted for the vast majority of the incrase in new cases during the October and early November time period. In earlier posts, I showed that Europe and the U.S. accounted for nearly all of the increase from 5 million new cases in the two weeks ending October 22 to the more than 8 million new cases in the two weeks ending November 17. See November 17, 2020, New COVID-19 cases over a fourteen day period continue to soar past eight million, up from five million on October 22, https://currentthoughtsontrade.com/2020/11/17/new-covid-19-cases-over-a-fourteen-day-period-continue-to-soar-past-eight-million-up-from-five-million-on-october-22/

While some of the major countries, including France, Italy, Spain, the United Kingdom and others have seen significant reductions in the number of new cases in recent weeks from the extraordinary figures recorded in late October, early November, numbers remain very high for a number of countries including Poland, Portugal, Serbia, Croatia, Hungary, Lithuania and Luxembourg — all of whom had new cases/100,000 population in the last fourteen days that were higher than the United States.

Because deaths lag new cases by a number of weeks, it is perhaps less surprising that much of Europe had deaths/100,000 population in the last fourteen days that were higher than the United States, most at rates that were two-three times the U.S. rate. The rate for the world in total was 1.82 deaths per 100,000 population for the November 16-29 period. The U.S. was 3.38 times the global average at 6.22 deaths per 100,000 population in that two week period. The following 25 European countries exceeded the U.S. rate: France (11.76 deaths/100,000 population); Italy (16.04); Spain (8.31); United Kingdom (9.40); Armenia (12.81); Austria (13.47); Belgium (18.84); Moldova (6.50); Poland (16.65); Portugal (10.30); Romania (11.50); Serbia (7.11); Switzerland (14.98); Bulgaria (23.69); Croatia (15.92); Czechia (18.74); Greece (11.08); Hungary (16.12); Lithuania (8.12); Luxembourg (13.19); Malta (6.79); Slovenia (19.85); Bosnia and Herzegovina (20.75); Georgia (13.19); and North Macedonia (20.12).

With new restrictions in recent weeks bringing new cases down in a number of European countries, death rates should start to decline as well in the coming weeks. Challenges in terms of superspreader events in Europe include holiday travel and events and winter holidays and sports. Germany has proposed placing restrictions on the ski season to try to minimize increased cases from a sport popular across much of Europe. See DW, 26 November 2020, Coronavirus: Germany seeks EU-wide ban on ski trips, https://www.dw.com/en/coronavirus-germany-seeks-eu-wide-ban-on-ski-trips/a-55732273.

The EU has contracts with at least six pharmaceutical companies or groups for vaccines if approved. The EU and United Kingdom will start to see vaccine dosages within weeks assuming approval in their jurisdictions.

Other countries

While much of the rest of the world has not seen great increases in the number of cases that is not true for all countries. For example, Iran which had 136,753 new cases in the November 2-15 period showed 186,274 new cases in the November 16-29 period (+36.21%). Jordan, which has a total number of cases of 210,709 since the end of December has recorded 65.54% of that total in the last four weeks (68,698 new cases during November 2-15; 69,404 new cases during November 16-29). Similarly, Morocco which has a total of 349,688 cases since December 2019 has more than 37% recorded in the last four weeks (69,127 during November 2-15; 61,477 during November 16-29).

In the Americas the following countries in addition to the United States have two week totals to November 29 greater than 100,000 new cases: Argentina (108,531); Brazil (441,313); Colombia (108,609). The following countries besides the United States have more than one million cases since late December 2019: Argentina (1,413,362); Brazil (6,290,272); Colombia (1,299,613), Mexico (1,100,683). Eleven other countries have more than 100,000 cases (with Peru having 960,368). Other than the U.S., countries are facing different trend lines, many down, some showing increases (e.g., Brazil, Canada, Dominican Republic, Paraguay).

In Asia, while India continues to see declines in the number of new cases, Indonesia, Israel, Japan, Kazakhstan, Malaysia, Pakistan, Palestine, South Korea, showed increased in the most recent two weeks, some quite large. This is in addition to Iran reviewed previously.

In Africa, South Africa has the most cases and saw an increase from 23,730 new cases during November 2-15 to 35,967 during November 16-29. Morocco was reviewed above. Most other major countries in Africa saw declines in recent weeks.

Conclusion

The world in the first eleven months of 2020 has struggled to get the COVID-19 pandemic under control with several major surge periods. The global number of new cases seems to have plateaued over the last week or so at extraordinarily high levels and the death rates has been climbing after a long period where deaths appeared to be declining. It is likely that the death rate will continue to increase for the rest of 2020.

After a period during the summer and early fall where restrictions in a number of countries were being relaxed, many countries in the norther hemisphere are reimposing various restrictions in an effort to dampen the spread of the coronavirus. While trade has significantly rebounded from the sharp decline in the second quarter of 2020, services trade remains more than 30% off of 2019 levels driven by the complete collapse of international travel and tourism. Many WTO members have put forward communications on actions that could be considered to speed economic recovery. The most recent was the Ottawa Group’s communication about a possible Trade and Health Initiative. See November 27, 2020, The Ottawa Group’s November 23 communication and draft elements of a trade and health initiative, https://currentthoughtsontrade.com/2020/11/27/the-ottawa-groups-november-23-communication-and-draft-elements-of-a-trade-and-health-initiative/.

The WTO TRIPS Council has a request for a waiver from most TRIPS obligations for all WTO Members on medical goods and medicines relevant to COVID-19 on which a recommendation is supposed to be forwarded to the General Council by the end of 2020 though it is opposed by a number of major Members with pharmaceutical industries. See November 2, 2020, India and South Africa seek waiver from WTO intellectual property obligations to add COVID-19 – issues presented, https://currentthoughtsontrade.com/2020/11/02/india-and-south-africa-seek-waiver-from-wto-intellectual-property-obligations-to-address-covid-19-issues-presented/.

With vaccines very close to approval in major markets like the United States and the European Union, there will be increased focus on efforts to ensure availability of vaccines and therapeutics and diagnostics globally on equitable and affordable terms. GAVI, CEPI and the WHO have been leading this initiative with the support of many governments and private sector players. Pharmaceutical companies also have global distribution plans being pursued in addition to the above efforts.

So there hopefully is light at the end of the tunnel that the COVID-19 pandemic has imposed on the world. But vaccines without vaccinations won’t solve the pandemic’s grip. So communication and outreach globally will be critical to seeing that available vaccines are properly used. And all peoples need to be able to access the vaccines, some of which will be less available simply because of the infrastructure needs to handle the vaccines.

Trade policy options to minimize trade restrictions coupled with global cooperation and coordination should result in the world being able to rebuild in 2021 and beyond as more and more of the world is vaccinated.

Multilateral efforts to help the poorest countries deal with debt, make available trade finance and other actions continue to be a pressing need. Better plans and preparation for pandemics of the future are clearly needed. Reports suggest that many of the poorest countries have experienced loss of a decade or more of economic advancement during the pandemic. Building back greener and in a sustainable manner is critical for all.

The efforts of developed country governments and others to provide the stimulus domestically to reduce the downward spiral of the individual national economies and the global economy has been critical to limiting the damage at home and abroad. But the assumption of large amounts of debt will also pose significant challenges moving forward because of the greatly heightened national debt/GDP ratios that have developed and may restrict options for individual governments moving forward.

What is certain is that 2020 will be remembered as a year in which a virus inflicted enormous damage to the global health and to the global economy. Collectively, the level of spread has been far greater than should have been possible. Many nations were not prepared. Some, like the United States, exacerbated the problems through a lack of national government planning and messaging. Others like many in Europe, having done a good job of controlling the spread in the early months, made major mistakes as they opened up for summer vacations and didn’t deal with the problems that resulted from the reopening and experienced breathtaking surges which roughly doubled the global daily rate of new cases in five-six weeks and have led to the reimposition of a series of restrictions to try to tame the pandemic a second time. We collectively are better than the results achieved to date. The number of deaths in advanced countries is simply disgraceful.

2021 offers the opportunity for the world to come together and put COVID-19 behind us. Whether we will come to the end of 2021 and feel that this global nightmare is behind us and that there are national and global game plans to rebuild in a greener and more sustainable manner with greater opportunities for all is the question. Hopefully, the answer will be yes.

The collapse of tourism during the COVID-19 pandemic

As any of us knows all too well, the COVID-19 pandemic and resulting government efforts to control the spread of the virus has led to sharp reductions in the use of various services, including restaurants, hotels, entertainment venues and travel. This has been true domestically in many countries and has been even more obvious when one looks at international travel and tourism.

In a news release from the UN World Tourism Organization (“UNWTO”) on 28 April 2020, the toll on global tourism is reviewed, and the facts are shocking. See https://webunwto.s3.eu-west-1.amazonaws.com/s3fs-public/2020-04/200428%20-%20Travel%20Restrictions%20EN.pdf. The news release is copied below and is followed by the full report (embedded).

“100% OF GLOBAL DESTINATIONS NOW HAVE COVID-19 TRAVEL RESTRICTIONS, UNWTO REPORTS

Madrid, Spain, 28 April 2020 – The COVID-19 pandemic has prompted all destinations worldwide to introduce restrictions on travel, research by the World Tourism Organization (UNWTO) has found. This represents the most severe restriction on international travel in history and no country has so far lifted restrictions introduced in response to the crisis.

“Following up on previous research, the latest data from the United Nations specialized agency for tourism shows that 100% of destinations now have restrictions in place, of these, 83% have had COVID-19-related restrictions in place already for four or more weeks and, as of 20 April, so far no destination has lifted them.

“UNWTO Secretary-General Zurab Pololikashvili said: ‘Tourism has shown its commitment to putting people first. Our sector can also lead the way in driving recovery. This research on global travel restrictions will help support the timely and responsible implementation of exit strategies, allowing destinations to ease or lift travel restrictions when it is safe to do so. This way, the social and economic benefits that tourism offers can return, providing a path to sustainable recovery for both individuals and whole countries.’

Tracking Restrictions by Time and Severity

“As well as a general overview, the UNWTO research breaks down the type of travel restrictions that have been introduced by destinations in all of the global regions, while also plotting the evolution of these restrictions since 30 January – when the World Health Organization (WHO) declared COVID-19 a Public Health Emergency of International Concern. The latest analysis shows that, of 217 destinations worldwide:

“• 45% have totally or partially closed their borders for tourists – ‘Passengers are not allowed to enter’

“• 30% have suspended totally or partially international flights – ‘all flights are suspended’

“• 18% are banning the entry for passengers from specific countries of origin or passengers who have transited through specific destinations

“• 7% are applying different measures, such as quarantine or self-isolation for 14 days and visa measures.

“Against this backdrop, UNWTO has been leading calls for governments worldwide to commit to supporting tourism through this unprecedented challenge. According to Secretary-General Pololikashvili, the sudden and unexpected fall in tourism demand caused by COVID-19 places millions of jobs and livelihoods at risk while at the same time jeopardising the advances made in sustainable development and equality over recent years.” (emphasis and italics in the original)

TravelRestrictions-28-April

UNWTO data show roughly 1.5 billion arrivals of travelers around the world in 2019 following a long-term growth record in arrivals, accounting for 10% of global jobs and $1.5 trillion of international tourism receipts. See https://www.unwto.org/healing-solutions-tourism-challenge. The UNWTO in late March projected a decline in international tourism receipts for 2020 of 20-30% from 2019 (or $300-450 billion). See https://webunwto.s3.eu-west-1.amazonaws.com/s3fs-public/2020-03/200327%20-%20COVID-19%20Impact%20Assessment%20EN.pdf. The situation is likely more precarious as we enter May with the continued global economic harm flowing from government actions to address the continued strong expansion of number of confirmed cases worldwide and deaths. As noted, every government with international tourism has introduced and continues to maintain travel restrictions. Stay at home orders have closed restaurants (other than take out or delivery), hotels, entertainment venues and more.

While all countries and territories are adversely affected by the toll on international tourism from the pandemic, the harm is greater to island nations and poorer countries where tourism is a high percentage of total GDP. Even for advanced countries, the importance of tourism can be critical to a functioning economy. In the EU, a recent article indicates that 10% of GDP is from tourism with some countries (Greece and Malta) having much higher percentages (20-25%). See https://www.dw.com/en/when-and-how-post-coronavirus-travel-in-the-eu-is-up-in-the-air/a-53273416

Commitments for tourism and travel services under the World Trade Organization

Many World Trade Organization Members have undertaken tourism and travel-related service commitments. As noted on the WTO webpage on Tourism and travel-related services, https://www.wto.org/english/tratop_e/serv_e/tourism_e/tourism_e.htm, more than 125 WTO members have made services commitments in the tourism area (hotels, restaurants (including catering), travel agencies, tour operator services tourist guide services, etc.). A note from the WTO Secretariat in 2009 provides information on commitments undertaken by Member (at that time, more countries have joined the WTO in the decade since the note) as well as providing other information on travelers by country and receipts. See S/C/W/298 (8 June 2009) embedded below.

SCW298

But, as with trade in goods, trade in services has general exceptions which permit Members to adopt or enforce measures “necessary to protect human, animal or plant life or health” as long as such measures “are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services”. GATS Article XIV(b). Measures adopted in response to the COVID-19 pandemic restricting travel (and resulting effects on other services) have not been challenged at the WTO and would be likely found permissible even if challenged.

Many of the actions governments are taking to keep supplies of medical goods and food moving are only tangentially relevant to tourism in the broad sense, though of assistance to those needing to travel or moving goods. Removal of restrictions will likely occur over time and tourism’s return will also depend on confidence of consumers in the safety of travel, of dining out, of staying in hotels and of attending entertainment events. That confidence is likely going to flow primarily from the adequacy of testing, tracking and quarantining of those found to be infected, and ultimately with the development and widespread availability of a vaccine.

UNWTO recommendations for actions to address the pandemic and accelerate recovery

In a publication released on April 1, 2020, the UNWTO identifies 23 actions they seek governments to embrace broken into three topics:

1, “Managing the crisis and mitigating the impact” (1-7);

2. “Providing stimulus and accelerating recovery” (8-16)’

3. “Preparing for tomorrow” (17-23).

The 23 action recommendations are listed below. The full UNWTO document is embedded after that. As the list of action recommendations reveals, some of the action recommendations are included in actions already taken by major countries including China, the EU and its members, the United States and others. Actions reviewed in earlier posts by the IMF and others may permit some of these action recommendations to be implemented by some of the developing and least developed countries. Many of the recommendations will likely not be addressable in the near term but may encourage collective activity post pandemic.

“1. Incentivize job retention, sustain the self-employed and
protect the most vulnerable groups

“2. Support companies’ liquidity

“3. Review taxes, charges, levies and regulations impacting
transport and tourism

“4. Ensure consumer protection and confidence

“5. Promote skills development, especially digital skills

“6. Include tourism in national, regional and global economic
emergency packages

“7. Create crisis management mechanisms and strategies

“8. Provide financial stimulus for tourism investment and
operations

“9. Review taxes, charges and regulations impacting travel and
tourism

“10. Advance travel facilitation

“11. Promote new jobs and skills development, particularly
digital ones

“12. Mainstream environmental sustainability in stimulus and
recovery packages

“13. Understand the market and act quickly to restore
confidence and stimulate demand

“14. Boost marketing, events and meetings

“15. Invest in partnerships

“16. Mainstream tourism in national, regional and international
recovery programmes and in Development Assistance

“17. Diversify markets, products and services

“18. Invest in market intelligence systems and digital
transformation

“19. Reinforce tourism governance at all levels

“20. Prepare for crisis, build resilience and ensure tourism is
part of national emergency mechanism and systems

“21. Invest in human capital and talent development

“22. Place sustainable tourism firmly on the national agenda

“23. Transition to the circular economy and embrace the SDGs.” (Sustainable Development Goals).

COVID19_Recommendations_English_1

Conclusion

As the world is exploring ways to reopen individual economies as the worst of COVID-19 (at least phase 1) passes, governments will be under enormous pressure to reopen as quickly as is responsible to do. As data from the UNWTO demonstrate, travel and tourism is a labor intensive sector which has outgrown overall economic growth in the last decade and which can help facilitate recovery when economies are able to reopen.

There are huge challenges in the short- and medium-term for the sector including the depth of the decline, the fragility of many of the businesses financially and the challenges to restoration of consumer confidence. With the United States alone having recorded nearly 30 million people filing for unemployment over the last six weeks, the size of the economic challenge globally is obviously massive. The UNWTO recommended actions address an array of certain needs for many players. For those businesses that survive the pandemic, restoring consumer confidence and having governments withdraw restrictions safely will become the biggest challenges to forward movement. Government actions during the pandemic to provide safety nets for businesses and workers will influence how many businesses and jobs remain when markets do reopen.