WTO Unveils New Report on Medical Products in Trade Agreements

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Hamid Ayodeji
The World Trade Organisation (WTO) has released a new report on the treatment of medical products in regional trade agreements (RTAs) amid current supply shortages caused by the COVID-19 pandemic.

The report examined the extent medical products are traded among preferential partners and the difference in liberalisation rates within and outside these trade agreements.
The world’s top ten exporters of medical products ship 27 per cent to 77 per cent of these goods to their RTA partners according to the report.

It also revealed that WTO members have eliminated tariffs on over 84 per cent of medical products for 2020 under their various RTAs. According to the WTO, medical products face an average tariff of 1.6 per cent within RTAs as compared to the 3.8 per cent average tariff for medical products traded outside RTAs, suggesting room for further trade liberalization at the WTO.

The report also examined other provisions in RTAs that may restrict or facilitate trade and also highlights the need for forging mutual recognition agreements that recognise standard conformity assessments by authorities in other countries.

“The share of exports by the world’s top 10 exporters of medical products to their regional trade agreement partners ranges from between 27 per cent for China to almost 77 per cent for the Netherlands.

“The majority of the top 10 traders in such products are EU member states. In their RTAs, WTO members had liberalised over 84 per cent of these products by 2020.
“The share is higher for developed members (99.5 per cent) than for developing (84.3 per cent) and least developed members (68.4 per cent),” it added.

It showed that developed members surveyed had eliminated tariffs (both most-favoured-nation (MFN) tariffs — that is, without discrimination between trading partners — and preferential tariffs) in medicines and in their RTAs for medical equipment and personal protective (PP) products (compared to an average MFN rate of 0.2 per cent and 2.4 per cent respectively).

Their average preferential rate for medical supplies is 0.5 per cent compared to an average MFN rate of 1.8 per cent.

In developing and least-developed members, average MFN and preferential rates are higher, especially for medical supplies, medicines and PP products.