Coronavirus and Trade



International Trade Practice at Squire Patton Boggs

On January 30, 2020, the World Health Organization (WHO) declared that the novel coronavirus (2019 n-CoV) is a public health emergency of international concern (PHEIC). Countries have, therefore, been asked to report outbreaks of the virus and to keep the WHO informed of any measures being taken.

The WHO has the power to make non-binding recommendations as to how countries can successfully contain the virus, and this can include advice relating to trade. To date, however, the WHO has never advocated the introduction of trade barriers and has openly questioned the effectiveness of such measures. PHEIC measures come with the express caveat that they should not be used as a reason to, via trade restrictions or other means, economically stigmatize a nation.

PHEIC declarations do not automatically prompt trade restrictions, and while the WHO can make recommendations for adoption by individual members, they have no direct power, as this remains a matter for national sovereign countries to decide upon. In addition, trade restrictions on imports other than imports of products, which are themselves seen as being the source of the virus, are rare (e.g., 40 countries adopted import bans on pork during the H1N1 outbreak of 2009).

Under the World Trade Organization (WTO) law, governments may, in the pursuit of national health and other policy objectives, take measures to restrict trade necessary to protect human, animal or plant life or health, as long as they do not constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade. This exception applies to both trade in goods and services.

An example of discriminatory treatment occurred in 1998, when the European Communities (EC) blocked imports of fish from certain African countries. Based on the evidence of a WHO official before the relevant committee, the EC agreed to resume trade. (See here for a link to the Committee report).

The current outbreak is a fast-moving picture, and as China struggles to contain it, the implications of what eventual restrictions may be imposed on China and other East Asian economies remain unclear. What is clear, however, is that trade restrictions during PHEICs are usually extremely limited, and even then, can be held to be unjustified by the WTO.

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