Webinar Summary – Two Years of COVID-19: Reforming Multilateralism to Support Pandemic Policy Responses

By Özlem Ömer

On Tuesday, March 1, the Boston University Global Development Policy (GDP) Center hosted a webinar to discuss its new report analyzing the policy responses to the COVID-19 pandemic and lessons for the global trade and investment regime, focusing on six countries— USA, Germany, France, China, India and South Africa. The discussion centered around understanding the role of trade and investment rules in constraining policymaking that countries consider “important and necessary” during and after a major crisis like the COVID-19 pandemic.

Moderated by Veronika J. Wirtz, Professor of the Boston University School of Public Health, the discussion included report co-authors Rachel Thrasher and Sandra Polaski, as well as the expert commenters from the field, Ronald Labonté, Professor at Canada Research Chair in Contemporary Globalization and Health Equity, University of Ottawa and Carlos Correa, Executive Director of the South Centre.

To begin, Rachel Thrasher provided a detailed overview of the report, explaining the data and methods, the government interventions implemented during the pandemic and the typology of global trade and investment rules mainly imposed by the World Trade Organization (WTO). She then discussed the research results, highlighting the relationship between the widespread government responses and the relevant rule-based constraints in policymaking.

According to Thrasher, the US was the most interventionist country, while South Africa and China enacted relatively few new policies in response to the pandemic. Moreover, a third of all interventions were aimed at health sectors while 90 percent of interventions were aimed at boosting local non-health sectors. Additionally, France and Germany were the only countries to make compulsory licenses easier to use during the pandemic.

Overall, high-income countries relied primarily on subsidy-based measures while the dominant policy choice for China, India and South Africa was trade restrictions, which, she argued, was due to restricted fiscal and monetary space. Moreover, many of the policies implemented by all countries in the study were aimed at mitigating supply chain uncertainties in health and other sectors.

Finally, although Thrasher focused primarily on rule-based constraints from WTO trade rules, she also pointed out the increasing concerns regarding the international investment requirements—including the free trade agreements (FTAs) that “give extensive rights to investors to challenge government policies even in public health measures.”

Table 1: Quantitative Overview of Findings

Next, Sandra Polaski discussed three main areas of tensions and trade-offs which complicate interactions between government interventions and trade and investment rules during the pandemic. Specifically, she highlighted the tensions between national and global level health needs, public and private interests and the efficiency in producing and inventing COVID-19 products and their equitable availability.

According to Polaski, these tensions and trade-offs result in challenging dilemmas between the opposing parties, i.e., national vs. global level needs, citizens vs. private companies and stakeholders. These, in turn, affect the course of action, the efficacy of crisis management and more importantly, the future of humanity across global health, inequality and economic stability.

After emphasizing the shortcomings of key multilateral institutions like the WTO and the International Monetary Fund (IMF) in responding to the crisis, she concluded by summarizing policy recommendations discussed in the report under three distinct categories: short-term measures to end the current pandemic, long-term measures to improve countries’ health resilience and long-term (non-health) policy changes to strengthen economic stability, equity and adaptation.

Proposals for the short-term health response included calling all WTO members to waive key provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), asking high-income countries to pressure their innovators to share technology and know-how to ramp up essential vaccine production and low- and middle-income countries to support, as much as possible, the domestic development of pharmaceutical products and technologies.

To meet the demands of the next pandemic, Polaski called for a longer-term view which would expand policy space and regional cooperation for more robust health sectors in diverse geographic areas. Finally, Polaski proposed a general recognition of the primacy of public welfare goals –in terms of health as well as environmental and development goals, explicitly mentioned in the text of newly negotiated and reformed trade agreements, with a specific call to eliminate investor-state dispute settlement to restore the balance between public and private interests in international economic law.

In response to the presentations, Ronald Labonté explained why it may be difficult to see some of the report’s recommendations come to fruition, as dealing with the WTO, which is deeply rooted in modern neoliberal doctrines, would be a significant obstacle. He emphasized that the failure of WTO members to support a TRIPS waiver and technology and knowledge sharing “will remain critical not just for the current pandemic but for the future ones as well,” especially when countries move to address the crisis of climate change.

Labonté also highlighted the strong empirical arguments for a regional approach in vaccine production, due to capacity constraints in some countries. He then pointed out the corresponding need for “robust equity agreements” at the regional level which might require amending other trade agreement rules that could impede such cooperation. He concluded by calling attention to politicization of rising private-corporate-financialized investors, as well as the increasing number of autocratic leaders and their control over wealth and income during the pandemic, as such trends can cause real harm to inclusive and participatory democracy.

Finally, Carlos Correa gave remarks by highlighting the extensive use of state interventions in developed countries. According to Correa, this was particularly interesting, as these countries generally support “free market economy” doctrines as opposed to government interventions. For example, Correa cited the use of US Defense Production Act, which helped finance vaccine developers in the US.

Correa’s second point related to investment rules enforced by high-income countries, such as the adoption of additional screening rules for FDI in France and Germany. Following this, he raised the question of whether these measures were justified by the COVID-19 crisis or were they already part of recent nationalistic trends observed in developed countries prior to the pandemic, given over dependence on products from India and China like microchips, active ingredients in pharmaceuticals, and others.

In his final comments, Correa focused on the report’s call for reform in existing policies by pointing to his sources of pessimism. He stated that “the WTO has a different agenda, which supports the liberalization, and recognizes the role of intellectual property in ensuring the development and equitable distribution of wealth and technologies.” He concluded by agreeing with the report’s emphasis on the necessity of “acknowledging the role and ability of governments to act in the public interest by overruling foreign private commercial interests.”

As the two-year anniversary of the World Health Organization officially declaring COVID-19 a global pandemic approaches, the report underscores the importance that international rules work to support, rather than constrain, public health.

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