More than a year into the pandemic, APEC member economies are urged to fast-track trade policy measures and step up cooperation to tackle the ongoing crisis, according to a new policy brief by the APEC Policy Support Unit.
Trade policy could facilitate the distribution of COVID-19 vaccines, which is key to the fight against the pandemic, the policy brief highlights. It also states that APEC member economies should seize the opportunity to pursue initiatives to reduce or eliminate tariffs on vaccines and related goods and refrain from implementing export restrictions and prohibitions affecting those goods
While the average tariff on vaccines is very low within APEC (only 0.8 percent), tariffs are much higher for several goods that are very important in the vaccine supply chain.
Essential products such as alcohol solutions, freezing equipment, packaging and storage materials, as well as vials and rubber stoppers face higher average tariff rates above 5 percent. In addition, some import tariffs are very onerous, reaching as much as 30 percent and above for specific products in certain APEC economies.
The policy brief recommends that member economies facilitate trade in vaccines and related supplies and equipment by securing open supply lines and preventing unexpected events from affecting the delivery of any goods in the vaccine supply chain.
“APEC economies are collectively responsible for the majority of the world’s COVID-19 vaccine production,” explains Carlos Kuriyama, Senior Analyst of the APEC Policy Support Unit and the author of the policy brief.
“But since vaccine production relies on a specialized network with multiple inputs originating from across the APEC region and the rest of the world, this further underscores the importance of ensuring that global supply chains are functional and resilient,” Kuriyama adds.
The report shows that since the emergence of the pandemic, several APEC economies have implemented measures to facilitate trade of medical products, including reducing or eliminating import tariffs on a temporary basis as well as exempting those imported products from value-added taxes and income taxes.
While those measures could help facilitate access to vaccines on a temporary basis, the policy brief proposes a better outcome could be obtained by making those measures long-lasting.
In parallel, the policy brief recommends strengthening cooperation at all levels, for example, through the implementation of policies concerning intellectual property to promote technology transfer and facilitate vaccine production, as well as measures to mutually recognize good manufacturing practices, to ensure that the quality assurance for vaccines produced in one economy is valid for other economies as well.
“APEC economies need to take not just individual, but also collective actions during this emergency to fight this pandemic,” says Dr Rebecca Sta Maria, Executive Director of the APEC Secretariat. “The current situation is unprecedented and there is a sense of urgency to look beyond business-as-usual considerations to propose effective measures to stop this pandemic.”
APEC Trade Ministers will convene virtually in early June under New Zealand’s leadership to set the region’s response to COVID-19, including policies and measures regarding vaccine supply chains.
“Free and open trade will help quickly ramp up COVID-19 vaccine production and at the same time tackle supply chain challenges,” says Kuriyama. “If vaccines or important related goods are unaffordable or unavailable due to tariffs, export restrictions or delays in transit, additional vaccine production may be for naught.”
“The urgency of the pandemic requires bold and concerted action across the vaccine supply chain to facilitate vaccinations, and the end to the pandemic,” he continued.
To read the full policy brief, Promoting Trade in Vaccines and Related Supplies and Equipment, from the APEC Policy Support Unit, visit this link.