EU Trade Chief Defends Medical Export Restrictions

By Alex Lawson
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Law360 (March 30, 2020, 3:48 PM EDT) -- European Union Trade Commissioner Phil Hogan on Monday defended his government's decision to restrict exports of masks, gloves and other protective equipment in response to the novel coronavirus outbreak, calling the measures a "monitoring tool."

Addressing a videoconference meeting of G-20 trade ministers, Hogan stressed that governments around the globe should refrain from unnecessary trade restrictions as they respond to the COVID-19 outbreak. Aligning with the G-20 leaders' statement last week, he said that any hurdles to trade should be "targeted, proportionate, transparent and temporary."

The European Commission earlier this month put in place new rules that require national governments to approve exports of certain safety equipment, a move that critics viewed as a de facto export ban. But Hogan stressed that the rules are an interim, emergency measure that is meant to ensure that European medical personnel maintain access to crucial safety tools as they tackle the outbreak.

"We took these steps to protect the health of our citizens at a time when Europe was at the epicenter of the pandemic. Our export authorization measure is a monitoring tool for the trade of medical products at a vital point in time — nothing more, nothing less," Hogan said. "It was the right thing to do and we are confident it will achieve the desired result in due course."

The European Commission does not currently have centralized data on how many of its export authorizations have been requested, granted and denied, as those requests are being fielded by its individual member-state governments.

"There's no legal obligation for member states to report to the commission on this," commission spokesman Daniel Rosario told Law360. "Some might inform us, but [it is] difficult to have the full picture."

Governments are trying to strike a balance between keeping the flow of trade open to ensure that the supply chains for medical equipment remain unimpeded while also ensuring that their own domestic supplies are sufficient to meet urgent demand within their own borders.

U.S. Trade Representative Robert Lighthizer nodded to that need for balance during his remarks, and said that the coronavirus crisis should not permanently upset the global trading system.

"We should do as little as possible to disrupt supply chains and be cognizant of the effects on our neighbors, as I said, particularly those least able to take care of themselves," he said.

A number of business associations and advocacy groups have condemned the rise in trade restrictions since the outbreak. Swiss-based watchdog Global Trade Alert circulated a report last week identifying 54 governments as imposing some level of export restrictions.

Simon Evenett, an economist at the University of St. Gallen who authored the report, cast doubt on Hogan's description of the EU's export rules, nodding to public statements from companies that say they have seen their European sourcing dry up.

"Common commercial sense says that uncertainty over export authorizations will [diminish] incentives to exports in the first place," Evenett told Law360. "If minimizing uncertainty was the goal, an automatic licensing system would have been introduced EU-wide, as opposed to fragmenting the single market with a hodgepodge of different national implementation procedures."

--Editing by Jack Karp.

Update: This story has been updated with a comment from U.S. Trade Representative Robert Lighthizer.

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