Legality of export restrictions imposed during COVID-19 in international economic law

• DOI: https://doi.org/10.1108/JITLP-07-2022-0024
• Published date: 03 May 2023
• Date: 03 May 2023
• Pages: 33-50
• Subject Matter: Strategy,International business,International business law,Economics,International economics,International trade
• Author: Ahan Gadkari

Legality of export restrictions

imposed during COVID-19 in

international economic law

Ahan Gadkari

Jindal Global Law School, OP Jindal Global University, Sonipat, India

Abstract

Purpose –This paper aims to examineoptions under the General Agreement on Tariffs and Trade (GATT)

for exempting or justifying export restrictions or prohibitions that are in principle prohibitedunder Article

XI:1 GATT. The paper beginsby examining the exception under Article XI:2 (a) GATT, beforegoing on to

the arguments under GATT Article XX (b) and (j). In addition,the analysis considers the national security

exceptionin Article XXI (b) (iii) GATT, given that WTO membershave increasingly invoked this provisionin

recent years, as well as duringthe pandemic, when Namibia implemented COVID-19-relatedtrade restrictions

under the Agreementon Technical Barriers to Trade based on national securityconcerns.

Design/methodology/approach –The impacts of the COVID-19 pandemic on trade have been

far-reaching. Countries have attempted to place export restrictions on personal protective equipment and

COVID-19 vaccines.Even though export restrictions are generally unlawful under the GATT, countries have

decided it is necessary at this time. Members have relied heavily on the “national security”and “critical

shortage”exceptionsoutlined in the GATT.

Findings –This paper concludesthat, depending on the circumstances of a particular case,a pandemic may

constitute an emergencyin international relations, as defined in ArticleXXI (b) (iii) GATT, and that, in such a

situation,a WTO member may legitimately take actionto protect its vital security interests.

Originality/value –The paper provides an original conclusionbased on WTO case law on an issue of

contemporaryrelevance.

Keywords GATS, GATT, COVID-19, National security exception

Paper type Research paper

1. Introduction

SARS-CoV-2 (COVID-19) was classified as a “Public Health Emergency of International

Concern”(WHO, 2005) by the World Health Organization (WHO) on 30 January 2020 by

international health standards. It designated COVID-19 a pandemic in March 2020 (WHO,

2020), as the number of illnesses and fatalities surgedsignificantly around the globe [1]. The

WHO urged governments to take “urgent and aggressive measures”

1

in response to what

the United Nations (UN) Secretary-General described as the “most challenging crisis we

have faced since the SecondWorld War”[2]. Numerous answers to this “human crisis”

2

have

revealed themselves in the adoption of trade-restrictive policies in the field of commerce.

Among the initial responses in this regard were quantitative export restrictions and

prohibitions on personal protective equipment (PPE) adopted by all major exporters [3]of

medical products, including Germany[4], the USA [5] and Switzerland (Bundesrat, 2020), to

avoid PPE shortages within their borders [6]. Now that substantial progress has been

achieved in terms of vaccination,the second set of responses has been exporting restrictions

(also referred to as “export limits”) on COVID-19 vaccines, as represented by the recently

implemented EU export permission mechanism to ensure the timely delivery of pre-ordered

vaccine doses [7].

Legality of

export

restrictions

33

Received12 July 2022

Revised22 January 2023

Accepted23 March 2023

Journalof International Trade

Lawand Policy

Vol.22 No. 1, 2023

pp. 33-50

© Emerald Publishing Limited

1477-0024

DOI 10.1108/JITLP-07-2022-0024

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1477-0024.htm

The article examines options under the General Agreement on Tariffs and Trade

(GATT) for exempting or justifying export restrictions or prohibitions that are in principle

prohibited under Article XI:1 GATT [8]. The article begins by examining the exception

under GATT Article XI:2 (a), before goingon to the arguments under Article XX (b) and (j)

GATT. In addition, the analysis considersthe national security exception in Article XXI (b)

(iii) GATT, given that WTO members have increasingly invoked this provision in recent

years [9], as well as during the pandemic, when Namibia implemented COVID-19-related

trade restrictions under the Agreement on Technical Barriers to Trade based on national

security concerns [10]. This article concludes that, depending on the circumstances of a

particular case, a pandemic may constitute an emergency in international relations, as

defined in Article XXI (b) (iii) GATT, and that, in such a situation, a WTO member may

legitimately takeaction to protect its vital security interests.

Nonetheless, as this article explains, export limits and prohibitions on PPE or

vaccinations are more consistent with other GATT rules. Since the outbreak of the

COVID-19 pandemic, authorities have almost exclusively justified their use of trade-

restrictive measures by citing supply shortages and the need to safeguard human life and

health. These policy objectives are mirrored in Article XI:2 (a) and Article XX (j) of the

GATT, which both address product shortages, and in Article XX (b) of the GATT, which

expressly supportsactions “necessary to protect human [...]life or health”.

2. Export restrictions or bans on personal protection equipment

Export bans or limitations on PPE such as facemasks [11], shields, gloves and medical

equipment like ventilatorswere implemented early in the COVID-19 pandemic as the earliest

trade-related remedies (WTO,2020a, 2020b). However, Article XI:1 GATT bans the

implementation of “prohibitions or limitations other than tariffs, taxes, or other charges,

whether or not implemented via quotas, import or export permits, or other measures”[12].

Quantitative exportlimitations and prohibitions on PPE come clearlyunder this prohibition,

which applies to both imports and exports, as declared by the Appellate Body in

Argentina –Import Measures [13]. In Argentina –Import Measures, the Appellate Body

observed that Article XI:1 GATTdoes not cover any restriction, rather it specifically applies

to limitations on imports and exports. COVID-19-related exportrestrictions were intended to

have “a limiting effect”[14] on the trade of relevant items,if not to constitute “legal bans”[15],

and were implemented to assure the domestic supply of a particular commodity [16]. They

may, however, have a “multiplier effect”(Giordani et al.,2012a), given that quantitative

export restrictions may have significant adverse distributional impacts [17]. This economic

disadvantage helps to explain why quantitative restrictionsare prohibited by default under

Article XI:1 GATT. At the same time, the political incentives support granting WTO

members the flexibility to exempt quantitative restrictions under Article XI:2 GATT or to

invoke generalexceptions under ArticleXX GATT.

The food crisis of 2007/2008 provides a cautionary tale about the implications of export

limits and bans, which might manifest similarly in the case of PPE limitations and

prohibitions [18]. Preceded by increased demand for cereals, rising oil costs and depleted

stockpiles, a grain shortfall developed into a full-fledged food crisis when poor weather

conditions impacted the harvests of many WTO members that produce grain [19]. Massive

hoarding exacerbated the already-existing scarcity in this circumstance. Rather than

alleviate the situation, protectinglocal markets by quantitative export limits and grain bans

exacerbated it [20]. As one government aggravated global market shortages via export

restrictions, othersfelt compelled to enact similar (and even more vital) restrictions[21]. This

resulted in decreased amounts of grain available on the international market rising

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