By Isabelle Granger
“How can policy and trade help disasters? What can the World Trade Organization do to support disasters?”
These were the first questions posed by Roberto Azevêdo, Director General of the World Trade Organization, in his opening remarks at the WTO Natural Disaster and Trade Symposium that took place on 26 April 2018, as WTO is launching a research project to better understand the nexus between disaster relief and commercial trade, in collaboration with Australia, IFRC, and ISDR, among other partners.
“The Trade Facilitation Agreement can provide an enabling environment for members to respond to future crisis” commented DG Azevêdo.
WTO member states have an important — and as yet untapped — opportunity to use existing global trade frameworks to support timely response and recovery operations after disasters. Indeed, trade facilitation, and the creative use of the WTO Trade Facilitation Agreement of 2014, could transform disaster relief operations.
“Strengthening regulation, policy and infrastructure before disasters can increase the resilience of countries, stated Ambassador Frances Lisson, Permanent Representative of Australia to the World Trade Organization. “WTO member states are encouraged to support this initiative”.
“Trade is a main driver for achieving the Sustainable Development Goals and eradicating poverty” explained Ms. Kirsi Madi, Deputy Special Representative of the United Nations Office for Disaster Risk Reduction. “The mapping [for this project] will provide the evidence to explain the impact of trade on disasters. Disasters have an impact on social, health and education expenditure, and low and medium income countries are at risk to lose most if not all of their development. Disasters undermine competitivity… when businesses leave, they may never return” she added.
Customs and entry issues are among the top challenges affecting international disaster responders. In practice, this means difficulties or delays in obtaining customs clearance or exemptions from duties, difficulties in accessing information on customs, and delays or restrictions in the entry of relief personnel. The challenges also impact regular trade processes in emergency situations, which can have significant impacts on local markets and the economy of the affected state.
There are well-documented examples, like the 500 containers of emergency relief items stuck in the Jakarta and Medan ports in 2005, a full year after the Tsunami. Perishable items rotted, medicines expired, and emergency relief items like clothes, tents, blankets and surgical equipment, which were essential at the start of the relief effort, were redundant by the time they were cleared.
Similarly, in September 2014 (with over 3,000 people already dead from Ebola and 6,000 confirmed cases), relief actors faced lengthy import and clearance procedures at Lungi airport in Sierra Leone. Some shipping containers of medical supplies waited up to two months in the port of Freetown.
Another example can be found in the response to the ongoing Rohingya crisis in Myanmar and Bangladesh, where heavy customs procedures caused delays in the delivery of relief materials for up to 30 days – and some vehicles blocked for up to 3 months.
“In these examples, the lack of capacity to access relief items is related to trade processes” stated Elhadj As Sy, Secretary General of the IFRC at the WTO Natural and Trade Symposium.
At the same time, many disaster-affected countries have found themselves deluged with well-intentioned but poorly informed “assistance” that they did not really need and which hindered the response. For example, in the Philippines after Typhoon Haiyan in 2013, containers and aircrafts filled with clothing and medications ended up staying for weeks at the airport. Medicines, were particularly difficult to handle, especially those requiring the respect of cold chain protocols during their transportation, which were extremely difficult to maintain considering the logistical challenges at the time.
In regard to the Trade Facilitation Agreement, while it does not specifically refer to disasters, the Agreement requires member states to review and upgrade their procedures for facilitating the entry of goods in general. This represents an opportunity for countries – in advance of the next disaster – to ensure that states are ready to facilitate and manage customs issues that might impact regular trade processes, based on global experience.
Disasters and health emergencies can have huge impacts on regular trade processes, as was witnessed during the West Africa Ebola outbreak. Many states shut down trade ties with the affected countries, against the strong recommendations of the WHO, African Union Executive Council and even the UN Security Council. This caused a major blow to their already struggling economies.
“Ebola killed 11,000 people in Sierra Leone. The first measures that were taken when the disease was declared… flights were cancelled, markets were closed, borders were closed, people were not allowed to trade. It had an impact on the incomes and affected people… on the nutritional status of pregnant women, babies, access to medical services, and underlying problems were exacerbated, and it increased the mortality in these countries. Access to markets were delayed and income generation was negatively affected” highlighted Elhadj As Sy, Secretary General of the IFRC, while speaking at the event.
The World Bank put the overall damage of the Ebola crisis at $2.8 billion ($600 million for Guinea, $300 million for Liberia, and $1.9 billion for Sierra Leone), and made it clear that the negative economic impact has far outlasted the appalling epidemiological and social impact of losing 11,000 people. They pointed to the fact that the shock was worsened by the large decline in the world price of iron ore and other commodities, and – specifically for Sierra Leone – by corporate governance issues in mining.
Likewise, during the 2009 influenza epidemic, trading partners around the world imposed trade and travel restrictions to Mexico, again despite advice to the contrary from the WHO.
The extremely dangerous message this sends is that being open about emerging diseases (as required by the International Health Regulations) will subject states to a disproportionate and economically damaging response, without recourse. As states must be thinking about the safety of their citizens, no one can hide behind borders hermetically from contagious disease. This issue is a collective one, and it is one where trade policy may play a role.
Likewise, export restrictions or export taxes on foodstuffs have played an inhibiting role in major food insecurity crises in recent years. While impacting mainly African countries, trade restrictions were employed by states in other parts of the world. While there were a mix of motives for the restrictions, in some cases, they began out of concern for domestic food security, surely a valid concern. Again, however, all are potentially impacted by international food prices and some way of balancing domestic and global impacts, when a humanitarian crisis is already playing out or on the horizon, should be part of our system.
These are undoubtedly complex problems that require careful thinking to resolve. This is why the IFRC is collaborating with the WTO in the research project on trade and disasters launched at the WTO Natural Disaster and Trade Symposium. The research seeks to shed light on the connections between trade and natural disasters, not just in terms of challenges but also how the relevant legal frameworks and policies can have a positive impact on the issues at hand. This will provide a basis for these two sectors to come together to address common issues of concern, and ensure that disaster affected communities can recover and get back on their feet as soon as possible.