COVID-19 and the ASEAN Summit: Acting on Medical Supplies and Food Security

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COVID-19 AND THE ASEAN SUMMIT:  ACTING ON MEDICAL SUPPLIES AND FOOD SECURITY
A crisis in international leadership

COVID-19 has presented the world with both a major health and economic crisis. These crises have so far revealed a lack of leadership at the international level, thereby preventing a concerted response in the way that we have often seen in previous crises. 

In relation to the health crisis, the current response does not compare well to the responses led by the US to the 2014-15 Ebola crisis or the 2003 HIV-AIDS crisis in Africa. The economic crisis is still in an early phase, but there are no signs yet the G20 will play a similar role in responding to the extent it did in the 2008-09 Global Financial Crisis.

Covid-19, and the responses to it, would also seem to have become a catalyst for escalating pre-existing tensions between the world’s two largest economies, the US and China. This is further complicating international cooperation. A key question is whether other actors might step into the vacuum to provide sorely missing leadership.

Attention should not be directed only at the major powers. Smaller and medium sized countries have also been making an important contribution to strengthening the institutional foundations underpinning our more integrated world.

ASEAN and Covid-19

A key role in this type of institution-building has been played by the Association of Southeast Asian Nations (ASEAN), which has forged a path of closer economic integration leading to the establishment of the ASEAN Community in 2015. ASEAN has also led the development of an extensive institutional framework across the Asia-Pacific and into the Indian Ocean region: the ASEAN Plus Three (China, Japan, South Korea) forum; the East Asia Summit (covering the ASEAN Plus Three and Australia, India, New Zealand, Russia, and the US); the ASEAN+1 free trade agreements (FTAs) and negotiations for a Regional Comprehensive Economic Partnership (RCEP, comprising ASEAN and its six FTA partners); and other initiatives.

This extensive framework has the potential to facilitate a broader regional response to the Covid-19 crises.

An ASEAN Collective Response to Covid-19 was issued on 15 February and there have also been meetings of ASEAN Health, Economic and Agricultural Ministers and the ASEAN Coordinating Council. A Special ASEAN Summit was held by videoconference on 14 April. In addition, there was a Special ASEAN Plus Three Summit on 14 April, as well as special Ministerial meetings with China, the EU, Japan and the US. While these meetings have all produced important statements on cooperation and information sharing, they have not included clear, tangible actions to address the immediate health and economic challenges.

A concrete Covid-19 trade initiative to address medical supplies and food security

Another ASEAN Summit, planned for the second half of June, is expected to review ASEAN’s Covid-19 response. The Summit presents ASEAN with an opportunity to give practical expression to the commitment in its 14 April Declaration “to keeping ASEAN’s markets open for trade and investment, and enhance cooperation among ASEAN Member States and also with ASEAN’s external partners with a view to ensuring food security and strengthening the resiliency and sustainability of regional supply chains, especially for food, commodities, medicines, medical and essential supplies.”

It is important that the Summit goes beyond broad statements of cooperation and commits to concrete actions. The immediate trade focus should be on strengthening cooperation to ensure access to medical supplies and the supply of food, given the food vulnerability of many populations in ASEAN member states.  

Such an initiative could take the form of launching a process, in partnership with business, to identify and address bottlenecks in the availability of both medical supplies and food. Action could involve the following elements:

  • Eliminate or temporarily waive tariffs and export restrictions.
  • For non-tariff measures, speeding up customs clearance, streamlining any necessary regulatory approval processes, ensuring trade finance, addressing production blockages, maintaining logistical networks, and easing other non-tariff barriers.
  • Increased cooperation to address concerns about counterfeit or faulty goods and instances of exorbitant pricing for medical supplies.

It is understandable that individual governments may feel under pressure to take unilateral actions such as export bans or other restrictions to demonstrate that they are acting to protect their populations. But the evidence from past experiences of food export bans, such as in 2007-08, is that such measures all too often worsen the situation for everyone by increasing uncertainty for business, disrupting supply chains, causing world prices to increase further and potentially encouraging other governments to take similar action.

While it would be ideal for governments to remove all restrictions, this may be politically difficult to achieve during the current crisis. However, it should be possible for ASEAN member states to work cooperatively to ease restrictions to keep open the medical and food supply lines identified under the initiative.

The World Customs Organization (WCO) and the World Health Organization (WHO) have jointly prepared a HS Classification Reference for Covid-19 Medical Supplies (2nd edition, updated 9 April 2020), and this list could be used as the basis for identifying medical supplies to be covered by the initiative. Given the importance of ensuring adequate access to medical supplies, MFN tariffs on all products on the list should be eliminated, at least until the end of 2022.

On food, coverage should be extensive enough to assist all ASEAN member states in their efforts to maintain access to food for their populations. While governments are taking a range of actions to provide support to workers and businesses affected by restrictions on economic activity, these actions often miss, or find it challenging to reach, workers in the informal sector and other vulnerable groups.

Strong buy-in from leaders and business, and clear lines of communication, would be required for such an initiative to succeed. Support by leaders would be essential to ensure nationally coordinated responses between ministries and between government and business. Implementation should be transparent to reduce uncertainty for business and to engage the broader community in efforts to fight both the health and economic crises.

The ASEAN Secretariat should be given a mandate to take a leading role in assisting the member states. Business associations, including regional and international associations spanning businesses in the different member states, could play a central role in facilitating outreach to enterprises involved in the supply chain.

A network of partners across the region

ASEAN is at the core of a strong network of institutional partnerships with other countries across the region. As supply chains are complex and extensive, ASEAN should use this network to invite as many of its partners as possible to join the initiative.

Australia should play an active role in supporting such an initiative, including by bringing expertise and resources to work with ASEAN and other partners in the region to address these unprecedented crises. Over several decades Australia has developed extensive, and beneficial, links with the region.

How Australia responds to the current crises is a real test of its commitment to genuine partnership within the region. Active engagement in the initiative would also demonstrate recognition that the current crises can only be adequately addressed through international cooperation that harnesses the different national strengths of countries in a common endeavour.
By, Milton Churche and Michael Mugliston, visiting fellows, Institute for International Trade, The University of Adelaide

Tagged in Featured, World Trade System, Trade Facilitation, Australia, Southeast Asia, Opinions

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