Trade Professionals Say Nationalizing Supply Chains Isn't Safer

As countries seek to acquire needed supplies of ventilators, masks and other protective gear, the deputy director for trade and agriculture at the Organization for Economic Cooperation and Development said that nationalizing production of these goods is not the answer for the next pandemic. Julia Nielson, who was speaking on a Washington International Trade Association webinar April 2, said, “I don’t think nationalization of supply has ever meant security of supply.” She said that countries may need to consider the inventories they hold, and redundancies in where they get goods, but that given the way this pandemic is spreading in waves, relying on one country, even your own, could be risky.

Wendy Cutler, the Asia Society Policy Institute's Washington, D.C. director, said it's discouraging that now 68 countries are restricting exports in response to the coronavirus COVID-19 pandemic.

Colin Bird, director of trade negotiations in Canada's diplomatic corps, said he wouldn't interpret the export restrictions on medical goods as a sign of how trade will be conducted in the future. “Frankly, I think it has given the world a useful lesson on how global supply chains work,” he said. “If you want Switzerland to be the arsenal of ventilators, you can’t deprive them of tubing.”

He also said that the General Motors push to produce ventilators in Kokomo, Indiana, is “going to have a Canadian supply chain that’s going to contribute a lot to that.”

Nielson said she thinks the ways Customs officials have had to respond to this crisis will change operations after the crisis. She said countries will “move ahead much faster on the automation and digitalization of trade facilitation,” and there will be less reliance on physical inspections.

Off the topic of the coronavirus response crisis, WITA Executive Director Ken Levinson asked Bird when he expects the U.S.-Mexico-Canada Agreement to enter into force, since a June 1 date is out of the question. None of the governments have made an announcement about a date of entry into force, but the treaty said if they were going to have a June 1 start, all three countries would have had to exchange letters by March 31 that they were ready. The Office of the U.S. Trade Representative did not respond to questions on April 1.

Bird said he couldn't speak to whether June 1 is no longer possible. But he said that even as they telework, “everyone is still sort of all-hands-on-deck to try to move it through for this summer.”