CUSTOMS&TRADE

MARK K. NEVILLE, JR.

TRADE IN THE TIME OF

COVID-19
Make America Healthy Again!
his discussion was drafted in early brother of Prometheus, and his wife Pan- It has been a swift and ferocious force that
T April under home shelter-in-place1
rules and by the time it appears in print
dora. A note attached to the vessel cautioned
that it was not to be opened. Alas, Pandora
has leveled everything in its path in an in-
stant. Investor panic has triggered financial
we can assume that the situation will have could not resist and, once the lid was lifted, market meltdowns around the globe. Sick-
changed dramatically. Over the course of out flew every pestilence and affliction ness of staffing and sheltering-in-place
a week or so, the facts on the ground which plagued mankind. Surely, this is the orders have led to factory and transporta-
changed by the day and I had to make nu- origin of the COVID-19 Pandemic. tion shutdowns,3 unprecedented levels of
merous revisions as the narrative needed When Pandora closed the lid on the ves- unemployment (6.6 million Americans
a daily refreshing. It serves as a reminder sel only one thing remained inside – Hope. filed for unemployment in the last week
of events as they had unfolded as well as a And it is to Hope we turn now, as we strug- of March alone) and laid waste to supply
prediction informed by those events. gle to contain the Pandemic, end the death, chains4 and entire industry sectors (think
suffering and dislocation, and restore eco- travel, leisure and retail for starters). Some
nomic force to international trade. business enterprises that took decades to
The Back Story build have been shut down and many will
As the ancient poet Hesiod tells it, the great COVID-19 Impact on Lives and Livelihoods. never return. Mom and pop shops on
Zeus laid down his lightning bolts and, in Aside from the vast toll of deaths caused Main Street—or the High Street—and
continuing payback for Prometheus’s theft by the COVID 192 Pandemic, we are wit- Fortune 500 enterprises alike face ruin.
of fire, presented a vessel to Epimetheus, nessing enormous economic upheavals. And to revert to our headline, inter-
national trade has been grievously
MARK K. NEVILLE, JR., LL.M. (International Legal Studies), NYU, is a long-time member of the Board of
wounded. Everything is relative and, in
Advisors. He is Principal of International Trade Counsellors and may be reached at mkneville@itctradelaw.com. that light, the 2008-2009 “Great Recession”
He has served as an adjunct professor at The University of California, Berkeley’s Haas School of Business and has just lost the “Great” from its name
NYU’s Stern School. He is the Journal’s Customs & Trade correspondent. Thanks to my trusted associate Jay
Neville for his research efforts in chasing down, from his home shelter, much of the information shared here and and appears to be a bit of an inconven-
for re-introducing me to Hesiod. ience. What may have started as an isolated
30 l l
JOURNAL OF INTERNATIONAL TAXATION MAY 2020 CUSTOMS & TRADE
 A nurse wipes away tears as she stands outside NYU Langone Medical Center on
1st Avenue in Manhattan as New York Police Department (NYPD) Mounted Police and
other units came to cheer and thank healthcare workers at 7pm during the outbreak
of the coronavirus disease (COVID-19) in New York City, New York, U.S., April 16, 2020.
REUTERS/MIKE SEGAR

outbreak in the Chinese city of Wuhan they were quickly removed where it con- temporary suspension of the anti-dump-
in November or December (or earlier?) cerned admitting vital materials needed ing duty on imports of designated medical
has become a catastrophe that has spread to address the Pandemic. material. Brazil7 temporarily eliminated
to every corner of the globe. Few events The obvious motivation: Every nation import tariffs on certain Personal Protec-
have been more disruptive to the move- finds itself in need of protective gear—face tive Equipment (e.g., masks, gloves, gog-
ment of goods and people.5 And yet we masks, and gloves, shields, hazard suits— gles, shoe covers). Canada8 ordered the
seem to be soldiering on. and such medical devices as respirators temporary elimination of import tariffs
and ventilators, as well as prescription on certain medical products. China9 tem-
Overview of Trade. If we examine the meas- drugs. In short, all manner of medical ma- porarily eliminated the 10% ad valorem
ures taken by trade officials in responding terial. On the other hand, some countries duty on designated medical equipment.
to the Pandemic, we find they generally that produce medical material and phar- The European Union10 implemented
fall under one of two headings: policies maceuticals have imposed “short supply” “Green Lanes” under the Guidelines for
of allowing more medical goods into the restrictive measures to prevent such life- border management measures to protect
country or preventing medical goods from saving goods from leaving their territory. public health and ensure the availability
leaving the country. Where trade barriers of essential goods and services. In order
in the form of higher duties, quotas or re- Brief Snapshot of Eased Import Barriers. to preserve the free flow of EU-wide supply
medial antidumping duties stood before, On 21 March 2020, Argentina6 issued a chains and ensure the flow of goods within
the Single Market, Member States are re-
quested to designate immediately ‘green
1 5
I expect this Orwellian phrase will make the next edi- For a stark look at this new reality see the special sec- lane’ border crossings–for land (road and
tion of the Oxford English Dictionary. tion, The Great Empty, NYTimes, Mar. 29, 2020, with
2 its photographs of empty public spaces such as the rail), sea and air transport. These will be
Coronavirus Disease 2019 (COVID-19), a communica-
ble disease caused by a new (novel) coronavirus 6
Place de la Concorde in Paris. wherever internal border controls exist
named SARS–CoV–2, is a respiratory disease that can Resolución No. 114/2020 Ministerio de Desarrollo Pro- or have been introduced within the trans-
ductivo (20 March 2020).
cause fever, cough, and difficulty breathing, with 7
Resolução No. 17/2020, Ministério da Economia/
European transport network (TENT) and
reported illnesses ranging from mildly symptomatic
to severe illness and death.
Câmara de Comercio Exterior/Comitê Executivo de any additional ones.
3 Gesto (17 March 2020).
For a discussion of the impact of the COVID-19 on sea- 8
Notification by Permanent Delegation of Canada to
ports, see Putzger, Congestion Looms at U.S. ports as the WTO (26 March 2020). Government of Canada -
Import Restrictions. While countries seek
shops and factories pile up, The Loadstar, Mar. 31, 2020 Justice Laws. to facilitate the import of medical products
(online edition), accessible at https://theloadstar.com/ 9
congestion-looms-at-us-ports-as-shops-and-facto-
Announcement of the State Council Tariff Commission and pharmaceuticals, some countries have
on the second exemption list of tariffs on the United States
ries-close-and-imports-pile-up/ and Canada tax commission announcement 2020. taken the step of prohibiting the impor-
4
See, e.g., Paris, Ship Operators Brace for Further Port 10
European Commission Notice 2020/C 96 I/01 (24 tation of animals from China and Hong
Disruption, Wall St. J., Mar. 27, 2020, at B6, col. 5. March 2020). Kong. The WTO website lists such actions
l l
CUSTOMS & TRADE MAY 2020 JOURNAL OF INTERNATIONAL TAXATION 31
 China accounted for 95% of U.S. imports
as being taken (as of March 26) by Krgyz of ibuprofen, 91% of U.S. imports of hy-
Republic, Mauritius, Indonesia (lab testing drocortisone, 70% of U.S. imports of
required) Kazakhstan and Russia. acetaminophen, 40% to 45% of U.S. im-
ports of penicillin and 40% of U.S. imports
Imposition of Export Controls. We present of heparin, according to Commerce De-
a sampling of recent activity. It appears partment data. In all, 80% of the U.S.
supply of antibiotics are made in China.14
that once one nation imposes a new re-
striction, we often see “me too” restrictions More about this later. The need to en-
from trade partners. There is a mad scram- courage imports of medical goods or of
ble for nation states to acquire and hoard the raw materials or components needed
medical supplies, much as we see shoppers to produce medical supplies that are in
strip grocery store shelves to hoard everyday short supply is acute. To encourage the
staples: soup, pasta, flour, toilet paper and importation of medical equipment, the
the like. U.S. Trade Representative (USTR) has is-
From a recent online article,11 we learn sued Exclusions for many medical prod-
that some 60 countries have initiated ex- ucts (masks, protective shoe and boot
port restrictions. Among nations erecting covers, stethoscope covers, etc.) imported
barriers regarding material needed to fight from China.15 These products would oth-
the Pandemic, India stands out. It is the erwise have been subject to an additional
world’s leading maker and exporter of 7.5% or 25% Section 301 tariffs.16
generic drugs and a leading exporter of On March 25, the USTR published a
active pharmaceutical ingredients (APIs) request for comments about allowing fur- A Registered Nurse (RN) from Columbia University
picks up personal protective equipment (PPE) and
which are the building blocks of more ther modifications, i.e., issuing more ex- other supplies for use by medical field personnel at
a New York State emergency operations incident
complex drugs. The Indian Directorate clusions from additional tariffs.17 January command center during the coronavirus outbreak,
General of Foreign Trade imposed a li- 30 was the last day on which an importer New York, U.S., March 17, 2020.
cense requirement12 before common med- or an interested party (such as a customer REUTERS/MIKE SEGAR

icines and APIs could be exported. This or trade association) could petition the
was followed by a March 24 restriction USTR for an exemption from any of the On March 16, unscrupulous importers
on exports of ventilators and respirators. Section 301 tariffs. Obviously, at the time attempted to import through the port of
This Indian action followed a similar an- the Exclusion request protocols were is- El Paso, TX bottles of Clorox, commonly
nouncement by China restricting exports sued—the last request process, for products used to disinfect surfaces that might har-
of key medical supplies. on List 4A, was announced on October 24, bor the deadly COVID-19 pathogen. CBP
On March 26, Switzerland imposed a 2019—no one had heard of COVID-19. observed that the bottles, some with bro-
license requirement13 before personal pro- Effective from March 23, U.S. Customs ken safety seals, appeared to have been
tective equipment effective in combating and Border Protection (CBP) reversed tampered with. Subsequent CBP labora-
the spread of a virus could be exported course to allow imports of disposable rub- tory testing revealed that the bottles were
(masks, gloves, goggles and swabs). France ber gloves from a Malaysian company adulterated and contained mostly water.
requisitioned all internal supplies of masks which had previously been denied entry
and prevented their export from French for labor violations, i.e., using forced or 11
Boykoff, Sebastian and DiDinato, “In the race to secure
national territory. Albania temporarily coerced labor.18 medical supplies, countries ban or restrict exports,”
restricted exports of drugs and medical At the same time as the $2 trillion stim- Mar. 27, 2020, available at https://www.cnn.com
/2020/03/27/business/medical-supplies-export-ban
devices. Vietnam adopted Decision ulus action, another revenue measure /index.html
12
868/QD-BYT, introducing export permits went largely unnoticed. Om March 20, Notification No. 50/2015-2020, Ministry of Commerce
and Industry - Department of Commerce, Directorate
for medical masks from 11 March 2020. CBP announced that it would entertain General of Foreign Trade (3 March 2020).
delays in duty payments, but that offer 13
State Secretariat for Economic Affairs - Ordonnance.
14
U.S. Actions Taken re: Imports. U.S. meas- was rescinded on March 26. Wake-up call: Chinese control of U.S. pharmaceutical
ures have been consistent with those taken supplies sparks growing concern, Washington Times,
Mar. 17, 2012, available online at https://www.wash-
by its trading partners. One impetus to CBP to the Rescue. CBP has made headlines ingtontimes.com/news/2020/mar/17/china-threat-
take any extraordinary action to lower the recently for its efforts on the front lines 15
ens-restrict-critical-drug-exports-us/
OFFICE OF THE UNITED STATES TRADE REPRESEN-
burden of imports is that the U.S. is dan- of the COVID-19 battle. One of CBP’s TATIVE Notice of Product Exclusions: China’s Acts,
gerously reliant on such imports. Matching Priority Trade Issues is to prevent coun- Policies, and Practices Related to Technology Transfer,
what took place in most other sectors, the terfeit or adulterated products19 from en- Intellectual Property, and Innovation, 85 Federal Reg-
ister 13970 (3/10/20); OFFICE OF THE UNITED
U.S. has outsourced its production of med- tering the U.S. stream of commerce. STATES TRADE REPRESENTATIVE Notice of Product
ical products to overseas factories. A note Maybe you have seen pictures of fake Exclusions: China’s Acts, Policies, and Practices Relat-
ed to Technology Transfer, Intellectual Property, and
in The Pharma Letter, a pharmaceutical Rolexes seized by CBP and crushed by a Innovation, 85 Federal Register 15015 (3/16/20);
industry newsletter makes the point. steamroller?20 OFFICE OF THE UNITED STATES TRADE REPRESEN-

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JOURNAL OF INTERNATIONAL TAXATION MAY 2020 CUSTOMS & TRADE
 CBP issued a notice on its Cargo Systems
Messaging Service which provided useful
information to importers of medical
goods.22 Efforts are underway to continue
to facilitate immediate release of critical
components and supplies to combat
COVID-19, which would require coor-
dination between CBP and its Partner
Government Agencies (PGAs), principally
the FDA, and CBP announced that it had
established a COVID-19 Cargo Resolution
Team, a special multi-disciplinary team
led by its Pharmaceuticals, Health, and
Chemical Center of Excellence to smooth
the way for the import of essential medical
supplies.23

U.S. Export Controls. The U.S. Department

of Commerce, Bureau of Industry and Se-
curity (BIS), regulates the export of
U.S.-origin products, including many
pharmaceuticals, vaccines, pathogens and
safety equipment. To date, BIS has not
established any new restrictions on the
export of medical materials that could be
used to combat the Pandemic. But Pres-
ident Trump has invoked the Defense
In essence, the goods were counterfeit. and Prevention (CDC) to screen those Production Act24 to stop 3M exports for
Standard procedure in this situation would entering the U.S. for the COVID-19 Virus. protective masks. This invocation of war-
be to deny entry of the merchandise and At all air, land and sea Ports of Entry, CBP time powers prompted 3M to warn that
to seize and destroy it.21 Officers and Border Patrol Agents are this could have humanitarian implications
tasked with identifying and referring in- and could trigger reprisals that would stop
Interagency Teamwork. CBP has the au- dividuals with symptoms of COVID-19 exports to the U.S., the latter point echoed
thority to screen not only cargo, but to CDC or local public health officials for by Canada’s Justin Trudeau.
human travelers as well. CBP has teamed enhanced health screening. But that does not mean that the existing
up with numerous federal agencies in- Finally, after consultation with the export-restricting regime has been relaxed.
cluding the Centers for Disease Control Food and Drug Administration (FDA), The Office of Foreign Assets Control
(OFAC) is the agency charged with en-
TATIVE, Notice of Product Exclusions: China’s Acts,
20
See Neville, “Counterfeit Goods Seizure at the Border,”
forcing most U.S. sanctions programs.
Policies, and Practices Related to Technology Transfer, 20 JOIT 20 (Aug. 2009). These are directed against high-risk regimes
21
Intellectual Property, and Innovation, 85 Federal Reg- Under the authority of 19 U.S.C. section 1526. Any ref- that fall under the rubric of rogue nations
ister 16547 (3/17/20). erence to counterfeit goods immediately implies Chi-
16 na, the source of the vast majority of counterfeit goods that do not follow international laws and
For a discussion of the China Section 301 tariffs, see
Neville, “China Trade Sanctions: What to do,” 29 JOIT
imported into the U.S. This is no exception. Motivated conventions. Exports to Iran, Syria, North
mostly by self-interest, China is now looking to stop
26 (Sept. 2018) and Neville, “Sales for Export from the flow of counterfeit goods, especially those with
Korea, and Sudan routinely require a special
China: Customs Valuation Plays,” 30 JOIT 32 (Sept. health and safety implications. See, e.g., the report in license. Humanitarian considerations led
2019). Stevenson and May, China Fights to Police Surging
17
Supply Chain, NYTimes, Mar. 28, 2020, at B1, col. 1.
to a general license for a limited group of
OFFICE OF THE UNITED STATES TRADE REPRESEN-
TATIVE, Request for Comments on Additional Modi-
22
CSMS #42168200 - Information for Filing Personal products, medical equipment and supplies.
fications to the 301 Action to Address COVID–19: Protective Equipment and Medical Devices During Iran in particular needs medical supplies
China’s Acts, Policies, and Practices Related to Tech- COVID-19.
23 as it is one of the countries hit hardest by
nology Transfer, Intellectual Property, and Innovation, Information is accessible on the CBP website at
85 Federal Register 16987 (3/25/20). https://www.cbp.gov/newsroom/coronavirus the Pandemic.
24
18
Information on the revocation of the Withhold Release The Defense Production Act (Pub. L. 81–774), codified Vladimir Putin called on a relaxation
Order, first issued in September 2019, is available at at 50 U.S.C. section 2061 et seq., is a United States of sanctions at a virtual meeting of the
https://www.cbp.gov/newsroom/national-media- federal law enacted on September 8, 1950 in response
to the start of the Korean War. The New York Times G20 on March 26, saying it was a matter
release/cbp-revokes-withhold-release-order-dispos-
able-rubber-gloves
reported that the Act has been used routinely by Pres- of life and death. The Kremlin chief said
ident Trump. Kanno-Youngs and Swanson, Wartime
19
See CBP website, available at https://www.cbp.gov/ Law Has Been Used Routinely by Trump, N. Y. Times, it was important to establish “green cor-
trade/priority-issues/ipr Apr. 1, 2020, at A4, col. 3. ridors free of trade wars and sanctions”
l l
CUSTOMS & TRADE MAY 2020 JOURNAL OF INTERNATIONAL TAXATION 33
 that would ensure supplies of medication, One of the points being debated is the
food, equipment and technology.25 degree to which the federal government
Softening earlier statements, Secretary needs to be involved33 Stated otherwise,
of State Pompeo announced at a March can the private sector manage the prioritized
31 news conference that the U.S. might switch to production of medical products
rethink its sanction regimes against Iran on its own initiative?34 Taking it to the next
and other countries.26 level, the New York Times even published
do-it-yourself or bricolage instructions on
Border Closings. The U.S., with the coop- how to make a face mask at home.35
eration of Mexico, has undertaken to ham-
per the spread of the Pandemic by International Bodies’ Calls for Action. The
restricting the flow of travel between the International Chamber of Commerce
two countries to essential traffic until (ICC) is the leading representative of the
April 21. 27 By mutual consent, the land private sector at the international level.
border with Canada was also closed until The ICC frequently collaborates with in-
April 21 to all but commercial or otherwise ternational organizations such as the
essential traffic.28 World Trade Organization (WTO), the
World Customs Organization (WCO)
U.S. Measures on Domestic Production. Any and the Organization for Economic Co-
review of the impact of COVID-19 that operation and Development (OECD) as
did not address the government’s boosting the leading voice of the private sector in
domestic production as a response to helping to shape trade policy.
shortages of critical supplies would be in- On March 12, John Denton, the Secre- The first production ventilators are seen at the Gener-
al Motors Kokomo manufacturing facility in response
complete at best and would be misleading. tary General of the ICC, along with the B20 to the coronavirus disease (COVID-19) outbreak in
For example, President Trump has used and the World Health Organization Kokomo, Indiana, U.S. April 13, 2020. April 13, 2020.
AJ MAST/GENERAL MOTORS/HANDOUT VIA REUTERS
the authority of the Defense Production (WHO), wrote an open letter to the G20
Act to commandeer General Motors plants Chairman asking for international coop-
to produce ventilators.29 Apparently state eration in battling the Pandemic. The ICC management protocols and how the cus-
governors and some congressional De- and its co-signers urged the G20 to prioritize toms authorities were engaged in com-
mocrats have called for the president to an agreement “on coordinated action to munication, collaboration and cooperation
issue even further federal orders under ensure access to essential medical supplies with their partner government agencies
that Act’s grant of authority. and scale all necessary public health funding and the private sector. This is a very worth-
Further evidence suggests that we are to tackle COVID-19.” Called for specific while and intelligent and, above all, prac-
seeing a return to my father’s time. During actions included the lifting of import bans tical response to this unprecedented challenge.
World War II, while he was in the South and tariffs on relevant medical material. We would expect nothing less, as the WCO
Pacific with the Marines, the U.S. manu- The ICC seeks to collaborate with the WHO represents the point where “the rubber meets
facturing sector back home was supporting to mobilize global business leaders and en- the road” and the customs function is noth-
him by blasting along as the arsenal of sure the latest and most reliable information
democracy. There are reports of compa- and tailored guidance. Another private sec-
25
nies making materials for computer tor group, the Global Business Coalition, Available at https://news.yahoo.com/putin-calls-
sanctions-moratorium-g20-summit-163523072.html
screens diverting their production to cus- has also called for extraordinary steps to 26
Accessible at https://www.reuters.com/article/us-
tomers making masks. Companies making redress the COVID-19 Pandemic.36 health-coronavirus-iran-usa/us-could-rethink-iran-
baseball uniforms are switching to making As a result of the Pandemic, the WTO sanctions-in-light-of-coronavirus-pompeo-idU.S.KBN
21I33F
masks,30 as is the My Pillow company. A is on high alert and has built a page on its 27
On March 20, U.S. citizens and permanent residents
consortium of American textile companies website37 dedicated to providing “up-to- returning to the U.S., students, persons traveling for
led by Parkdale Mills and including Hanes the minute trade-related information in- medical care, farm workers and other categories of
travelers were given the right to travel across the bor-
Brands has switched over to mask pro- cluding relevant notifications by WTO der. Tourism was expressly excluded. DEPARTMENT
duction. In the same vein the Brooks members.” The theme on this page, con- OF HOMELAND SECURITY, U.S. Customs and Border
Protection, Notification of Temporary Travel Restric-
Brothers Chairman and CEO announced sistent with the ICC letter, is to encourage tions Applicable to Land Ports of Entry and Ferries
that it was also switching over its domestic cooperation and global solutions in order Service Between the United States and Mexico, 85
factories’ production to make up to to reverse the plunge in international trade. Fed. Reg. 16547 (3/24/20).
28
On March 20, CBP limited cross-border travel to
150,000 masks daily.31 The vigorous pri- For its part, the WCO has undertaken essential activities, defined as related to military activ-
vate sector response 32 is not limited to the initiative to poll customs authorities’ ities, work, schooling, or to receive medical treatment
U.S. companies—there are reports that best practices. The goal was a sharing of among other things. Tourism was specifically exclud-
ed. DEPARTMENT OF HOMELAND SECURITY, U.S.
LVMH has switched cosmetics production measures taken to facilitate the movement Customs and Border Protection, Notification of Tem-
to the making of hand sanitizers. of goods while applying appropriate risk porary Travel Restrictions Applicable to Land Ports of

34 l l
JOURNAL OF INTERNATIONAL TAXATION MAY 2020 CUSTOMS & TRADE
 Political Realities. It is fair to say that in-
ternational trade rules have been eased
and liberalized over the last 70 years. There
are more free trade agreements (FTAs)
than ever before – the U.S. has FTAs with
20 countries – and there has been a trend
towards ever lower duty rates. As a result,
international trade has grown exponen-
tially over the decades.
At the same time, it is also true that
the Trump Administration has shaken
things up and, from China’s perspective,
weaponized trade. The Section 301 Sanc-
tions, in four separate tranches (Lists 1-
4A), involve the levy of additional tariffs
on goods whose annual volume of imports
into the U.S. reach $550 billion of goods
between the two largest economies of the
world. From the outset of the Trump Ad-
ministration in January 2020, trade has
hogged center stage more than at any time
since the 1930s.
Caught in the grip of this Pandemic,
there is confusion and chaos, and in every
democracy the cry in the street is to “do
more.” Glance at many U.S. headlines on
any given day and you will read of political
ing if it is not that precise point where ended his address with a strong resolve: leaders denounced by their rivals for hav-
trade policy and economic activity intersect “Together we can win this fight.” ing sat on their hands while the virus
at the border. The WCO was not finished with that spread. President Trump has even been
As Secretary General Mikuriya’s mes- initiative as it opened up a new forum with accused of “having blood on his hands”
sage makes clear, the challenge is to pre- an Urgent Notice aimed at stopping a par- by political rivals for his perceived inaction
vent and fight the spread of COVID-19 ticularly heinous offense, counterfeiting and failed responses to the COVID-19
but safeguard supply chain continuity.38 of medical supplies and equipment.39 The outbreak: why were flights from China
He saluted the customs officers who are idea that shoddy and ineffectual counter- not stopped even earlier than February
on the front lines at the ports of entry and feits are hitting markets is frightening. 2? This, even though one prominent po-
are thus in a very vulnerable position. He Well done! litical rival accused him of being an “hys-
terical xenophobe” when the flight ban
was announced. Why was there a delay
34
Entry and Ferries Service Between the United States For a “no” vote, see Kline, Manufacturers Are Already in having virus test kits available and dis-
and Canada, 85 Fed. Reg. 16548 (3/24/20). Fighting Coronavirus, Wall St. J., Mar. 31 (online edition).
29 35
tributed? Where were the ventilators and
See Sanger, Haberman, Karni, PLEA FOR VENTILA- How to Sew a Face Mask, NYTimes, Apr. 1, 2020, at
TORS AS TRUMP SIGNS AID BILL, NYTimes, Mar 28, A15, col. 1.
masks?
2020, at A1, col. 6. 36
Available at https://www.politico.eu/wp-content The last two queries beg the question,
30
See Waldstein, In Their New Gear, Medical Workers Wear /uploads/2020/03/GBC-JS-Covid-19_Medical-Devices_ whether the private sector can act on its
Pinstripes, NYTimes, Mar. 29, 2020, at AP1, col. 1.
31
Medicines-26032020-Last-version.pdf?utm_source= own initiative or whether the Executive
Press Release available at https://www.brooksbroth- POLITICO.EU&utm_campaign=4b12499257-EMAIL
ers.com/masks-press-release/masks-press-release, _CAMPAIGN_2020_03_27_01_21&utm_medium=
Branch must conduct all the forecasting
default,pg.html?CMP=EMC_20200331_Medical email&utm_term=0_10959edeb5-4b12499257- and issue all the fabrication orders and,
Production_CustomerUpdate_RET_NPR_F&et_cid=77
23247&et_rid=182853507&sid=182853507&j=772324 37
189822689 indeed, “run the show.” That is one of the
Accessible at https://www.wto.org/english/tratop_e open questions to be decided in Novem-
7&l=547&sfmc_sub=182853507&u=144133397&jb=32
74&mid=7001508&dtm_em=994016da0aea03ed02 /covid19_e/covid19_e.htm
38
The video of the Secretary General’s message and oth-
ber’s election.
90947694262523
32
See generally, Jacobs and Abrams, The Power to Turn er information is available on a dedicated website Beyond those critiques of the public
Car Parts into Ventilators, and Bras into Masks, NYTimes, page, http://www.wcoomd.org/en/topics/facilita- health, and closer to the heart of this dis-
tion/activities-and-programmes/natural-
33
Apr. 1, 2020, at B3, col. 1 cussion, some have blamed Trump Ad-
For a discussion of criticisms surrounding GM’s race disaster/coronavirus.aspx
39
Available at http://www.wcoomd.org/en/media/
ministration trade policies for causing
to build ventilators, see Boudette and Jacobs, “Racing
to Build Ventilators,” Stunned by Trump’s Vitriol, newsroom/2020/march/covid_19-urgent-notice- or exacerbating the scarcity problem.
NYTimes, Mar. 31, 2020, at B1, col. 5. counterfeit-medical-supplies.aspx One prominent and consistent critic of
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CUSTOMS & TRADE MAY 2020 JOURNAL OF INTERNATIONAL TAXATION 35
 President Trump and his trade advisers state in which the U.S. has found itself
is Robert Zoellick, the former head of raises national security concerns?
the World Bank and, before that, the top We find that the Federal Government
trade official in the second Bush admin- was already invested in the need to bring
istration. The headline of his bylined op- this manufacturing home—to “onshore”
ed piece in the Wall Street Journal says the manufacture of antibiotics. The Bio-
it all, “Trump’s Tariffs Leave the U.S. medical Advanced Research and Devel-
Short on Vital Medical Supplies.” 40 Mr. opment Authority (BARDA) is a little
Zoellick argues that Trump trade policies known—at least little known to me—fed-
and his “economic isolationism” are to eral agency. It has funded the development
blame for the decisions of some countries of an antibiotic (NUZYRA) to fight com-
to restrict their exports of medical sup- munity-acquired bacterial pneumonia
plies. and specifically included the goal of meet-
The current U.S. Trade Representative, ing U.S. onshoring and manufacturing
Robert Lighthizer, sharply replied in a let- security requirements. According to the
ter to the editor of the Journal the next grant recipient company, Paratek Phar-
day. On this issue, I feel that Mr. Lighthizer maceuticals: “This initiative helps to fur-
has it right. He pointed out what should ther secure NUZYRA’s overall supply
be blindingly obvious—in times of dire chain, adding a comprehensive secondary
emergency, say, when there is a global supply chain to our existing infrastructure,
Pandemic that is about to rage through and over the projected collaboration time-
their country, countries’ leaders could frame, will provide for a secure, United
order that necessary medical supplies be States based manufacturing supply chain. Boxes of N95 protective masks for use by medical
kept inside that country. That is exactly We look forward to working with BARDA field personnel are seen at a New York State emergency
operations incident command center during the
what has happened. No amount of loyalty to meet all of these goals.”44 coronavirus outbreak in New York, U.S., March 17, 2020.
to a global trading model is going to We can anticipate that BARDA will REUTERS/MIKE SEGAR

change the fact that a dependence on for- ramp up the funding of these U.S.-based
eign countries for medical supplies is a manufacturing capabilities. tion the doctors and health care providers
“strategic vulnerability” as Mr. Lighthizer in those lands, demand a retention of, and
aptly put it.41 Conclusion and Predictions. I approach access to all, medical equipment and sup-
And while we are on the subject of international trade issues from the per- plies needed on the front lines—their own
globalism and outsourcing, is there any spective of free and fair trade. The Pan- front lines—to tackle the virus. The politi-
reader out there who still thinks it’s a swell demic has raised questions of fairness and cians are feeling the heat and that is why
idea to be so dependent on any other for- justice when it comes to disparities in ac- we may see the protectionist export poli-
eign country, and especially a country cess to necessities—food and medicines cies we discussed earlier (“we want to keep
that is in a competitive/adversarial rela- and medical supplies. It is admirable for it here”) while at the same time see the re-
tionship with the U.S., for our vital medical WTO officials and others to urge calm laxed policies towards the imports of the
supplies? For 80% of our pharmaceuticals? decision-making and the continued lib- same equipment (“we need/want more of
Really? In time of war or national emer- eralization of trade rules regarding scarce it here”). Until the Pandemic burns out,
gency, it should really be better to have medical equipment, supplies, or vaccines. this duality will probably continue.
these resources close to hand, no? What is needed are concrete proposals. We have already devoted time to the
I read that 80-90% of the IV-bags used I fear that these exhortations seem to need for reforms of the WTO and the in-
in the U.S. come from Puerto Rico, a U.S. ignore the political reality that any politi- ternational trading system.45 Surely the
territory. While it is not an adversary of cian or political party who supports such question of the international order in
the U.S., the last time I looked at a map, trade-liberalizing measures will be accused trade will be re-visited once we are on the
Puerto Rico is still a long way from the of not protecting his or her own citizens. other side of the Pandemic. The system
continental U.S. The same realities of time Simply put, the rallying cry in each country can and must be evaluated in the context
and distance are true for supply chains is “[Name of country] First!” Still, there of the stresses, dislocations and ruptures
dependent on allies of the U.S. All of this should be every effort to supply medical of supply chains and the ensuing unavail-
reality-checking has led some to advocate supplies and foodstuffs to all—regardless ability of vital commodities. In all of this,
a new self-sufficiency—or more correctly, of what side of the border on which the the U.S. cannot simply close itself off and,
a return to self-sufficiency—for medical need arises. instead, must first re-insert and then re-
supplies.42 And, while the justifications In all of this, there is a clash between assert itself as the natural leader within a
for Section 232 actions on steel and alu- the urgings for more liberalized trade and revamped global system.
minum are questionable,43 would anyone the harsh reality in the streets. Frightened Those who are derided as “China trade
have the temerity to deny that the parlous citizens in every democracy, not to men- hawks” are saying, “This vulnerability of
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JOURNAL OF INTERNATIONAL TAXATION MAY 2020 CUSTOMS & TRADE
 the “bottom line” but that leanness and
efficiency came at the cost of the scarcities
we have been discussing. Prudence dictates
that we must establish a ready reserve of
all products deemed essential. 46Put an-
other way, logistics wins wars and we are
nowhere if not in a war.
Rebuilding U.S. stockpiles of vital
equipment such as N95 respirators and
masks, which had not been replenished
after the 2009 H1N1 virus outbreak, will
be a priority. Only a fool would take the
contra position to the proposition that
there can never be a repeat performance
of colossal supply failures and shortages
of basic medical supplies and drugs.
The facts are what they are—they can-
not be wished away. It is only fair that the
actions by and statements from all leaders
at all levels of government and on both
sides of the political aisle should be judged
on the basis of the information available
at the time. They should not be judged
on the basis of after-acquired knowledge.
One of the principal causes for the
deadly spread of COVID-19 and the delay
in preparing adequate responses to the
the U.S. raised by an over-reliance on tween the effectiveness of the measures impending crisis was the lack of informa-
China is exactly what we have been talking taken by Colombia and those of its neigh- tion and the falsifying of information
about!” Indeed, the 301 tariffs were en- bors, Venezuela and Ecuador. In fact, to coming from China. Even now, we can
gineered to encourage domestic manu- watch a 6PM daily briefing of President expect that China will be aggressive in
facturing across almost all product lines. Ivan Duque is to see an inspirational leader trying to burnish its image, such as by
If President Trump wins re-election in very much in control of the situation, in providing needed medical goods to some
November, we can count on a redoubling equal measures confident and competent, countries, re-shaping the narrative with
of measures to bring manufacturing back whose decisive moves, including his shel- disinformation47 and—always important
to the U.S., with a prioritized focus on the ter-in-place “aislamiento intelligente” to a neomercantilist—turning a tidy profit
domestic production of medical equip- [smart, or intelligent, isolation], had kept at the same time. After all this, the report
ment, medicines and other vital supplies. his country’s COVID-19 mortality to a that Chinese “wet markets” are open for
Faced with this challenge of historic startling 57 persons as of April 6. business again is horrifying.
proportion, the U.S. and other countries All of this is likely to lead to profound Even before the COVID-19 experience,
must be resilient and resourceful in equal sourcing and supply chain makeovers. China had an image problem. One meas-
measures. The results have been mixed. The move toward “just in time” supply ure of China’s repute among most coun-
For example, we see a stark contrast be- chain models cut some costs to sweeten tries—at least those developed countries
not co-opted by economic initiatives such
40 44 as One Belt One Road—is the fact that, to
Wall Street Journal, March 18, 2020 (print edition Press Release, April 1, 2020, available at https:/
March 19) available at https://www.wsj.com/articles/ /finance.yahoo.com/news/paratek-pharmaceuticals- my knowledge, not a single country had
trumps-tariffs-leave-the-u-s-short-on-vital-medical- announces-initiation-funding-120010234.html previously defended China and argued
supplies-11584551602 45
41 Neville, “Trump Criticisms of the World Trade Organ- that the Trump Administration was not
Even the staunchest supporters of a global worldview ization,” 30 JOIT 37 (Dec. 2019).
are forced to acknowledge that the General Agree- 46 justified in taking action against China’s
Finnish preparation serves as an example. See Ander-
ment on Tariffs and Trade 1994 allows for extraordi-
son and Libell, Always Stockpiling for World War III,
intellectual property thefts. There was
nary measures undertaken for health (Art. XX(b)) or
national security (Art. XXI(b)(iii)) reasons. Finland Doesn’t Need to Hunt for Masks, NYTimes, Apr. grousing about the remedial measures, to
42
See, e.g., Herman, Make America the Medicine Chest 47
6, 2020, at A7, col. 1. be sure, but no gainsaying of the long-
of the World, Wall St. J., Mar. 20, 2020 at A17, col. 1. Made easier after the expulsion of reporters from the overdue need for a day of reckoning.
43 three leading U.S. newspapers—the Wall Street Jour-
See Neville, “National Security Actions on Imports and In the aftermath of the COVID-19
Investments,” 28 JOIT 25 (Mar. 2017) and Neville, nal, the New York Times and the Washington Post.
48 virus, China may yet be called to ac-
count.48 God help us all. l
“GSP: The U.S. Giveth…and Taketh,” 30 JOIT 33 (June See Dhume, Delhi Isn’t Buying Beijing’s Coronavirus
2019). Hero Act, Wall St. J., Apr. 3, 2020, at A17, col. 1

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