Short Supply Conditions and the Law of International Trade: Economic Lessons from the Pandemic

11 Pages Posted: 6 Aug 2020 Last revised: 21 Aug 2020

See all articles by Alan Sykes

Alan Sykes

Stanford University - Law School

Date Written: August 3, 2020

Abstract

The COVID-19 pandemic has been accompanied by shortages and potential shortages of products critical to the public health response. Many nations have responded with export restrictions on these products, restrictions that are permitted under international trade law as a temporary response to short supply conditions generally and to public health emergencies in particular. This essay argues that such export restrictions are economically counterproductive from a global efficiency perspective, and that governments acting unilaterally will nevertheless employ them due to international externalities that propagate through the “terms of trade.” This observation raises a puzzle as to why international law should facilitate rather than curtail them. The most plausible answer is that legal authority for such measures is a politically necessary “escape clause” in trade agreements, akin to safeguard measures.

Keywords: WTO, international trade, escape clauses, COVID-19

JEL Classification: F13, K33

Suggested Citation

Sykes, Alan, Short Supply Conditions and the Law of International Trade: Economic Lessons from the Pandemic (August 3, 2020). Stanford Law and Economics Olin Working Paper No. 556, Available at SSRN: https://ssrn.com/abstract=3666477 or http://dx.doi.org/10.2139/ssrn.3666477

Alan Sykes (Contact Author)

Stanford University - Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
48
Abstract Views
198
PlumX Metrics