The WTO and vaccine supply chain resilience during a pandemic

Chad Bown

No WP22-15, Working Paper Series from Peterson Institute for International Economics

Abstract: Cross-border supply chains and international trade enabled the manufacturing and delivery of billions of vaccine doses to inoculate the world against COVID-19. At the same time, the pandemic revealed how the World Trade Organization (WTO) must change to become more useful in the face of a public health emergency. This paper describes the market failures--especially on the supply side--justifying the domestic subsidies and contracting arrangements used to accelerate vaccine research and development and to increase the scale of vaccine production to save lives, livelihoods, and economic activity during a pandemic. It highlights tradeoffs associated with the US subsidies and the priority-rated contracts written through the Defense Production Act under Operation Warp Speed. This case study reveals a rich environment in which cross-border supply chains exacerbate input shortages in ways that constrain vaccine production, highlighting the need for the WTO to embrace new forms of international policy coordination for pandemic preparedness and response. As part of a pandemic treaty, the paper proposes a plurilateral agreement on vaccine supply chain resilience that would include novel and enforceable disciplines for export restrictions, provisions to trigger coordinated subsidies across countries to jointly scale up vaccine output- and input-production capacity, and market surveillance initiatives on supply chain transparency.

Keywords: WTO; Agreement on Subsidies and Countervailing Measures; export restrictions; advance market commitments; COVID-19 vaccines; input shortages; Defense Production Act; priority-rated contracts; pandemic treaty (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2022-09
New Economics Papers: this item is included in nep-hea and nep-int
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The WTO and Vaccine Supply Chain Resilience during a Pandemic (2023)
Working Paper: The WTO and vaccine supply chain resilience during a pandemic (2023)
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