Trade Therapy: Deepening Cooperation to Strengthen Pandemic Defenses
to firms engaged commercially in the medical goods sectors have been documented, and state resources have been provided in the following ways, among others:45 financial grants (99); state loans (78); tax or social insurance relief on imported medical goods (27); loan guarantees (25); and production subsidies (10). State resources were made available along the entire production chain of COVID-19–related medical goods. Following is a breakdown of the types of medical goods firms receiving state support since January 1, 2020 (a subsidy may be given to a firm operating in more than one line of business): 45 percent of subsidy awards were received by medical equipment producers (such as manufacturers of ventilators); 62 percent were received by makers of medical supplies such as PPE; 45 percent were received by firms involved in discovering or producing medicines, including vaccines; and 71 percent of specific subsidy award decisions benefited firms involved in biologics production. There are societal gains to be made by supporting the private medical sector both to accelerate manufacturing capacity investments at risk and to expand capacity beyond the profit maximizing level. Vaccine production can illustrate the point. A profit maximizing firm would wait until after resolution of uncertainty associated Figure 2.12 Weekly breakdown of active subsidy policy interventions affecting medical goods since the onset of the COVID-19 pandemic (excluding China), January 2020 to March 2022 300 Cumulative number of active subsidies in force
275 250 225 200 175 150 125 100 75 50 25
Source: Global Trade Alert database. Note: The figure’s data excludes subsidies in China.
20 22 13 /
20 22
03 /
1/ 01 /0
20 21 /0 1/ 10
20 21 /0 1/ 07
20 21 1/ 04 /0
20 21 1/ 01 /0
20 20 /0 1/ 10
20 20 /0 1/ 07
01 /2 02 0 04 /
/0 1/
20 20
0
01
92
