For companies trying to import medical supplies and essential equipment at the height of the COVID-19 crisis, perseverance was everything.
Some suppliers closed their factories because of lockdowns and social distancing measures enforced around the world. Airfreight and sea cargo shipments plummeted, not only as a result of border closures but also because transportation workers have been sick or not been allowed to return to work.
“It’s been a major nightmare for importers,” said Faye Sumner, Chief Executive Officer of the Medical Technology Association of New Zealand that represents manufacturers, importers and distributors.
Many economies have also imposed export restrictions and trade barriers, halting international sales of medical gloves, masks and other essentials, as they focus on ensuring sufficient supplies at home to combat the virus. Some manufacturers that are exporting have requested upfront or prepayments from importers before agreeing to send supplies.
“This causes cash flow problems for importing companies. Some have been prepared to pay a premium, a huge markup, to secure supplies. It’s become a very disrupted and challenging supply chain,” Sumner said.
As the COVID-19 crisis continues, cooperation and coordination between economies is critical to address such disruptions to the movement of medical supplies and other essential goods across borders. Smooth flowing medical supply chains are also key to fighting this and future pandemics and to helping restore economic growth.
Acting on directions from APEC Trade Ministers, senior officials have met to advance work on identifying remedial policy actions to restore upended trade flows and to fast-track recovery of the region’s economy.
The APEC region’s growth is expected to decline by 3.7 percent this year, as a result of the health and economic crisis wrought by the pandemic, according to the APEC Policy Support Unit, the multilateral body’s research arm. The decline compares to the 3.6 percent growth in 2019.
“We recognize the importance of keeping our markets open and working together to deliver a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, to ensure that trade and investment continue to flow in these trying times,” Trade Ministers said in a joint statement.
Senior officials, at their meeting, took into account recommendations from APEC business leaders who have called on economies to remove export restrictions to ensure adequate access to essential medical goods. The APEC Policy Support Unit, in a research brief, has said that active trade policy responses, including closer cooperation and removing or reducing tariffs on medical supplies and personal protective products, will save lives and strengthen members’ capacity to fight the pandemic.
APEC has long been at the forefront of efforts to deepen regional economic integration, including strengthening supply chains. The region accounts for almost 60 percent of world trade and 40 percent of its population. APEC had already developed a supply chain security toolkit for medical supplies, for example, to help industry and regulators adopt best practices, as products are imported and exported in a globalized marketplace.
Supplying those in need
Throughout the crisis, manufacturers essential to the fight against COVID-19 have been forced to swiftly adapt and innovate, not only to protect their own workforces from the virus, but to ensure they meet surges in demand for their products.
For one of the world’s largest medical glove manufacturers, Hartalega, that has meant strict hygiene, social distancing and other measures for its factory workers.
“We had to put in place a business continuity plan to mitigate the risk of COVID-19 as we continued to operate even during the lockdown,” said Mun Leong Kuan, Group Managing Director of Hartalega Holdings in Malaysia.
The company initially suffered shortages of some imported raw materials because of restrictions in other economies. But these issues were resolved through direct cooperation between Malaysia and the other economies involved.
“Having the lion’s share of the market means Malaysia is duty bound to ensure that the supply of gloves, a primary PPE [personal protective equipment] for the fight against COVID-19, remains uninterrupted,” he said.
Mytrex, which makes melt blown fabric, the critical middle layer of medical masks that halt the virus, avoided disruptions in its supply chain after fortuitously stocking up on raw materials months ago. Management ordered four months’ supply of polypropylene in December after reading news reports of a possible severe flu in the coming winter.
Sy-Ming Guu, Chairman and CEO of Mytrex Health Technologies in Chinese Taipei, said advance planning and preparation were critical in the event of such emergencies, along with cooperation and knowledge sharing between economies.
“The outbreak of COVID-19 attacked societies quietly and surprisingly,” said Guu, whose company is exporting its masks globally after first meeting mandatory requirements for the local market.
“All member economies should establish certain levels of inventory for protective supplies as well as install some production lines for emergent needs.”
In the weeks and months ahead, Sumner said APEC could play a key role in facilitating trade so that new pandemic response innovations, such as rapid testing kits at airports and other border points, reached all economies. APEC could also take a leading role in assisting economies to strengthen cooperation, which could include agreement on new regional procedures that are enacted during such emergencies, to ensure smooth trade flows of essential medical supplies.
APEC Trade Ministers are scheduled to meet virtually at the end of the week.