Some suppliers have closed their factories because of lockdowns and social distancing measures enforced around the world, the Medical Technology Association of New Zealand said in a written statement issued by the APEC Secretariat and received here on Tuesday.
Shipments of airfreight and sea cargo have dropped due to border closures coupled with the issue of transportation workers reporting sick or are not being allowed to return to work.
This has been a “major nightmare" for importers, according to Faye Sumner, chief executive officer of the Medical Technology Association of New Zealand that represents manufacturers, importers, and distributors.
To ensure sufficient domestic supply, many economies have also imposed export restrictions and trade barriers on sales of medical gloves, masks and other essentials.
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Some manufacturers who are exporting medical products are requesting upfront or prepayments from importers prior to shipping, causing cash flow problems for importers, Sumner noted.
"Some (importers) have been prepared to pay a premium, a huge markup, to secure supplies. It's become a very disrupted and challenging supply chain," Sumner remarked.
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 key to fighting the current and future pandemics, and for helping restore economic growth.
Economic slowdown
Acting on directions from APEC Trade Ministers, senior officials have met to advance work on identifying remedial policy actions to restore disrupted trade flows and to fast-track recovery of the region’s economy.
The APEC region’s economic 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. In comparison, the region recorded a 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," APEC Trade Ministers have said in a joint statement.
During their meeting, senior officials took into account recommendations from APEC business leaders, who have urged 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 response, including closer cooperation and removal or reduction of tariffs on medical supplies and personal protective products, will save lives and strengthen members' capacity to fight the pandemic.
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APEC, which accounts for almost 60 percent of world trade and 40 percent of its population, has long been at the forefront of efforts to deepen regional economic integration, including strengthening supply chains.
For instance, APEC has already developed a supply chain security toolkit for medical supplies to help the industry and regulators adopt best practices for the import and export of products 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 enforcing strict hygiene, social distancing, and other measures for 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 stated.
Mytrex, which makes meltblown fabric that forms the critical filtration layer in medical masks, avoided disruptions in its supply chain after fortuitously stocking up on raw materials months ago. The company’s 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 are 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 masks globally after meeting the mandatory requirements for the local market first.
"All member economies should establish certain levels of inventory for protective supplies as well as install some production lines for emergent needs," Guu added.
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 provision of rapid testing kits at airports and other border points, reach 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 health emergencies, to ensure smooth flow of essential medical supplies, Sumner added.
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Editor: Sri Haryati
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