Apr 06, 2020 - 4:30pm

How Cutting Off U.S.-Canada Trade Will Hurt, Not Help, the Fight Against the Coronavirus


Senior Vice President for International Policy

Grappling with a global shortage of masks and respirators — the personal protective equipment (PPE) that protects doctors, nurses, and others tending to those stricken by the novel Coronavirus — the administration moved on Friday to bar the export of these products. While the intent is understandable, the unintended consequences could be costly.  

In a positive move, Secretary of State Mike Pompeo spoke to Canadian Foreign Minister François-Philippe Champagne about the need for international cooperation to contain COVID-19 transmissions. According to a statement, Pompeo “reiterated the United States’ desire to work with Canada to ensure the viability of international supply chains for crucial medical supplies and personnel.” 

This is welcome news as there’s ample evidence export bans and other trade barriers reduce the availability of critically needed medical supplies. Foreign retaliation is one reason for this. And as Pompeo points out, the international supply chains — in which parts for these products are manufactured and ultimately assembled in value chains that go back and forth across national borders — would be interrupted, leaving everyone worse off.  

One critical example is ventilators, which auto companies such as GM are heroically beginning to manufacture. As Politico reports, “Each ventilator that GM intends to make requires 419 major parts, and there are ‘literally thousands of sub-components that go into those 419 parts, especially given the complexity of several of the individual part designs,’ company spokesperson Jeannine Ginivan said…. About 70 percent of the parts manufactured in the United States and about 10 percent in the rest of North America. The remaining 20 percent needs to be imported from countries including France, Italy, South Korea, Thailand, U.K., Japan, China and Taiwan.” More trade barriers means fewer ventilators. 

The U.S.-Canada trade relationship offers a snapshot of how our international commerce is helping pandemic response in a host of ways. Raising barriers to trade with Canada, Mexico, or others only will weaken our ability to fight the coronavirus.  

Consider:  

MASKS: British Columbia-based Harmac Pacific’s paper mill on Vancouver Island has doubled its pulp exports for U.S. customers to make surgical masks and gowns. The mill is “the world’s only producer of the particular grade of paper pulp used in the manufacture of surgical masks and gowns,” according to a report in Victoria News

TREATMENTS: AbCellera, a British Columbia-based therapeutic antibody discovery company, has “put its rapid pandemic response platform to work, identifying more than 500 unique fully human antibody sequences,” according to a report in Genetic Engineering and Biotechnology News. The firm is partnering with Eli Lilly to co-develop the most promising of those antibodies into potential treatments for COVID-19 with the U.S. National Institute of Allergy and Infectious Diseases (NIAID) (headed by the now famous Tony Fauci), the Dale and Betty Bumpers Vaccine Research Center, and the Gates Foundation. 

VACCINES: A potential plant-based vaccine for COVID-19 is now approaching pre-clinical testing thanks to a partnership between Philip Morris International and British American Tobacco via a U.S. biotech subsidiary Kentucky BioProcessing, according to a report in the Wall Street Journal. PMI’s partially-owned Canadian unit Medicago (based in Quebec) expects to start human trials for a potential vaccine this summer.

STERILIZATION: Single-use medical equipment — surgical gloves, protective clothing, and a host of other products — is sterilized using an isotope called cobalt-60 produced almost exclusively in Canada. The United States gets its cobalt-60 from Nordion, an Ontario-based company. A report in the Hamilton Spectator explains how the need for irradiation (as this process is called) has surged with the pandemic and is helping prolong the usefulness of scarce protective products. (The same isotope is used in cancer treatments, where, again, Canada supplies the entirety of the cobalt-60 used in the United States.)

CAREGIVERS: Between 1,500 and 2,000 healthcare workers who live in Windsor, Ontario, commute daily to work in Detroit, one of the U.S. cities hardest hit by the COVID-19 pandemic. BuzzFeed recounts some of their harrowing and selfless experiences in Detroit’s hospitals. 

These accounts just scratch the surface of how the U.S.-Canada commercial partnership is contributing to the global pandemic response. Much the same could be said of our trade ties to Mexico and others. For years, the Chamber and others have explained that in North America we “make things together,” and that’s as true of healthcare products as it is autos or a host of other goods.

Indeed, the Chamber has been hearing accounts from diverse members companies of how manufacturers are working around the clock to boost output of respirators and ventilators — and drawing on cross-border production chains to do so. This includes firms that have not traditionally produced these products but are seeking to retool their operations to help in pandemic response.

The lesson is clear: Export bans are the wrong approach. Keeping trade flowing isn’t just the right thing to do from a humanitarian perspective; shutting it off only will make it harder to fight the pandemic.

About the Author

About the Author

Senior Vice President for International Policy

Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy.