# **1. Introduction**

One element of the policy response to the COVID-19 pandemic by governments was to greatly expand public procurement (PP) of critical medical supplies, notably personal protective equipment (masks, gloves, face-shields, respirators), ventilators, laboratory equipment (kits, reagents, swabs, laboratory consumables) and medicines. In some countries, this procurement response included requisitioning of available stocks of such products and a ban on their export. Many countries made active use of trade policy instruments to enhance access to essential supplies, involving a mix of measures to facilitate imports (lowering taxes and import tariffs and creating “green channels” at borders to speed through imports) and export controls (Baldwin and Evenett, 2020). WTO rules permit the use of trade restrictions in public emergencies, but require these to be temporary, lasting only for the duration of a crisis. The reason is that use of export controls can give rise to negative spillovers, including by constraining the ability of firms to ramp up production, leading to increased prices, and impeding the ability of other countries to import supplies (Atkinson et al. 2020; Evenett, 2020; Gereffi, 2020; Hoekman et al. 2020).

In many countries, government procurement of goods and services is subject to regulations that seek to ensure ‘value for money’, maximizing efficiency and effectiveness. This is also reflected in requirements and processes that enhance transparency, assure due process and accountability, and prevent corrupt practices and/or collusion among bidders. A core feature of PP processes is to mimic the market by encouraging (requiring) competition through open calls for tender.<sup>6</sup> International agreements that cover procurement practices – such as the Treaty on the Functioning of the European Union that applies to EU member states, the WTO Agreement on Government Procurement (GPA) and recent vintage preferential trade agreements (PTAs) – embody not only generally accepted good PP practices but require that foreign firms be treated the same as national bidders. The main thrust of such agreements is to open procurement markets to foreign competition.

As do all trade agreements, national procurement regulations and international agreements that discipline PP practices include exceptions that allow governments to respond rapidly to emergencies in ways that may be inconsistent with the rules that apply in normal times. This might take the form of direct contracting for supplies from producers without going through the processes that normally would be used (Baxter and Casady, 2020). At the time of writing it is not yet possible to investigate the extent and effectiveness of emergency procurement measures taken by different jurisdictions.<sup>7</sup> Instead, we examine the relationship between precrisis attributes of public procurement regimes as reflected in indicators compiled by the World Bank and the trade policy behavior of countries in the first seven months of the COVID-19 pandemic. Most trade policy activism was observed in the initial months of the pandemic, reflecting the feasibility of applying trade policy instruments very rapidly. Similarly, trade measures can also be removed rapidly—and in principle should be to abide by WTO rules. Global excess demand for protective equipment and COVID-19 medical supplies was met with a massive supply response, attenuating the rationale for using trade policy instruments for an extended period.

> 6 The basic features of good administrative practice in public procurement are summarized in UNCITRAL (2014) and World Bank (2017).

> 7 Comprehensive and comparable information on whether and how governments diverged from normal practices in procuring supplies does not exist. Cocciolo et al. (2020) and OECD (2020a) discuss procurement challenges and experiences during the first seven months of the COVID-19 pandemic.

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