Milestones :: Perspectives :: Research
COVID-19 VACCINE PRODUCTION AND TARIFFS ON VACCINE INPUTS
World Trade Organization
08 October 2021 :: 35 pages
Among the top 27 vaccine manufacturing economies, Switzerland has the lowest verage applied most-favoured-nation (MFN) tariff at 1.5 per cent for vaccine production inputs.
Iran and Cuba have the highest applied MFN tariff at 11.9 per cent and 10.3 per cent, respectively.
Using criteria of at least 5 per cent tariff for the product group as a “choke point” level, Argentina, India and Iran have all 13 product groups of vaccine inputs which can be considered sensitive/critical at varying levels, depending on the share of these product groups relative to total imported vaccine inputs.
Of the 27 top manufacturers, 23 have at least 5 choke points.
In Kazakhstan, the average tariff for the product group “vaccine ingredients” is almost 29 per cent, and this product group accounts for nearly one quarter of imported vaccine inputs.
Among the different product groups, “vaccine ingredients” are the building blocks for vaccines and yet it is a tariff choke point for 17 manufacturing economies. On average, the lowest tariff is for “heat marker vaccine vial monitor”, with the exception of Iran, which levies a tariff of 32 per cent (the highest average product group duty imposed by an individual economy).
Tariffs on critical products to manufacture vaccines remain high, especially in some developing countries, and might impede the flow across borders. This is especially important when a high percentage of these inputs must be imported from other economies.
Member cooperation at the WTO could support the elimination or significant reduction of tariffs on these vaccine inputs to reduce costs and to expand output from vaccine manufacturers meeting acute global needs.
WTO issues papers on vaccine inputs tariffs and bottlenecks on critical COVID-19 products
8 October 2021
The WTO Secretariat has published two information notes on issues relating to the manufacturing of COVID-19 vaccines.
The first one is a new study that focuses on COVID-19 vaccines production and tariffs on vaccine inputs. Based on the Joint Indicative List of Critical COVID-19 Vaccine Inputs for Consultation (Version 1.0), this new report explores the most-favoured nation (MFN) tariffs and imports of these products by the 27 top vaccine manufacturing economies in order to identify possible “sensitive” or choke points. Any product group with an average tariff of at least 5% was deemed a possible “choke point”.
The report concludes that tariffs on critical products to manufacture vaccines remain high, especially in some developing countries, and might impede the flow across borders and/or increase the cost of vaccine manufacturing. It calls for members’ cooperation under the WTO to support the elimination and/or significant reduction of tariffs on these vaccine inputs to reduce costs and expand output from vaccine manufacturers meeting acute global needs. The paper can be found here.
The second paper updates the “Indicative list of trade-related bottlenecks and trade-facilitating measures on critical products to combat COVID-19” that was previously published on 20 July 2021. This revised version is based on issues identified and suggestions made by stakeholders at various events and consultations convened by the WTO, as well as with vaccine manufacturers in the context of meetings organized by the Multilateral Leaders Task Force on COVID-19, which was established by the World Health Organization (WHO), the International Monetary Fund (IMF), the World Bank and the WTO.
One common theme that emerges in this update is that essential goods and inputs need to flow efficiently and expeditiously to support the rapid scaling up of COVID-19 production capacity worldwide. As manufacturers scale-up production and establish new sites in different countries, the production network is not only becoming larger, but also increasingly complex and international. Because the delay of a single component may significantly slow down or even bring to a halt vaccine manufacturing, it follows that inputs need to flow expeditiously, and each node within the supply chain network needs to operate seamlessly with the others.
Intended to be a living document, the revision of the “Indicative List of Trade-Related Bottlenecks and Trade-Facilitating Measures on Critical Products to Combat COVID-19” can be downloaded here. Based on this paper, the WTO Secretariat has also issued the infographic “The Global Race to Vaccinate” , which shows the various steps involved in vaccination after manufacture.
See also the infographic “Developing & delivering COVID-19 vaccines around the world“.