COVID-19 Vaccines Give Insight into How Global Supply Chains Work
A paper published this month by the Peterson Institute for International Economics analyzes how vaccine supply chains were setup during the pandemic and what it can tell us about international trade. The production and distribution of vaccines were put under unordinary pressures, but still the paper draws parallels to the cross-border trade of other goods.
"The business model that much of the pharmaceutical industry had shifted toward over the previous 25 years involved fragmentation," the reports states. "As tariffs and other trade barriers had fallen globally, information and communications technology (ICT) developed, shipping and logistics efficiency increased, and protection of intellectual property rights steadily improved. The fact that trade could play a greater role in distributing pharmaceutical products globally meant that companies could operate fewer plants but at a larger scale."
Vaccine production highlights the positive side of globalization and international trade, wrote Paul Krugam in a recent New York Times opinion column. "These miracle vaccines are incredibly complex products that would have been hard to develop and produce in any one country, even one as large as the United States. A global market made it possible to deliver all the specialized inputs that are saving thousands of lives as you read this."
The paper states, "It shows how complex global supply chains emerged behind the scenes—in many instances nearly from scratch—to produce the billions of doses of vaccines that have become household names."