Hello Read.Cash users what's up? I'm fine. I want to share an article about "COVID-19 Effects in International Trade."
The world is suffering from an unprecedented economic and health crisis on top of that. The COVID-19, also known as Corona Virus, is a viral disease discovered in Wuhan, China, which causes a million deaths around the world. The World Health Organization (WHO) declared it as a pandemic, which means its spread among multiple countries and continents, as of now 199 countries are profoundly affected by this virus.
This series of unfortunate events leads to an economic crisis that the world did not experience for a couple of decades. On the other hand, International Trade, the exchange of capital, goods, and services across international borders is in stasis that leads to the paralyzation of every countries' trading. Indeed that every aspect of financial, economical, relations, and selling are the ripple effect of this pandemic. International trade surely is crippled very severely.
Later in this stage, it will lead to an economic crisis that the world has yet to see if this bleeding won't stop as fast as it can.
The effect of COVID-19 in International Trades
The World trade organization and the other Economist predicted that if the virus will not control for the following months to come. The world can face a drastic backdrop to its economic state that is comparable if not worse than the 2009 economic downfall. They predicted in the pessimistic scenario that international trading would not be wholly recovered in an extended period. However, they also discuss in an optimistic scenario that if the nations will cooperate, the trends for merchandise trade volume will immediately improve in 2021 and will be back in its trend by 2022. It seems the inevitable will happen and reshaping the world's trading movement drastically to the point that it was cripple in the over a while.
Nonetheless, under both circumstances, all the nations will suffer from the economic backdrop, particularly in their import and exports, since the significant lockdowns being implemented all over the world, and it is preventing and limiting the movement non-essential products and services. WTO Director-General Roberto Azevêdo inferring that the unavoidable decline in trade will lead to an inevitable consequence for business and household, not mentioning that it is painfully causing humans to suffer in health and leads to death. The main goal is to neutralize the pandemic and take it into control and mitigate the economic damage to every country.
As the WTO concern, the impact of the COVID-19 outbreak on international trade is not visible. Still, some data will indicate that its impact will cause a significant crisis to the extent of economic development. The manufacturing sector is taking a heavy blow from the pandemic. The direct supply will face an unavoidable disruption that will hinder its production since the virus came from China and rippling down all over East Asia, the world's manufacturing heartland, and crawling its way to the world, including the industrial giants such as US and Germany. The supply chain will shock import reliant countries. As the manufacturing sectors taking a hit, these countries will find that it is harder and more expensive to acquire necessary import material, including necessities such a food and other industrial raw materials inputs. Of course, the country that is directly hit by the virus will suffer more backdrops since the virus affects people the countries labor force is paralyzed so that the manufacturing businesses. On top of that, another company is in an indefinite shutdown.
In other words, a total economic catastrophe.The record in February 2020 has shown that China's key index of factory activity, the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI), reflects that it is the lowest record in China's history.
Their supply and demand are weakened, and their supply chain is stagnant. If that was not bad news, the real blow that seals the deal is China is heavily relying on their international trade. They are one of the primary providers of goods around the world. Though this giant suffers from this health crisis, so do the developing countries.
The Economist warned that the pandemic could have a crippling effect on the developing countries. As the disaster unfolds, some argue that developing a new trading policy will at least ease some part of the problem, namely international trading. Based on the database of COVID-19 trade flows and policies, if the countries around the world have an uncooperative trading policy and it will lead to a shortage of critical medical supplies, and it will profoundly affect the vulnerable countries with its high price and difficulty of transport. These essential supplies are consist of items for diagnosis and treatment processes, liquid soap, alcohol and other hygiene products, personal protective equipment such as gloves, masks, and other medical products and equivalents.
Key take aways
International trade is one of the critical components for economic growth and provides tons of opportunities all across the world. However, in times like this economy only fell into the second important thing, and the most important is global health. Workforce, product, services, and capital are in stasis, providing a significant collapse in the economy that will ripple down in the whole world, and it is inevitable. These backdrops will eventually feel and will force every country to act in necessary action, and the only question is how everyone will react? Conceivably the major economic powers will eventually recover from their losses, and the developing countries will leave suffer heavily in this casualty. However, as the expert predicted, it will be avoided if the countries all over the world will cooperate in fighting the epidemic and the economic crisis. The sustainable and harmonious relationship of each country brought by the International trade was now affected due to the COVID-19. The travel ban was lifted as well as import and export were prohibited. A lot of changes and people are afflicted physically and emotionally. Therefore, significant cooperation, information transparency, and more of humanity are in need during this crisis. Surely the economy will indefinitely shutdown, and significant losses will be incurred, but the health and safety of the people are more critical of all.
This crisis is the best time that all of the countries will unite and fight this virus toe to toe and eventually heal the economic backdrop we face.
No more today.
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