The COVID-19 proved to alter the global economy in recession. It has affected all segments of economy mostly due to lockdown in majority countries of the world aimed to slowdown the spread of the virus. According UNCTAD data a sudden decline in international trade was seen after the outbreak of the pandemic. In 2020, the global trade fallen by about 20%as compare to 2019 statistics. Likewise, according to the statistics of The Organisation for Economic Co-operation and Development (OECD) the crisis caused by COVID-19 led to 13% drop in global Gross Domestic Product. The outbreak of COVID-19 had badly affected the international trade while it is very necessary to save both livelihoods and lives of human being in the current globalised world.
Global trade was one of the main victims of COVID-19 soon after its outbreak. It had both short-term and long-term impact on international trade. This epidemic had led to a huge interruption in international trade, affected badly both demands and supplies across the world. For smooth international trade flow, the international cooperation is always needed in order to keep the trade relations smooth running, but the coronavirus has limited the international cooperation which largely decreased inter-state trade relations. It had caused a sharp decline in the volume of exports of world’s largest exporting countries like China and United States. With the exception of a few critical products, most countries in the world have closed down production units or downsized production due to the interruption in their supply-chains.
Likewise, global financial transactions and services have been severely weakened and considerably declined by the pandemic, which in turn has affected global trade. While COCID-19 Pandemic has had a negative impact on most business activities, it has also created good opportunities for some businesses. According to the World Economic Forum data the pandemic was not bad news for some businesses, but rather proved to be good news. For instance, Brazil had seen an increase in its exports of frozen-beef and soybean. The frozen-beef export volume increased from 464 million dollars in April 2020 to 639 million dollars in the month of May 2020. Likewise, the soybean export increased 1 billion dollars in a year-on-year basis in April 2020.
The COCID-19 had affected the international trade through different ways and means. Especially, the lockdown had significantly affected the production and transportation processes of factories by limiting the availability of labour to do works in factories, load and unload ships at seaports, and increased the expenses due to enhanced protection methods for laborers and lack of transportation to reach the workplaces. It had affected productions as well as exports and imports. Important seaports of the world noted decrease in cargo upto 20%. Almost on all ports across the world some special protocol, anti-virus measures and many additional documents were required, which also slowdown the movements of goods and services. Cancellation of flights due to travel-bans and safety measures had also restricted the availability of air-cargos, while the demand of important shipments of many critical commodities had increased. This in turn resulted in raises in the price of air-cargos. Broadly speaking, the supply chains of exports and imports were affected by the requirements to safeguard health and contain the spread of coronavirus. An essential priority in this regard was to keep smooth the major supply and chains for important goods and services. It was failed at the beginning but later on restored.
All these things caused by the COVID-19 increased the costs and time of international trade therefore it was negatively affected by the outbreak of coronavirus in the world.