Long before the arrival of Covid-19, international trade was shaken by the United States’ protectionist war against China, which even reached traditional allies such as Canada and Europe.
According to the World Trade Organisation (WTO), between the middle of October 2018 and 2019, 102 restrictive measures were applied to trades with values greater than $746,900 million, arrangements driven by protectionism from the US government of Donald Trump.
For its part, the Economic Commission for Latin America and the Caribbean (ECLAC), pointed out that the amount of business – equivalent to the US protectionist measures – from May to December 2019 went from $728,000 to $1.29 million. The Covid-19 pandemic arrived in this complex context which, by the closing of this edition, has caused the deaths of more than 830,000 people and amassed nearly 25 million patients. Faced with this situation, in conjunction with the restrictive measures to contain the pandemic, global trade worsened.
In April of this year, the WTO had already said that the international exchange would collapse as a result of the disturbances on the global economy from the pandemic.
In fact, figures from this forecast indicated a reduction between 13% and 32% due to uncertainties surrounding the exact economic repercussions that the pandemic would have. According to predictions by the WTO, these affectations could exceed records from the global crisis of 2008-2009.
The truth is that improvements are not yet in sight for international trade, despite the organisation’s encouraging predictions in October.
According to the WTO, the volume of goods exchanges fell by 9.2%, a figure lower than the 13% predicted in April.
However, they are uncertain estimates, as they depend on the evolution of the pandemic and the response from Governments.
Nevertheless, the WTO estimates that in 2021, the volume of trade will increase by 7.2% and, although the figure is better, it is far below the trends before the crisis.
For Latin America and the Caribbean, the situation is more complicated. In August, ECLAC envisaged that international trade in the region would fall by 23%, a figure higher than that recorded during the financial crisis of 2009 when it fell by 21%.
According to ECLAC, Latin America and the Caribbean is the developing region most affected by the pandemic, and the evolution will be marked by setbacks in shipping of manufactured goods, mining and fuel products.
Combined with this, it anticipated a drop of 50% in tourism, which will affect service exports, especially for the Caribbean. Intraregional trade will suffer a severe restriction of 23.9%.
The global trade outlook suggests that the prospects for improvement are subject to the behaviour of the pandemic, the source of the interruption of productive work and general border closures, which increased unemployment with the subsequent reduction in demand for goods and services. (PL)