ABSTRACT

The study investigates Covid-19 and its impact on international trade. The questions one must ask with regards to this study are; what are covid-19 and the concept of international trade? What is the regulatory framework for international trade? What are the effects of covid-19 on international trade? What policy recommendations can be proposed to improve international trade amid the covid-19 pandemic? The research is supported by the public Interest theory of regulation; Private Theory Interest of Regulation; theory of comparative advantage; the Health Belief Model(HBM). We adopted the qualitative research methodology with the use of doctrinal method where information was collected via primary and secondary sources. The findings revealed that Covid-19 is a respiratory disease that started in the province of Wubei in China.As a disease, it mostly affects the respiratory system and it produces more complications to the elderly and with individuals who are vulnerable with existing health conditions. The findings further reveal that the pandemic has had a significant economic effect in African countries, threatening to erode the continent’s rising middle class and raise poverty and severe poverty rates. We also found that, the WHO stipulated some measures. Which include; Wearing a mask properly, constant washing of hands, Keeping physical distance of atleast 1 metre from others, self-isolation when there are symptoms, Covering your mouth and nose with a bent elbow or tissue when you cough or sneeze and Getting Vaccinated and others. According to the findings, there exists International and National regulatory framework on international trade. According to the findings, the pandemic has produced far reaching impact in the world in almost all domains –social, political and economic perspectives. The economic effects of covid-19 on international trade include: Increase in the Trade costs, Travel Limitations, Decrease in Trade in services, Decrease in Distribution Services, Decreases in the scale of production. The resultant policy implications from the findings were categorized based on the objectives of the study. From these implications, important policy recommendations which include; Diversification of Exports, Initiation of strong and adaptable policies, strengthening the resilience of the retail industry, Encouraging alternative sourcing.

CHAPTER 1
GENERAL INTRODUCTION

1.1 BACKGROUND TO THE STUDY

The COVID-19 pandemic, which emerged in early 2020, wrought unprecedented havoc upon the global economy. It instigated profound disruptions in both supply and demand, severely affecting international trade in our interconnected world. The pandemic’s effects manifested in plummeting commodity prices, reduced manufacturing output, and disarray in global value chains (GVCs). Various multilateral institutions have offered estimates of the pandemic’s financial toll, but its impact has not been uniform, varying across countries and regions.

While numerous academic works have explored the macroeconomic repercussions of COVID-19 across different countries and sectors, a comprehensive understanding of how it has specifically impacted trade across regions and product categories remains lacking.

The World Health Organization (WHO) declared the coronavirus outbreak a “public health emergency of international concern” on January 30, 2020. This declaration came when there were 7,736 confirmed cases in the People’s Republic of China (PRC) and 83 confirmed cases in 18 economies outside the PRC. The disease caused by the virus was officially named COVID-19 on February 11, 2020.

This introductory chapter establishes the basis for the study, delineating the research problems, research questions, objectives, and methodology. It explores existing literature concerning the impact of COVID-19 on international trade, delves into the theoretical framework, and underscores the significance of the subject. Furthermore, the chapter outlines the scope of the study, addresses its limitations, defines key terms, and provides a synopsis of the subsequent chapters.

Contagious diseases have plagued humanity throughout history, with notable outbreaks including the Spanish Influenza of 1918, the Asian flu of 1957, the Hong Kong flu of 1968, as well as more recent epidemics such as SARS, bird flu, MERS, and Ebola in the early 2000s. However, COVID-19 stands as the most impactful and far-reaching pandemic of the 21st century, affecting societies socially, health-wise, and economically.

COVID-19, caused by the SARS-CoV-2 virus, predominantly results in mild to moderate respiratory illness, but severe cases necessitate medical attention. The elderly and individuals with underlying health conditions are at greater risk. Symptoms of COVID-19 encompass fever, cough, headache, fatigue, breathing difficulties, loss of smell, and loss of taste, with some cases being asymptomatic.

Preventative measures recommended by the World Health Organization (WHO) include maintaining a distance of at least one meter from others, wearing well-fitted masks, and frequent handwashing with soap and using alcohol-based hand sanitizer to mitigate transmission.

The economic repercussions of COVID-19 have been staggering and unparalleled compared to previous outbreaks. The pandemic has disrupted both the supply and demand sides of the global economy, thus impacting international trade in goods and services.

International trade has been a significant driver of economic development in many advanced economies. In 2019, exports contributed to nearly 36% of China’s GDP and 26% of the United States’ GDP, according to the World Bank. Global trade has seen substantial growth since the 1950s, with a threefold increase from 1980 to 2002. However, the COVID-19 pandemic has adversely affected the pace of world trade, leading to significant export declines in major economies. For example, China faced a dip of $48 billion in exports in February 2020, but it swiftly rebounded, with exports increasing by $40 billion in July 2020. Conversely, the United States has struggled to recover fully, with exports declining by $20 billion in July 2020 compared to the previous year.

The pandemic has also disrupted trade networks and volumes traded among countries, with far-reaching consequences for global trade.

COVID-19 has reignited the debate over comparative advantage versus resilience in international trade. Comparative advantage suggests that trade is beneficial when countries specialize in goods in which they have a comparative advantage. However, this theory faces challenges when global supply chains are disrupted, particularly for countries heavily reliant on them.

Transportation costs, often assumed as given in standard trade theories, have now become a subject of debate due to the pandemic’s disruptions. COVID-19 has altered the implications of transportation costs for global trade.

Similar to the Great Depression of the 1930s and the Global Financial Crisis of 2008, COVID-19 has emerged as a severe global economic pandemic. It has led to decelerating trade, deteriorating economic growth, growing global imbalances, financial market turmoil, and disruptions to monetary systems. The World Bank predicts a significant reduction in global GDP in 2022 and 2023.

The capacity of container shipments has also decreased due to the reduction in international trade caused by the pandemic. Before COVID-19, international trade relied heavily on Global Production Networks (GPN), benefiting many developing countries in promoting their industrial sectors. However, the pandemic disrupted this system. It is evident that international service sectors such as tourism, passenger air travel, and container shipping have been particularly affected.