The Pandemic Continues to Have an Impact on Global Trade in Services, With a Significant Difference Among Regions and Sectors

1.  Key Concerns

Recently, the WTO published the World Trade Statistical Review 2021, which presented the latest trend in world trade and made a systematic analysis about the impact of COVID-19 on this issue. The Review noted that the COVID-19 pandemic led to global merchandise trade declining by 8 per cent and trade in commercial services contracting by 21 per cent year-on-year in 2020. Although the world trade has started to recover since Q2, 2020, there are significant differences among regions and sectors.

In terms of merchandise trade, all regions recorded declines in 2020. A decline of only 0.5 per cent in Asia in 2020, which was the lowest drop, was due to COVID-19 having an earlier impact than in other regions, together with Asia’s rigorous management of the crisis. With respect to sectors, fuels and mining products declined by 23.9 per cent in 2020, due to a fall in demand; trade in medical goods increased significantly in 2020, with trade in personal protective products increased by 47.2 per cent; exports of agricultural products increased by 0.9 per cent in 2020 as many countries depended on food exports during the COVID-19 crisis.

In terms of commercial services, restrictive measures taken by countries (regions) brought a big hit to this sector in 2020. Unlike the slow recovery of merchandise trade, trade in services is still heavily affected by COVID-19. However, computer services and financial services continued to grow. Computer services, the fastest growing services sector over the past 10 years, grew by 8 per cent in 2020, boosted by a shift towards remote working and increased online digitalization.

The WTO also noted that despite the growth in merchandise trade, world trade has been still clouded by COVID-19. It is important to keep an eye on regional and sectoral differences caused by COVID-19 to mitigate the impact of the pandemic on world trade.

2. Briefing on COVID-19 Pandemic

According to WHO statistics, calculated numbers of confirmed COVID-19 cases and deaths reached 211,730,035 and 4,430,697 by August 23, 2021. The U.S., Iran, India, the U.K. and Brazil were the five countries (regions) with the highest number of new confirmed cases in the past seven days. Indonesia, the U.S., Russia, Brazil, and Mexico were the five countries (regions) with the highest number of new deaths in the past seven days. 

Developed countries will continue to provide COVID-19 booster vaccines for people, which makes the WHO worry about growing inequality in vaccine distribution. Statistics from Our World In Data, an online research site of the University of Oxford, presented that 4,999,169,117 doses had been administered by August 23, 2021. On August 23, Tedros Adhanom, Director-General of WHO, noted that related countries (regions) should delay the COVID-19 booster vaccination plan to increase COVID-19 vaccination coverage globally by ensuring priority vaccine delivery in poor countries with only 1% to 2% vaccination coverage.

3.COVID-19 restrictive measures

In terms of COVID-19 controlling measures taken by countries (regions), this issue focuses on Asian countries. With the decline in new confirmed cases of COVID-19 and improved vaccination rates, the Indonesian government will recently reopen restaurants, shopping malls and places of worship in some areas, including the capital city; since the announcement of the proposed long-term coexistence with the COVID-19 on August 6, 2021, Singapore has decided to relax its entry restrictions in an orderly manner, and on August 19, 2021, Singapore approved travelers from Hong Kong and Macau, China, to enter the country without quarantine if they test negative for COVID-19. The situation of the pandemic in Japan is not optimistic. The large-scale spread of DELTA variant has forced the Japanese government to repeatedly extend the state of emergency in the country, and the upcoming Tokyo Paralympic Games may bring more severe challenges to the epidemic prevention situation in Japan.