Impact of pandemics like COVID-19 on global trade

Pandemics such as COVID-19 have both benefits and drawbacks when it comes to global trade.
Global trade is the process of exchanging goods, services, skills and aid between countries.

Exchange in goods on a global level has mostly reduced due to the increase in border crossing
restrictions, luxury items have suffered in trade during the pandemic as their trade did not impact the
health of consumers hence, they were deemed unimportant. However, trade of medical goods such as
masks, ventilators, vaccines, surgical equipment, oxygen cylinders etc, has massively increased during
the pandemic to control the spread.

Moreover, global trade in services has had a roller coaster journey through the pandemic at first
services like banking, government-services, telecommunication, transport, tourism all took a hit. But
soon services like: government, information, telecommunication, banking services quickly adapted to
the online environment and began to thrive as they were able to conduct business with other countries
sitting in their homes without needing to spend on airline costs, fuel etc. However, tourism has declined
massively, the report, jointly presented with the UN World Tourism Organization (UNWTO) says,
“international tourism and its closely linked sectors suffered an estimated loss of $2.4 trillion in 2020!” This is
due to the travelling restrictions placed by governments all around the world due to the pandemic.

Furthermore, trade of skills between countries had completely stopped at first but in the matter of a few
months, most sectors were able to adapt to online ways of communicating their skills. For example,
universities conducted seminars via zoom which connected people from many countries sitting in their homes,
something like this was never considered before; People who had strict routines were able to take meetings
and classes online easily so the trade in skills increased. Many teachers also began using websites like preply,
studypool to share their knowledge with students and also earn by doing so.

Lastly, exchange in aid between countries experienced a spike during the pandemic, in real terms it
increased by about 3.5% compared to 2019(accounted for inflation). The richer countries helped the third
world countries which were suffering drastically during the pandemic, this helped minimize the disparity
between rich and poorer countries.

Therefore, the pandemic has had both a positive and negative impact on global trade.

Resources:
UNTCAD. 30 june 2021. Global economy could lose over $4 trillion due to COVID-19 impact on tourism.
https://unctad.org/news/global-economy-could-lose-over-4-trillion-due-covid-19-impact-tourism