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Info Service on WTO and Trade Issues (May20/18) Geneva, 13 May (Kanaga Raja) – Global trade values fell by 3 per cent in the first quarter of this year due to the COVID-19 pandemic, a joint report by 36 international organizations has said. According to the report by the Committee for the Coordination of Statistical Activities (CCSA), coordinated by the UN Conference on Trade and Development (UNCTAD), most of the impact of the measures taken to contain the COVID-19 pandemic will however affect global trade in the second quarter of the year, with an estimated quarter-on-quarter decline of 26.9 per cent. The report also found that the drop in global trade has been accompanied by marked decreases in commodity prices, which have fallen precipitously since December last year. Since December 2019, commodity prices have been falling at an accelerated rate, it said. According to the joint report, UNCTAD’s Free Market Commodity Price Index (FMCPI), which measures the price movements of primary commodities exported by developing economies, lost 1.2 per cent of its value in January, 8.5 per cent in February and 20.4 per cent in March. Fuels were the main driver behind this development, recording a price fall of 33.2 per cent in March, while minerals, ores and metals, food and agricultural raw materials saw prices decreasing by less than 4 per cent. The fall of more than 20 per cent in one month is unique in the history of the FMCPI, said the report. From July to December 2008, after the outbreak of the global financial crisis, the maximum month-on-month decrease was 18.6 per cent. At that time, the descent lasted six months. The duration and overall strength of the current downward trend in commodity prices and global trade is yet uncertain, the report noted. “Everywhere governments are pressed to make post-COVID-19 recovery decisions with long-lasting consequences,” said UNCTAD Secretary-General Dr Mukhisa Kituyi. “Those decisions should be informed by the best available information and data. I’m proud that UNCTAD has played a central role in bringing so many international organizations together to compile valuable facts and figures to support the response to the pandemic,” he added. THE COVID-19 PANDEMIC According to the joint report, by 30 April 2020, 212 countries, territories and areas had reported COVID-19 cases and 174 had reported at least one death from COVID-19. In total, there are 3,059,642 cases of infection and 211,028 deaths reported. COVID-19 has spread to all continents except Antarctica, and fewer than 30 countries, territories or areas (mostly in the Pacific islands) have reported no COVID-19 cases. Up to 30 April 2020, Europe had the most cases of confirmed infection at 1,406,899, followed by the Americas at 1,246,190, Eastern Mediterranean at 181,119, Western Pacific at 147,743 and South-East Asia at 52,266, while Africa had only 24,713 reported cases. Confirmed cases have exceeded 100,000 in seven countries; the United States had the most at 1,003,974, followed by Spain at 210,773, Italy at 201,505, the United Kingdom at 161,149, Germany at 157,641, France at 125,464, and Turkey at 114,653. Among the top 10 countries with the most COVID-19 infections, France reported the highest fatality rate at 18.8 deaths per one hundred infections, followed by Italy at 13.6, the United Kingdom at 13.5, Spain at 11.3, Iran at 6.4, China at 5.5, the United States at 5.0, Germany at 3.9, Turkey at 2.6 and Russia at 1.0. SOME MAIN FINDINGS According to the joint report, the prospects of aviation worldwide have taken a dramatic turn for the worse with rapid and drastic declines in air travel demand amplified by stringent travel restrictions. With around 90% of fleet being grounded and travel demand hitting nearly zero, the traffic reduction has far exceeded the level observed in events such as SARS and terror attacks of 11 September 2001, putting the aviation industry under extreme strain. The International Civil Aviation Organization (ICAO)’s economic impact analysis of COVID-19 on aviation indicates that in the month of March when the pandemic was declared on 11 March, 38% of seats capacity were cut globally compared to the same period of 2019. Passenger numbers plunged by 54% or 198 million, due to dampened load factor. Asia/Pacific recorded the biggest fall in passenger numbers by 85 million, followed by Europe and North America, by 50 and 35 million, respectively. Air cargo traffic dropped by 19% in March, offsetting by the recent increasing demand of cargo freighters in transporting medical supplies. The slump in air traffic has further caused severe financial pressure on all stakeholders in the aviation sector. Only in March, airlines are estimated to lose USD 28 billion in revenues, and airports and air navigation service providers have lost around USD 8 billion and USD 824 million, respectively. According to the report, the halt in activity due to the COVID-19 pandemic also had an immediate and sweeping impact on employment. In response to the exponential rise in COVID-19 infections, many countries across regions are implementing lockdowns, travel restrictions, social distancing policies, and workplace and school closures. These necessary measures aim to slow the spread of the virus, minimize lives lost and avoid catastrophic outcomes for national health systems, but they also have a sudden and drastic impact on workers and enterprises. According to the report, by the beginning of April, 81 per cent of the global workforce lived in countries with mandatory or recommended workplace closures. By 22 April, their share had decreased to 68 per cent, mainly driven by the lifting of workplace closures in China. However, the situation has worsened elsewhere. The total amount of hours worked by workers around the world could drop by around 10.5 per cent in the current quarter, equivalent to 305 million full-time workers with a 48-hour work week, said the report. It is the worst global crisis since the Second World War. Indeed, the drop in hours worked already outpaces that of the 2008-2009 financial crisis, it added. Worryingly, COVID-19 is now also impacting the developing world, where capacities and resources are severely constrained. Among the other findings in the report are that trade in medical products which have been described as critical and in severe shortage during the COVID-19 crisis totaled about US$597 billion in 2019, accounting for 1.7% of total world merchandise trade. The report also said that throughout 2019, world manufacturing was already experiencing a consistent decline in production growth. Especially industrialized countries registered a noticeable contraction of production. China still showed high quarterly growth rates of more than 5 per cent at the end of the year. For the first two months of 2020, China showed a sharp reduction of output, which can be explained by the celebrations of the Chinese New Year at the end of January 2020 as well as the beginning of the lockdown of Wuhan and other regions to contain the virus at the same time. It remains to be seen, how fast China will catch up the losses made during the first quarter of 2020, said the report. For industrialized countries, aggregated to the country groups North America, Europe and East Asia, direct impacts of COVID-19 cannot be measured with the latest data of February 2019 as most of the countries started the economic restrictions in March, it added. Nevertheless, these countries started the year 2020 with further decreases of manufacturing production which will be reinforced by largely COVID-19 measures made by the countries so far. According to the report, tourism is also facing an unprecedented challenge. After increasing almost uninterruptedly and more than doubling since 2000, the UN World Tourism Organization expects international arrivals to decrease by 60 to 80 percent in 2020 with respect to 2019, depending on when travel restrictions are lifted. Available data show that arrivals in the month of March dropped by 60 percent with respect to the same month in 2019. Countries with the highest number of reported cases account for about 55 and 68 percent of global inbound and outbound tourism expenditure, respectively. The report also said that in mid-February 2020, 300 million learners were affected by nationwide closures of schools and universities. Two months later, this number has grown to nearly 1.6 billion students in 192 countries, representing 90% of the global student population. In addition, 140 million students live in countries with localized school closures. Globally, the nationwide closures affect approximately 155 million children in pre-primary education, 691 million primary school pupils, 537 million secondary school pupils, and 191 million students in tertiary education. Central and Southern Asia is home to 30% of the 1.6 billion students whose schools have been closed. 28% of these students live in Eastern and South-Eastern Asia, 16% in sub-Saharan Africa, 11% in Latin America and the Caribbean, and 8% each in Europe and Northern America and in Northern Africa and Western Asia. The report further said that nearly three quarters of the population in sub-Saharan Africa lack basic handwashing facilities at home, a fundamental mechanism to prevent COVID-19, leaving the already vulnerable people at further disadvantage. As many as 3 billion people lack handwashing facilities with soap and water available: 1.6 billion have facilities lacking soap or water, and 1.4 billion have no facilities at all. In short, for many people, the most basic and effective method of preventing the spread of COVID-19 is out of reach, said the report.
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