UNIVERSITI TEKNOLOGI MARA (UiTM) CAWANGAN MELAKA
KAMPUS BANDARAYA MELAKA
SESI 2021/2022
INTERNATIONAL TRADE FRAMEWORK
(IBM554)
INDIVIDUAL ASSIGNMENT 3: CASE STUDY REPORT
COVID AFFECTING INTERNATIONAL TRADE
PREPARED BY:
NAME
STUDENT ID
ANDRIEYANY NURNABIHA NATASHA BINTI AMZAN
2021114455
MUHAMMAD AFIQ SHAKIR BIN ABDUL SHUKOR
2021125521
MUHAMMAD SYAHERU FIKRY MUNIR BIN KUSNAN
2021100109
NIK NUR ARESSA BINTI NIK HEZRIN
2021112325
NUR AQILAH BINTI AHMAD PEIRUZ
2021118397
SAIDATUL IFFAH BINTI SAIUN
2021554517
GROUP: BA2463D
PREPARED FOR MADAM NURUL AZRIN BINTI ARIFFIN
TABLE OF CONTENTS
CONTENT
1.0 Introduction
PAGE
3
2.0 Content

2.1 What: Article Review “The 2020 trade impact of the
4–6
Covid-19 pandemic”

2.2 When: When will global trade be able to fully recover
7–9
from the Covid-19 pandemic?

2.3 Why: Why has international trade deteriorated,
10
particularly since the Covid-19 pandemic?

2.4 How: How to recover global trade after the Covid-19
11 – 13
pandemic?
3.0 Conclusion
14
4.0 References
15
5.0 Appendix
2
1.0
Introduction
The globe was surprised in 2019 by a new discovery of the Coronavirus (Covid-
19). It is a potentially fatal illness, where it was discovered in the Chinese city of Wuhan.
This condition manifests itself via symptoms such as fever, fatigue, sore throat and aches.
It has spawned a new global phenomenon, where it affects people's livelihoods.
Additionally, it has interrupted economic activity on a global scale.
The purpose of this research was to determine the impact of Covid-19 on foreign
commerce and how those impacts evolved over time. We analyzed statistics on global
commerce in 2019 and 2020. This phase encompasses the time after the first wave.
Although determining the end date of the first wave in each nation is difficult, the majority
of countries had their initial surge of confirmed cases around April 2020. It has an
influence on international commerce. Covid-19 showed itself in exporting nations by a
decrease in manufacturing size and export supply. Exports are likely to decline, especially
in sectors and regions where remote operations are impractical. In an importing nation,
the impact’s harm is mostly attributable to a fall in aggregate demand. Reduced incomes
and visits to retail establishments resulted in a decrease in demand.
People anticipated that Covid-19's detrimental impact on foreign commerce would
diminish soon enough. The majority of the world's population, particularly the present
generation, has never seen equal levels of limitations or lockdown orders. They had no
idea how to "behave" in the pandemic environment at the start of the first wave. As a
result, several governments adopted a solution by ordering citizens to remain home and
shutting enterprises. Through that, people gained information and began implementing
infection control methods. As our knowledge of the pandemic increases, we may assume
that the negative effects of Covid-19 will reduce with time.
3
2.0
Content
2.1
Article Review “The 2020 trade impact of the Covid-19 pandemic”
Based on the article “The 2020 trade impact of the Covid-19 pandemic” by
Xuepeng Liu, Emanuel Ornelas, and Huimin Shi from was updated on 9 June 2021.
Voxeu is a research-based policy analysis and commentary from leading economists from
alternatives to global issues, set benchmarks, exchange knowledge and recommend
improvements to promote better policies for better living standards. This article can see
there are several dimensions to the pandemic that are likely to affect international trade:
its direct health impact and associated behavioral changes; the consequences of
governments’ actions to prevent the spread of the virus; and the impact of the pandemic
in third countries.
As Baldwin (2020) called attention to at its beginning, the pandemic conveyed a
shock from both the organic market sides. Since both are negative, the subsequent effect
on a nation's import interest - characterized as the distinction between its homegrown
interest and homegrown stock - is deduced to be questionable. In another paper (Liu et
al. 2021), we settle these ambiguities and give what we accept are the primary
evaluations of what every one of these channels meant for global exchange streams
2020, saw through their effect on imports from China. In particular, we gauge how Covid19 rate and lockdown limitations, inside a nation and on its exchange accomplices,
impacted the month-to-month year-over-year development of imports from China for all
objections to which China traded in 2019-2020, at the item (HS 6-digit) level. China
experienced the most Covid-19 in the primary quarter of 2020, when the remainder of the
world was simply beginning to encounter the results of the infection. From the second
quarter onwards, which is the point at which our factors of interest begin to differ all the
more altogether, the circumstance turned around, and China's economy recuperated
quickly, becoming 2.3% in 2020.
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The first step to perceive either the economy affected or not is the normal
exchange impacts of the pandemic. the immediate impacts of Covid-19 frequency
(communicated by the quantity of passing per capita) and of Coronavirus instigated
government measures (communicated by a record of the toughness of lockdowns)1 are
obviously bad, demonstrating that the negative own-request impact on nations' imports
from China beats the negative own-supply impact. Comparatively with pre-pandemic
conditions, a country with the most significant level of passing per thousand individuals in
a month in our example (Slovenia in December 2020) would encounter a decrease of
13% in imports from China for that month. Likewise, moving from no lockdowns to the
greatest degree of lockdown rigidity in the example (Honduras in April and May; the
Philippines in April) would create a decrease of 17.6% in imports from China. This
uncovers that administration measures to check monetary exercises will generally largely
affect a nation's imports than the immediate wellbeing and social effects of the pandemic.
Assuming that we consider an increment of one standard deviation in every one of these
factors, the decrease in imports would be, separately, 1.5 and 4.2%. Assembling this all,
moving every one of the three factors from nothing (as in 2019) to their 2020 normal would
suggest a decrease of almost 10% of imports from China.
Next, the trade effects of the pandemic vary across several dimensions. The
rundown is the negative exchange impacts of the pandemic evaporate when we limit the
example to 'clinical merchandise', featuring the peculiar powerful they followed during the
pandemic. Furthermore, a more vulnerable impact is additionally present for merchandise
with a high 'contract force' - for which long haul connections are more significant - and for
products sent out under 'handling exchange'. Thirdly, the adverse consequences are
more articulated for 'strong utilization products', however are more vulnerable for 'capital
merchandise', for which long haul arranging infers an alternate response to the transitory
shock because of the pandemic. In 'OECD individuals', the effect of lockdown severity
inverts, showing that it actuated a more modest decrease in homegrown interest than in
homegrown stockpile. The impacts were focused on the 'concentrated edge'. This
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example mirrors what has been found for the "extraordinary exchange breakdown" that
followed the Global Crisis of 2008 (e.g., Behrens et al. 2013, Bricongne et al. 2012).
The Covid-19 pandemic has spurred a torrent of research on its various
consequences and trade is no exception (see Liu et al. 2021 for a discussion of the main
studies). A typical finding is that the pandemic has adversely impacted global exchange
streams, albeit the subtleties of the outcomes fluctuate essentially across concentrates
because of contrasts in the exact methodology, including the degree of total, the kinds of
products examined, and the information inclusion. A significant differentiation between
our examination and the current exact writing is that we consider both Covid-19 passing
cases and lockdown strategies, while most existing exploration centers around either.
While the Covid-19 passing measure is an instinctive intermediary for the effect of the
pandemic, lockdowns (of different levels of rigidity) are carried out as a response to the
pandemic, frequently precisely when the quantity of passes is high or expected to rise
soon. Subsequently, concentrating on one or the other variable in segregation can prompt
deluding results.
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2.2
When will global trade be able to fully recover from the Covid-19 pandemic?
We as a whole have been impacted by the current Coronavirus pandemic. Be that
as it may, the effect of the pandemic and its outcomes are felt diversely relying upon our
status as people and as citizenry. While some attempt to adjust to working web based,
self-teaching their kids and requesting food, others must choose the option to be
presented to the infection while keeping society working. Our distinctive social characters
and the gatherings we have a place with decide our incorporation inside society and
likewise, our weakness to scourges.
In the 20th century, global trade will be able to fully recover from the Covid-19
pandemic when the workers, firms and governments learn how to deal with and adapt to
it (Liu, Ornelas, & Shi, 2021). As we can see now, there are some firms that direct and
instruct their employees to work from home. Thus, the office has no longer been the only
workplace since many people are considering working from home. Working from home is
a lot more comfortable for lots of people. Employees can save a great deal of time and
money since they do not have to travel so often, which means people will have more time
for work and for themselves, too. Less traveling will also help reduce traffic congestion
and environmental pollution. Besides, working at home does not mean staying inside all
day long, people can choose to work in their garden or backyard, wherever makes them
feel convenient to work. Moreover, employees are under less with a flexible working
schedule. For example, firms need to make sure their workers who have returned from
an area where Covid-19 is spreading should monitor themselves from symptoms for 14
days and take their temperature twice a day. This is what the firms need to do in order to
deal with this pandemic. So, this can be one of the reasons to make global trade be able
to fully recover from the Covid-19 pandemic.
Next, as vaccinations start to allow societies to return to their pre-pandemic modes
will help global trade to fully recover from the Covid-19 pandemic (Liu, Ornelas, & Shi,
7
2021). The pandemic has affected pretty much every edge of life, making worldwide
economies slow down, changing the manner in which we work and connect with our
friends and family, and extending medical care frameworks as far as possible. State run
administrations all over the planet have been compelled to execute brutal limitations on
human action to control the spread of the infection. In addition, Coronavirus inoculation
is currently offering a method for progressing out of this period of the pandemic. Without
them, numerous researchers accept that regular group invulnerability would not have
been adequate to re-establish society to its ordinary business as usual and that it would
have brought about outrageous casualty. This is the kind of thing that has been
reverberated by numerous wellbeing associations including the WHO (Moore, 2021). In
a situation without admittance to immunizations, severe conduct measures might have
needed to stay for a long time to come (Moore, 2021). Other than that, vaccine is a tiny
weakened non-dangerous fragment of the organism and includes parts of the antigen. It
is enough that our body can learn to build the specific antibody. This is particularly
significant for those individuals who cannot be immunized and might be more defenseless
to the sicknesses we inoculate against. No single immunization gives 100 percent
security, and group invulnerability does not give full assurance to the individuals who
cannot securely be inoculated. Yet, with group resistance, these individuals will have
considerable assurance, because of people around them being inoculated. Immunizing
secures yourself, yet additionally ensures those locally who cannot be inoculated.
Assuming you can, get immunized. For instance, when somebody is inoculated, they are
probably going to be ensured against the designated sickness. Yet, not every person can
be inoculated. Individuals with hidden ailments that debilitate their safe frameworks (like
disease or HIV) or who have serious aversions to a few immunization parts will be unable
to get inoculated with specific antibodies. These individuals can in any case be ensured
assuming they live in and among other people who are inoculated. At the point when
many individuals locally are immunized the microorganism struggles flowing on the
grounds that a large portion of individuals it experiences are resistant. So the more that
others are immunized, the more uncertain individuals who can't be ensured by
immunizations are in danger of being presented to the destructive microbes. So, when all
8
the societies get their vaccines, it will help the global trade be able to fully recover from
Covid-19 pandemic.
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2.3
Why has international trade deteriorated, particularly since the Covid-19
pandemic?
Naturally, the Covid-19 pandemic has sparked much research into its numerous
repercussions, including trade. The outbreak has had a damaging impact on international
exports and imports and the crisis has different aspects that are influential in affecting
international trade, including its severe health impact and lifestyle patterns, the results of
governments' measures to stop the virus from spreading, as well as the epidemic's impact
in third nations like Bangladesh and Vanuatu, for instance. The 'intense margin' was the
focus of the effects and this trend is similar to what was discovered from the "great trade
collapse" that occurred after the Global Financial Crisis of 2008. (Behrens et al. 2013,
Bricongne et al. 2012).
Covid-19 has harmed worldwide export and import significantly. People will buy
less while economies around the world are in recession, resulting in fewer cargos. Due
to lower energy prices as a result of the recession, ships would be able to travel faster.
However, with less load available, they are unlikely to do so and they may even slow
down. Aside from that, processes at each port will be more complex meaning that health
checks for the crew and container disinfection are unlikely to be required. As a result of
the global economic slump, the contents of containers might need to be decontaminated
at their end destination, as well as charter rates for liquid and dry bulk cargo may plummet.
Although it may seem reasonable to assume impact on the trade consequences as a
result of the virus, the effect might go either way at the country level. The epidemic offered
a wave shock from both the supply and demand sides, as Baldwin (2020) pointed out at
the outset. However, the impact of an epidemic on a nation's other trade relations, as well
as on its own demand for imports from a particular nation, is unpredictable, depending on
how third-country demand and supply factors are affected.
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2.4
How to recover global trade after the Covid-19 pandemic?
Since the Covid-19 virus has been finally under control all around the world,
particularly in the event that there is a dependable and broadly accessible vaccine, life
should return being "normal” back. However, it is impossible for us to be just like before
as it is likely to be a new normal. It is hard to predict specifically but for sure, there will be
some permanent changes in the structure of demand. Individuals in cutting edge
economies might accomplish additional work from home forever, decreasing interest for
vehicles and fuel. Not only that, but we also might have less interest for office and retail
space. Those progressions would will generally come down on item costs a trade volume.
Three enterprises with broad worth chains including non-industrial nations are cars,
hardware, and clothing. Based on the Brookings, in this post-pandemic world, people
would be more interest for gadgets and less for automobiles. Yet, the overall point is that
there could be huge changes in these businesses that influence advancement open
doors. As far as administrations, worldwide the travel industry may not completely
recuperate to its past level, this has been a significant commodity for some non-industrial
nations. Then again, interest for medical services, childcare, and elderly care is probably
going to rise as these are all immigrant-intensive businesses in cutting edge economies
so interest for traveler laborers might well increment.
Based on the International Trade Centre, the recovery strategies for global trade
able to give a rapid but long-term response in entering the new reality emerging in global
markets. Individual recuperation systems can be planned in between three or four months
through distant meetings to guarantee accomplice nations rise out of the current
emergency in a more grounded position.
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2.4.1 Managing disruption and strengthening critical sectors (Short-term
response):
This response of trade recovery strategies is focusing on to strengthen critical and
systematically important sectors that will grow continuously despite global value chain
breakdowns. The sectors that are included are agriculture and food processing, health,
pharmaceutical, sanitary industries, and information and communications technology.
Moreover, support capacities important to flourish in a low-contact society are tended to,
for example, transport, operations the executives and web-based which is the ecommerce.
The strategy will uphold accomplice nations to fortify these areas in spite of the
vulnerability made because of the pandemic. It will distinguish tailor-made answers for
nations to empower them to explore exchange unsettling influences, for example, send
out boycotts, dubious exchange relations and movements creation limit.
For the short-term, this strategy will uphold accomplice countries to recognize the
exchange effect of COVID-19 on its key product areas, especially on its SMEs and also
recognize new business relations and circulation channels, homegrown and unfamiliar.
Not only that, but oversee exchange limitations, re-form supply limit, and foster advanced
inventory chains to keep up with development of merchandise while clinging to wellbeing
measures also are effective. The countries also can create guides to reinforce transport
and coordinated factors abilities and to oversee hazard. Influence advanced channels
and ICT apparatuses to guarantee MSMEs' ability to keep working. Construct limit and
cycles around new sterile and work wellbeing rules, and in food handling consistence,
particularly for consistence with SPS, wellbeing and other deliberate principles in send
out business sectors.
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2.4.2 Building economic resilience and improving business agility to face the
“new normal” (Medium-to-long term):
Based on the International Trade Centre, ITC will help countries to rebuild
economic resilience and also identifying all the chances and opportunities for
diversification of production. It does not stop there, but this strategy also to improve and
strengthen the business operating situations while create regional, domestic, and global
markets.
In this long-term strategy, the country will get to outline medium-and long-haul
esteem tie hazard evaluations to assist policymakers with understanding financial
weaknesses, and propose emergency courses of action and suitable long-haul reactions.
The country also gets to recognize and anticipate a sound business climate, particularly
contest, admittance to fund, exchange help and worldwide operations for organizations
to reinforce flexibility. Other than that, the country gets to assist MSMEs with embracing
spry administration practices and associate with advanced stages and go worldwide
through e-commerce business. Foster e-Strategies for legislatures and TISIs to offer on
the web and advanced help administrations for MSMEs and also support digitalization of
conventional worth chains for improved quality, discernibility and consistence.
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Conclusion
We may conclude that COVID-19 has had a significant influence on our society,
economy and nation as a whole. As may be seen, there have been several fluctuations
in consumer demand for goods and a significant impact on global economic activity as a
result of the COVID-19 epidemic. Globally, trade in products will fall by 7% in 2020. By
using China as a "hub" for our research, we are the first to look at the impact of the
pandemic on global commerce in 2020. In the first quarter of 2020, as the rest of the globe
was beginning to feel the effects of COVID-19, China was the worst hit. More fatalities
among a nation's primary trade partners are likely to substantially increase the amount of
goods imported from China by that country. Country's imports from China aren't affected
by third-country lockdowns but the direct impact of COVID-19 is.
An abundance of studies has been conducted to examine the effects of the
COVID-19 pandemic, and trade is not an exception. According to our research, the global
pandemic has a direct impact on bilateral trade flows. Most empirical research has not
taken into account these impacts. Things that were not in great demand previously are
suddenly rising significantly. Previously non-essential items have suddenly become so.
Goods that were previously in great demand suddenly dropped significantly.
During the pandemic season, producers or suppliers are required to work longer
hours and produce more often than they normally would. An increase in the cost of
products is followed by a decrease in the cost of things. Various more difficulties may
develop, so we need to fulfill our various responsibilities in tackling the challenges of
COVID-19. As a result, governments have a critical responsibility to play in safeguarding
the well-being of their citizens. People are more likely to comply with government orders
when their well-being is taken into consideration. At the same time, we can lower the
number of COVID-19 instances.
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References
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https://voxeu.org/article/2020-trade-impact-covid-19-pandemic
Social economy and the COVID-19 crisis: current and future roles. (n.d.). OECD.
https://www.oecd.org/coronavirus/policy-responses/social-economy-and-the-covid-19crisis-current-and-future-roles-f904b89f/
Food Supply Chains and COVID-19: Impacts and Policy Lessons. (n.d.). Www.Oecd.Org.
https://www.oecd.org/coronavirus/policy-responses/food-supply-chains-and-covid-19impacts-and-policy-lessons-71b57aea/
Moore, S. (2021, April 30). The Importance of Global Covid-19 Vaccination. Retrieved
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https://www.sciencedirect.com/science/article/pii/S0889158321000149
International Trade Centre Team. (n.d.). Trade recovery strategies. International Trade
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