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Effects of COVID-19 on trade flows: Measuring their impact through government policy responses.

ABSTRACT: This paper examines the impact of COVID-19 on bilateral trade flows using a state-of-the-art gravity model of trade. Using the monthly trade data of 68 countries exporting across 222 destinations between January 2019 and October 2020, our results are threefold. First, we find a greater negative impact of COVID-19 on bilateral trade for those countries that were members of regional trade agreements before the pandemic. Second, we find that the impact of COVID-19 is negative and significant when we consider indicators related to governmental actions. Finally, this negative effect is more intense when exporter and importer country share identical income levels. In the latter case, the highest negative impact is found for exports between high-income countries.

SUBMITTER: Barbero J

PROVIDER: S-EPMC8513914 | biostudies-literature | 2021

REPOSITORIES: biostudies-literature

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Effects of COVID-19 on trade flows: Measuring their impact through government policy responses.

Barbero Javier J de Lucio Juan José JJ Rodríguez-Crespo Ernesto E

PloS one 20211013 10

This paper examines the impact of COVID-19 on bilateral trade flows using a state-of-the-art gravity model of trade. Using the monthly trade data of 68 countries exporting across 222 destinations between January 2019 and October 2020, our results are threefold. First, we find a greater negative impact of COVID-19 on bilateral trade for those countries that were members of regional trade agreements before the pandemic. Second, we find that the impact of COVID-19 is negative and significant when w ...[more]

PMID: 34644312

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Project description:BackgroundDuring the past two years, the COVID-19 pandemic has cost millions of lives around the globe, caused major morbidity and provoked widespread economic and social disruption. In response, governments have enacted policies to mitigate the impacts of the pandemic. This research focuses in on policies aimed at increasing access to essential health products and services by comparing them to the global rules governing trade, investment and intellectual property. We have assessed whether these rules have or could have constrained countries in responding to this and future crises. The study identifies the nature and scope of the trade-related health sector policies implemented by our sample group of countries, selected because of their systemic significance: the United States, Germany, France, China, South Africa and India. Each policy is placed into one of five broad categories covered by trade and investment rules so that we could assess their consistency with those rules.ResultsWe found, among other things, that the types of trade-related health measures were quite diverse. The high-income countries in our study were the most active in the policy space and tended to rely on subsidies-based measures while the middle-income countries relied more heavily on export and import measures. Policies directly relevant to intellectual property protection were virtually non-existent. When evaluating the implemented policies against the global trade and investment rules, we found potential constraints under five different types of rules: those governing subsidies, import and export trade barriers, investment measures, government procurement and trade-related intellectual property.ConclusionsGiven the tension between the global rules and the practices of policymaking during the pandemic, we conclude that the tension must be resolved in favor of governments making policy rather than relying on existing exceptions or pushing national governments to comply more exactly with the rules. Although the pandemic itself does not respect national borders, governance still generally occurs at the national level because national governments are often the only entities with both the legal authority and the practical ability to respond.

Dataset Information

Effects of COVID-19 on trade flows: Measuring their impact through government policy responses.

Publications

Effects of COVID-19 on trade flows: Measuring their impact through government policy responses.

Similar Datasets

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