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 PAGE

1.0 Introduction 3

2.0 Content
 2.1 What: Article Review “The 2020 trade 4–6
impact of the Covid-19 pandemic”

7–8
 2.2 When: When will global trade be able to
fully recover from the Covid-19 pandemic?

9
 2.3 Why: Why has international trade
deteriorated, particularly since the Covid-19
pandemic?
10 – 12

 2.4 How: How to recover global trade after the

Covid-19 pandemic?

3.0 Conclusion 13

4.0 References 14

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) pointed out at the issue starting, the pandemic passed on an
amazement from commonly the natural market borders. In the interim both are awful,
the ensuing impact on a country's import interest - described as the qualification
between its local interest and local stock - is concluded to be problematic. In another
writing (Liu et al. 2021), we settle these vulnerabilities and give whatever we
acknowledge are the essential assessments of how all of these organizations affected
worldwide trade streams 2020, saw through their impact on imports from China.
Specifically, we measure how Covid-19 rate and lockdown limits, inside a country and
on its trade accessories, affected the month-to-month year-over-year advancement of
imports from China for all issues with which China exchanged 2019-2020, at the thing
(HS 6-digit) level. China encountered the most Covid-19 in the essential quarter of
2020, when the rest of the world was basically starting to experience the aftereffects of
the contamination. From the another quarter ahead, which is the place where our
elements of interest start to vary even more by and large, the situation pivoted, and
China's economy recovered rapidly, becoming 2.3% in 2020.

4
 The underlying advance to see either the economy affected or not is the regular
exchange impacts of the pandemic. The brief impacts of Covid-19 repeat (passed on by
how much passing per capita) and of Coronavirus actuated government actions
(granted by a record of the durability of lockdowns) plainly horrendous, showing that the
damaging own-request influence on nations' imports from China beats the negative
particular-supply impact. Nearly with pre-pandemic situations, a state with the primary
equal of passing per thousand individuals in a month in our model (Slovenia in
December 2020) could encounter a decrease of 13% to imports from China for that
month. Additionally, moving from no lockdown’s furthest extent of lockdown inflexibility
in the model (Honduras in April and May; the Philippines in April) could make a
decrease of 17.6% in imports from China. This reveals the organization procedures to
check monetary exercises will generally largely affect a nation’s imports than the
immediate wellbeing and social effects based on pandemic. Expecting that we reflect an
increment of one typical deviation in these factors, the decrease in imports could be,
separately, 1.5% and 4.2%. Gathering this altogether, moving every one of the three
components from nothing (as in 2019) to 2020 ordinary can propose a decrease of
almost 10% of imports from China.

Then, the exchange impacts of the pandemic change across a few aspects. The
rundown is the negative exchange impact of the pandemic evaporate when we limit the
guide to 'clinical product', featuring the peculiar powerful they followed during the
pandemic. Besides, a more weak impact is additionally current for stock with a great
'contract power' - for which extended stretch associations are more critical - and for
items conveyed in 'taking care of trade'. Thirdly, the unfavorable outcomes are extra
expressed on behalf of 'solid use items', but are more helpless during 'capital product',
for which extended haul arranging infers an alternate response to the brief shudder on
account of the epidemic. In 'OECD people', the effect of lockdown seriousness modifies,
showing that it incited a more unassuming diminishing based on local interest than in
local reserve. The effects were centered around the 'concentrated edge'. This model
mirrors what has been start for the "remarkable trade breakdown" that conducted the
Global Crisis of 2008 (e.g., Behrens et al. 2013, Bricongne et al. 2012).

5
 The Covid-19 pandemic takes prodded a deluge of examination on its different
outcomes and exchange is no exemption (see Liu et al. 2021 for a conversation of the
primary examinations). A common finding of the pandemic has unfavorably pretentious
worldwide business streams, yet the nuances of the consequences change basically
crossways concentrates in view of changes in the specific strategy, with the level of
aggregate, the sorts of items analyzed, and the data incorporation. A critical separation
between our assessment and the current definite composing is that we reflect both
Covid-19 passing cases and lockdown techniques, while most existing investigation
bases on by the same token. While the Covid-19 passing measure is an instinctual
middle person for the impact of the pandemic, lockdowns (of various degrees of
unbending nature) are completed as a reaction to the pandemic, habitually accurately
when the amount of passes is extreme or predict to increase presently. Accordingly,
focusing on either factor in isolation can provoke misleading outcomes.

6
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. 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, 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

7
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. 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 the societies get their vaccines, it will help the global trade be able to fully
recover from Covid-19 pandemic.

8
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

9
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.

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.

10
 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 e-commerce.

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.

11
 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.

12
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.

13
References

The 2020 trade impact of the Covid-19 pandemic. (2021). VOX, CEPR Policy Portal.
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-19-
crisis-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-19-impacts-and-policy-lessons-71b57aea/

Moore, S. (2021, April 30). The Importance of Global Covid-19 Vaccination. Retrieved
from News Medical Life Sciences: https://www.news-medical.net/health/The-
Importance-of-Global-COVID-19-Vaccination.aspx

Kozunobu Hayakawa, H. M. (2021, June). Impact of Covid-19 on International Trade20.

https://www.sciencedirect.com/science/article/pii/S0889158321000149

International Trade Centre Team. (n.d.). Trade recovery strategies. International Trade
Centre. https://www.intracen.org/Trade-Strategy/COVID19/

Dollar, D. (2020, November 17). The future of global supply chains: What are the
implications for international trade? Brookings. https://www.brookings.edu/research/the-
future-of-global-supply-chains-what-are-the-implications-for-international-trade/

14