Chennai: Despite making some recovery over the June quarter, global trade was still down 5 per cent in the September quarter. UNCTAD has revised the global trade projection from a decline of 20 per cent to 7 - 9 per cent drop for 2020. UNCTAD also noted that India has made 4 per cent growth in exports in September.
UNCTAD found a 5 per cent drop in world trade in the third quarter of 2020 compared to the year ago quarter, an improvement from the 19 per cent decline in the second quarter but insufficient to pull trade out of the red.
UNCTAD expects the frail recovery to continue in the fourth quarter, with a preliminary forecast of -3 per cent compared with the last quarter of 2019.
“The uncertain course of the pandemic will continue aggravating trade prospects in the coming months,” UNCTAD Secretary-General Mukhisa Kituyi said. “Despite some 'green shoots' we can't rule out a slowdown in production in certain regions or sudden increases in restrictive policies,” Kituyi added.
It expects the value of global trade to contract by 7 to 9 per cent with respect to 2019 after revising the earlier projection of a 20 per cent decline.
Since the June quarter, trade trends have improved with earlier than expected resumption of economic activities in Europe and east Asia.
China has in particular restarted its economy much earlier than initially expected. It rebounded strongly in the third quarter with almost 10 per cent growth.
“Overall, the level of Chinese exports for the first nine months of 2020 was comparable to that of 2019 over the same period,” the report said.
UNCTAD also noted that India recorded 4 per cent export growth in September and South Korea 8 per cent.
UNCTAD also found that exports of Covid-19 medical supplies, which include personal protective equipment, disinfectants, diagnostic kits, oxygen respirators and other related hospital equipment, largely benefitted the wealthier nations than middle-income and low-income countries. India was one of those nations which ramped up production of these items. However, the government had imposed restrictions on the exports of these products for a longer time.
According to the report, exports of Covid-19 medical supplies from China, the European Union and the United States rose from about $25 billion to $45 billion per month between January and May 2020. And since April, trade in such products increased by an average of over 50 per cent.
The per capita imports of medical goods essential to mitigate the pandemic have been about 100 times higher for wealthy countries than for poor nations.
UNCTAD warns that if a Covid-19 vaccine becomes available, the access divide between residents in wealthy and poor countries could be even more drastic.
While some low-income countries have the capacity to locally manufacture some protective equipment, this may not be the case for vaccines, which require stronger manufacturing and logistics capacities.
UNCTAD has asked governments, the private sector and philanthropic sources to continue mobilizing additional funds to fight the pandemic in developing countries.