Background :

• Devastating impact of Covid-19 pandemic
• World economy has shrunk by 4.4% and global trade by 5.3%

Unavoidable declines in trade and output

• Issues With Global Trade Supply Chain
• Repercussions for corporations and businesses that have benefited from economic interdependence supported by cross-border supply chains.
• Trade rules have worked best when the global economy is booming and isn’t facing a crisis.
• The United Nations Conference on Trade and Development held that emerging and developing economies, which rely on export-led growth, will now be severely impacted as the global economy contracts and the world opts protectionism policies.
• The least developed countries whose economies are driven by the sale of raw materials will also face hard consequences.

Way Forward

• Global supply chains that have remained dormant for long can be made resilient by stimulus packages and forced savings. Such interventions are expected to help revive manufacturing with lower production costs, induce investments and promote technology transfers.
• In a post Covid-19 world, members of the World Trade Organization should promote trade facilitating rules.
• Mutually beneficial trade arrangements that seek deeper economic integration should be entered into at the bilateral and regional levels to create win-win situations for all stakeholders, including consumers, who tend to benefit from lowered barriers and harmonised standards.
• Countries that harness technology are expected to dominate international trade in future with a transformational impact on the global economy.
• Just as the steam engine in the 19th century and computing power in the 20th century, data will be the main driver of economic growth in the 21st century.
• Rapid growth in e-commerce and the virtual world will demand entirely new skills from the workforce. Therefore, economic policies should focus on stronger safety nets for workers; income protection, skill training, health care and educational support for families.
• Building an ecosystem that incentivises value-added manufacturing and technology-induced finished products should form a part of long-term strategy for emerging economies like India.
• Addressing the needs of the most vulnerable countries – measures, for example in relation to export restrictions and creation of regional stockpiles, could include specific exemptions or assistance to address the needs of the poorest countries.
• Keeping markets open and predictable, as well as fostering a more generally favourable business environment, will be critical to spur the renewed investment. And if countries work together, much faster recovery is possible than if each country acts alone.