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Impact of Pandemics on Global Trade
Pandemics bring uncertainty to the global economy; uncertainty in the business environment undermines trade. The effects of pandemics such as COVID-19 reverberate throughout society (https://azamwriters.com/order/) The resultant shocks across the different domains of society influence important elements of global trade in various ways. This influence can be examined in three major aspects of global trade: supply and demand, distribution, and policies.
COVID-19 offers some insights into the impact of pandemics on supply and demand in global trade. At the onset of the ongoing pandemic, factories had to close operations or scale down. This move resulted in supply-side shocks—a major factor in global trade—as companies could not maintain production. According to the World Trade Organization (2021), restrictions on the movement of people undermined investment, and investors became risk-averse to the extent that subdued what had become a common phenomenon to signify discoveries: “Eureka!” The restrictions also undermined demand as consumers turned to online purchases to avoid crowded markets and shopping malls.
Air travel and other modes of transportation have incurred significant losses during COVID-19. This outcome has shown that pandemics disrupt transport in profound ways. Disruptions in this aspect of global trade imply few goods in the market, affecting consumption. Lower consumption translates into lower trade volume.
Another effect of pandemics occurs in policy environments. COVID-19 has shown that pandemics influence policymakers to adopt bold decisions as part of efforts to limit the spread of COVID-19. An example of bold policy changes involves allowing emergency service providers only to report to work. During COVID-19, this policy has been used as a trade-off between the economy and public health (Piret & Boivin, 2021). The emphasis on people’s health over the economy implies subdued global trade. Pandemics, therefore, have a far-reaching impact on global trade with long-term implications. click here