The import/export industry is dealing with so many unprecedented challenges during the global pandemic and the stakes are high. How can we export PPE when our cargo ships are restricted to port? How can we conduct crucial trade that might mitigate the looming recession if we can’t fly planes? It’s a terrible catch-22 that’s leaving even world leaders and trade organisations scratching their heads.
Varying recovery rates
One overarching difficulty with resuming global trade is the variations in recovery rates. COVID-19 manifested itself in waves across the globe. Each country handled it differently, and each will be emerging from their respective lockdowns at different stages. Indeed, some will be re-entering full or partial states of lockdown if we begin to see second spikes.
This raises the question: how can the economy of a country ready to export survive when their trade partners’ borders remain closed?
Freight & Cargo
With a perfect storm of passenger flights quite literally grounding to a halt, a decrease in air cargo, and an increased demand for essential goods and medicines, air freight has become exponentially more expensive since the first nations began locking down. Costs are up around 30% between China and North America compared to October 2019 numbers, and an eye-watering 60% between Europe and North America.
Shipping costs have also increased dramatically, due to fleets of cargo ships being stuck in port, and a shortage of unloading workers. Moving goods around the globe is becoming more possible with each passing day, but the expense is crippling for exporters.
It’s perhaps an understatement to say that international negotiations can be tense (watch any of the UK’s debates with Brussels if you need a reminder). A major challenge facing the import/export industry is the inability to handle these negotiations in person. It’s much harder to read an opponent’s expression over Zoom, or to gauge tone or intention in a black and white email.
All is not lost. There are ways and means of coming through this global disaster, and an array of potential catalysts and solutions are available to governments and corporations:
The World Trade Organization and the Organisation for Economic Co-operation & Development (OECD) prove their worth in situations like this. They are crucial overseers for policy change across nations, and each nation has an obligation to advise them of changes in importing/exporting policy. Together, these organisations can create a neutral, shared, and totally transparent base, from which individual nations can establish deals and mechanisms to keep trade going.
In the face of a global recession, trade must continue in order to mitigate loss. The key to ensuring this is trust. An exporting nation must be assured they will not be bound by unexpected restrictions; an importing nation must be assured there will be no health risks attached to the goods they receive. The phrase ‘the rules were made to be broken’ does not apply here. Nations must work more collaboratively than they ever have (or at least since certain World Wars the pandemic is oft compared to).
Health & Safety
All of society is now so thoroughly programmed in the discipline of health and safety, this one almost goes without saying. But as we get better and better at wearing masks, washing hands and socially distancing, international trading bodies are learning how to quarantine imported food, implement ‘biosecurity’ practices without being unnecessarily restrictive, and deploy daily testing of on-site workers. By making these measures a mainstay for the foreseeable future, we can find a way to resume profitability without endangering workers or the general public.
Taxes & Tariffs
An essential element to keeping trade moving is ensuring imported goods can actually be afforded by the end consumer (the proposed VAT cuts providing a promising example), and can be paid for safely, via the provision of e-payment and contactless systems.
To sum up
No one is under any illusion that we’re out of the woods. Now, a question mark hovers over the superpower that is America as it loses grasp on infection control, portending inevitable repercussions for its trading partners. Second spikes are occuring in concentrated areas of the world. But necessity is the mother of all invention, and our capabilities for innovation, adaptation and agility are considerably more powerful than the last time a pandemic swept the globe. This is an opportunity for nations to sing from a single hymn sheet and achieve a new kind of unity as we navigate a new post-virus world.