United Nations: Export growth declined in India in the third quarter of 2020 relative to the same quarter last year but picked up pace in September, according to a global trade update by the UN.
The UNCTAD’s new global trade update said that global trade recorded a 5 per cent drop in the third quarter of 2020 compared with the same period last year. This marks an improvement on the 19 per cent year-on-year plunge recorded in the second quarter, and the United Nations Conference on Trade and Development (UNCTAD) expects the frail recovery to continue in the fourth quarter.
India’s export growth saw a decline of 6.1 per cent in the third quarter of 2020 as compared to third quarter of last year. However, India recorded export growth of four per cent in September, it said.
Depending on how the COVID-19 pandemic evolves in the winter months, the UN trade and development body expects the value of global trade to contract by 7 per cent to 9 per cent with respect to 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.” Although a 7 per cent to 9 per cent decrease would be a negative finish for the year, Kituyi said it’s a much more positive result than was expected in June, when the UNCTAD had projected a 20 per cent year-on-year drop for 2020.
Since then, trade trends have improved primarily thanks to the earlier-than-expected resumption of economic activities in Europe and east Asia, it said.
The UNCTAD said the sharp and widespread decline in international trade in Q2 2020 was similar for developing and developed countries. But exports from developing economies appear to be recovering faster.
Year-on-year growth of developing nations’ exports improved from -17 per cent in the second quarter to -6 per cent in July, while those from developed nations increased from -22 per cent to -14 per cent. South-South trade – commerce among developing countries – has shown some resilience, with the year-on-year decline sitting at 8 per cent in July, up from 16 per cent in the second quarter.
The report’s assessment of trade in different sectors said that the pandemic had hit the energy and automotive industries the hardest, while mitigation responses, including tele-working and personal protection measures, had led to strong growth in sectors such as communication equipment, office machinery, and textiles and apparel.
UNCTAD’s analysis gives special attention to COVID-19 medical supplies, which include personal protective equipment, disinfectants, diagnostic kits, oxygen respirators and other related hospital equipment.
According to the report, exports of COVID-19 medical supplies from China, the European Union and the United States rose from about USD 25 billion to USD 45 billion per month between January and May 2020.
The increase in such trade, however, has primarily benefited wealthier nations, with middle- and low-income countries largely priced out from access to COVID-19 supplies, the report says.
The 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.
The report calls on governments, the private sector and philanthropic sources to continue mobilising additional funds to fight the COVID-19 pandemic in developing countries and to support financial mechanisms, such as the global COVAX initiative, to provide safe and effective COVID-19 vaccines to poor countries
