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World Trade Organization (WTO)

Trade in all forms has been extremely adversely affected by the COVID-19 pandemic as production and consumption were scaled back globally. The COVID pandemic affected global trade through a complex network of both supply and demand shocks. On the supply side, the social distancing measures and border closures that were adopted globally in order to restrict the spread of COVID- 19 have reduced air freight capacity, halted industrial production, and limited port activities, and restricted the ability of businesses to operate. Consequently, both production and export capacities were severely restricted. In the case of global value chains, the inability to source production inputs resulted in a breakdown of several global value chains. The COVID-19 induced demand shock was no less damaging. The world's largest importing economies displayed sharp drops in aggregate demand due not only to social distancing measures affecting ability to purchase, but due also to loss of jobs and incomes in these countries.

As a result of the pandemic, border closures and social distancing measures, governments across the world have faced large declines in economic activity, recessions, and budgetary shortfalls while populations have faced large threats to access to income, employment and food. The effects of these declines in trade have heterogenous effects between countries and within national populations, and there is already evidence that women will be more negatively affected due to their overrepresentation in the food service, retail, textile and apparel manufacturing, and informal employment.

This complex network of job losses, reduced income, and decreased health outcomes will have significant impacts global human development and the achievement of the 2030 Agenda and Sustainable Development Goals (SGDs). This report explores the mechanisms through which the COVID-19 pandemic and the subsequent reduction in international trade has affected each of the 9 SDGs under review by the 2021 High Level Political Forum: 1) goal 1 on no poverty; 2) goal 2 on zero hunger; 3) goal 3 on good health and wellbeing; 4) goal 8 on decent work and economic growth; 5) goal 10 on reducing inequality between and among countries; 6) goal 12 on responsible production and consumption; 7) goal 13 on climate action; 8) goal 16 on peace, justice and strong institutions; and goal 17 on partnerships. The report also recognizes the WTO's attempts to mitigate the effects of the pandemic on international trade, and concurrently the SDGs.

The pandemic occurred at a point where the multilateral trading system was experiencing preexisting stress. Persistent trade tensions and a drastic increase in trade restrictive measures from 2017 had resulted in slow global merchandise trade growth from 2017 to 2019. Enter COVID-19 and WTO economists estimated that world merchandise trade fell by a further 5.3% in 2020.1 This was a substantial improvement from earlier forecasts of a 12.9% decline and was largely the result of strong fiscal and monetary stimulus policies by governments around the word. A restrained approach to trade protections and introduction of liberalizing measures over the course of 2020, as well as the shift to remote work and business innovation in many places also contributed to the relatively small decline.

United Nations