International trade resilience with applied welfare economics: an analysis on personal protective equipment (original) (raw)

Personal protective equipment market coordination using subsidy

During a pandemic, various resources, including personal protective equipment (PPE), are required to protect people and healthcare workers from getting infected. Due to the high demand and limited supply chain, countries experience a shortage in PPE products. This global crisis imposes a decline in the international trade of PPE supplies. In fact, most governments implement a localization strategy motivating domestic manufacturers to pivot their operations to respond to PPE demands. An oligopolistic market cannot reach the socially optimal coverage without government subsidies. On the other hand, the government subsidy pays the proportion of production costs to reach the socially optimal coverage, while the government's budget is limited. Therefore, the government collaborates with manufacturers via procurement contracts to increase the supply of PPE products. We propose the first supply chain model of PPE products that investigates manufacturer costs and government expenditure. We consider how different behavioral aspects of manufacturers and government can self-organize towards a system optimum. Additionally, we integrate the consumer surplus, producer surplus, and societal surplus into the game model to maximize social benefit. A cost-sharing contract under the system optimum between government and manufacturers is designed to increase the production of PPEs and hence, helps in reducing the number of infected individuals. We conducted our computational study on real data generated from the mask usage during the Covid-19 pandemic in Los Angeles (LA) County to respond to the reported PPE shortage. Under the socially optimal strategy, the PPE coverage increases by up to 33%, and the number of infected individuals reduces by up to 30% compared to other strategies.

International Trade in the Context of the COVID-19 Pandemic

Igi-global, 2021

This chapter overviews the relationship between international trade and the WTO law, international trade strategy, as well as labour standards, human rights, and the public health in the context of the COVID-19 pandemic crisis. It is stated that the most effective way to overcome the crisis is timely and effective information-sharing since informed community can make better decisions on trade issues. The urgency of effective measures and implementation of new WTO regulations are believed to be vital for providing fair trade in the present circumstances. The right trade policies would not only revive the trade and recover the time lost to the crisis but would also shift toward a more sustainable and inclusive future. The author claims that, in view of the pandemic, the efforts of policymakers and business leaders to find ways to achieve trade balance should imply greater coherency between trade, labour standards, public health, and human rights objectives.

COVID-19 pandemic and world trade: Some analytical notes

The globalization of COVID-19 pandemic is en route to produce severe economic impacts worldwide through distortions in global trade and supply chain. The globalized production and supply chain shocks originating from China generate substantial threat to world trade. The aim of this paper is to provide an early broad-based understanding of the likely trade implications of the pandemic. The paper begins with a standard trade analysis framework to explain the implications for world trade. The paper then presents a theoretical mapping showing the likely progression and span of world trade implications and reviews evidence available so far in the context of the mapping. The paper also presents a separate assessment on the likely implications particularly for trade between China and the rest of the world; followed by some key policy considerations. The paper concludes that the pandemic is likely to not only introduce new patterns of world trade but also affect trade relations, competition, and globalization. Given the scarcity of scholarly work on COVID-19's trade implications, the paper contributes by offering a novel broad-based understanding, which could serve as a basis for advanced analysis. Assessments presented could help stakeholders in preparing for a new world order of international trade.

An assessment of trade policies related to COVID-19

Revista Galega de Economía

Amidst the COVID-19 crisis, international trade was particularly important to guarantee the supply of medical and other goods. This article analyses COVID-19 trade-related policies found in the World Trade Organization (WTO) system from February to October 2020. We used the Database of WTO members’ notifications on COVID-19, including information on 198 notifications. It allows us to observe the trend of notifications, countries and products most affected, types of measures, and the adherence to the WTO’s guidelines. Our findings show two waves of notifications. In the first wave, countries acted unilaterally with little regard to multilateral tools. However, in the second wave, characterized by the predominance of trade-facilitating measures, a trend towards multilateral actions is observed through the establishment of “declarations”. Personal protective equipment (PPE) and medical supplies were the most affected products, but agricultural and food products have also been heavily a...

COVID-19 and the Restructuration of the International Trade in Century XXI (Electronic Monograph)

This electronic monograph is divided into eight chapters. The objective of this electronic monograph is to show the impact of COVID-19 on the international trade worldwide. This first chapter explains each chapter of this electronic monograph. The second chapter shows the extensive damage of COVID-19 in the market economy. This chapter elaborates on different points of view about the impact of COVID-19 on the reduction of the massive consumption and spending gradually and thoroughly. We try to remark that the market economy directly connects with enormous consumption and large profits. This chapter attempts to introduce a new concept entitled “The Massive Constrictioness of Consumption.” This new concept involves how a global pandemic such as COVID-19 can generate terror, psychosis, and massive abstentions from buyers in getting goods or services from restaurants, large shopping malls, popular markets, or any plaza massive people agglomerations. Meanwhile, a massive constrictioness of consumption can generate the partial or full collapse of business immediately. Finally, this research supports that the massive constrictioness of consumption cannot keep long because it can impact the market economy performance in the short run directly. The third chapter analyses the impact of Globalization in the fast expansion of COVID-2019 around the world. We divided into five main reasons to explain the faster COVID-19 expansion worldwide followed by: (i) the massive transportation systems interconnectivity (air, land, and sea); (ii) the massive tourism mobility worldwide; (iii) the worker’s mobility worldwide (post-modern labour division); (iv) the production and income centralization; (v) the heavy international trade dependency. Hence, the main objective of this chapter is to show that Globalization is the major responsible of this worldwide health crisis (epidemics) such as COVID-2019 in our days. Finally, the same chapter is interested to give some suggestions and recommendations in the control the COVID-2019 crisis to reduce its impact economically and socially. In the fourth chapter evaluates how often COVID-19 waves can generate unpredicted short-macroeconomic-shocks anytime in the short run. The constant accumulation of unpredicted short-macroeconomic-shocks in the long run, it can cause an enormous negative impact on the annual GDP performance directly. We argue that each unpredicted short-macroeconomic-shock is highly costly and painful each time happens for any economy. This chapter debates about how COVID-19 waves directly are connected to the temperature levels consistency. On the other hand, this research attempts to introduce a new concept entitled "The Monitoring of Unpredicted short-macroeconomic-shocks." This new concept involves how an increment of COVID-19 infected cases in a specific zone can immediately force closed businesses in restaurants, large shopping malls, popular markets, or any public plaza, respectively. To closed shops in different zones or districts, it can generate a possible increment of unemployment and inflation immediately in the same zone or district, lastly, at the national economy level. This chapter supports that unpredicted short-macroeconomic-shocks often make any economy an easy hunting prey of a possible economic depression. Finally, we like to remark that the government and the private sector's role needs to join efforts to create emergency contention financial programs to reduce the damage in each unpredicted short-macroeconomic shock just on time. The chapter fifth proposes to evaluate the negative impact of COVID-19 on international trade exchange worldwide. Hence, we offer a new methodology is called the "The Trade Emancipation Evaluation Methodology (TEE-Methodology)." There are four primary phases in the implementation of TEE-Methodology. The first phase is designing a multi-input export database table by the production sector (agriculture, heavy industry, light industry, and services). The second phase is the measurement of the trade emancipation index by the production sector (αi). Hence, TEE-Methodology proposes to divide each production sector by: (i) the agriculture trade emancipation index (α1); (ii) heavy industry trade emancipation index (α2); (iii) light industry trade emancipation index (α3); (iv) services trade emancipation index (α4). The third phase is the measurement of the trade emancipation coverage (TEC) Index. The last phase is the measurement of the trade emancipation level (TEL) index. The general objective of applying the TEE-Methodology is to evaluate how the COVID-19 affects large and small countries' production and exports in the short run. TEE-Methodology does not intend to be a forecasting model in any case. TEE-Methodology, in effect, is a flexible and straightforward simulator, which can apply to any issue of trade emancipation that is originated from COVID-19. The sixth chapter presents a new methodology for studying trade closedness from a global pandemic such as COVID-19. The mission of this model is to offer policy-makers and researchers' a new analytical tool to study the impact of COVID-19 in the world trade from a new perspective. We propose a new model entitled "The Global Trade Closedness Model (GTC-Model)," a simple and flexible model. The GTC-Model's general objective is to analyze the impact of a global pandemic on the imports in a specific period (in the short run). The study case is the European Union (EU) COVID-19 crisis from March to May 2020. The chapter is divided into three parts. The first part is the literature reviews the literature on analytical methods evaluating openness based on three approaches focusing on political economy, economic theory, and trade policy. The second part will present a new analysis model to assess the trend, vulnerability, and harmonization of trade closedness. The relationship between trade closedness and COVID-19 infected cases growth is based on a new group of indicators and a new type of graph. The GTC-Model follows a series of steps in its application to study trade closedness growth and COVID-19 infected cases: (i) the degree of closedness by production sectors (Ci); (ii) closedness average rate (Ċ); (iii) harmonization of closedness (HC); (iv) average closedness growth rate (∆Ċ); (v) COVID-19 infected cases gross rate (∆COVID-19); (vi) closedness diamond graph; (vii) closedness/COVID-19 growth rate (∆Ċ: COVID-19) sensitivity analysis chart. The third part of this paper shows the results obtained from the application of GTC-Model in the European Union. The chapter seventh tries to evaluate how a global pandemic can increase any country's external sector vulnerability. Therefore, we propose a new dynamic indicator that is entitled "The External Sector Vulnerability Increment from a Global Pandemic Index (ΔESVIGP)." The ΔESVIGP offers policy-makers and researchers a new analytical tool to evaluate how a global pandemic such as COVID-19 can dramatically increase any country's sector vulnerability anywhere and anytime. The ΔESVIGP is not intended to be a predicting indicator in any case. It shows that any global pandemic crisis can significantly increase the external sector vulnerability in the short run. Finally, the application of the ΔESVIGP is under the evaluation of the global COVID-19 crisis impact of each ASEAN-5-member (Singapore, Malaysia, Indonesia, Thailand, and Philippines) external sector vulnerability. According to chapter eighth the damage of COVID-19 from China to the rest of the world economy is costly and countless. The levels of COVID-19 contagious and death cases are increasing exponentially worldwide. Therefore, this document proposes a new form of compensation (or payoff) from China to all countries affected by COVID-19 around the world. This new form of compensation system can help to solve partially the deep damage of COVID-19 through the application of a tariff to all Chinese products and services. This new tariff is entitled "The Massive Infection Epidemic Diseases Economic Losses Tariff (MIEDEL-Tariff).” The idea is to apply the MIEDEL-Tariff to all products and services made in China. This new compensation system can help to solve the economic losses of all countries around the world affected directly and indirectly from the COVID-19.