Impact of COVID-19 on International Trade and the related Laws

By: Bodhisattwa Majumder

“That’s the positive aspect of trade I suppose. The world gets stirred up together. That’s about as much as I have to say for it.”

― Isabel Hoving, The Dream Merchant

Beginning the article with a “positive” quote was indeed the irony, in the ages where the world is scared of being positive. The Coronavirus or COVID-19 (“Coronavirus”) from Wuhan, People’s Republic of China (“China“) has engulfed as many as 213 countries across the globe with a medical emergency and has claimed more than 258,160 lives till now with 3,689,887 affected cases.[1] This strain of the virus is graver than the other types of Coronaviruses as it has never been identified in humans before. [2]Coronavirus belongs to the zoonotic group of viruses which can affect human being with a range of health ailments ranging from the common cold to serious problems such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV).[3] The World Health Organization and other countries including the US have declared it as “Global Public Health Emergency” and therefore it has been declared as public health emergency of international concern (PHEIC).  In order to restrict the transmission of the virus, China has taken various restrictive measures which have caused serious human rights violations including but not limited to arbitrary censorships, lockdowns, quarantines, police suppression, and mass detentions.[4]

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The nature of the Coronavirus Virus Disease (Herein after, “COVID-19”) was such that, the world was forced to shut their doors. Due to the highly communicable nature of the disease, every nation went into their own and restricted entry and exit of both people and objects. This led to trade restrictions both within the countries and also between the countries. Although these measures were aimed at countering the biological impacts of the virus, the ripple effects of these measures were not limited to the outreach of the virus and also impacted international trade.

It is rightly said that for the virus there is a vaccine (or will be a vaccine), however, for the impact the virus had on the economies, there is no instant cure. The immunity of markets has run dry and there is only one option to revive that. More trade. But that path is also faced with numerous impediments from the after effects of COVID-19. Every country had its obligation to provide healthcare in terms of care packages, fiscal benefits, waivers, loans which burdened every nation with sovereign debt.[5] Everything would have been feasible for the countries to handle if there was a certainty or a deadline when the pandemic would end. Currently the nations and the transnational organisations do not have the answer to the above question. Although the trials of vaccines and vaccinations of the public has already commenced, it is indeed a very difficult point to ascertain whether there will be any further peaks. Every industry faces the fear of a lockdown hence the initiation of new trade measures and risk taking has also faced a steep slope. However, in order to have a foreseeable growth it is quintessential that international trade is revived to ensure a steady supply and demand.

The Governments of the nations have already began providing initiatives such as tariff and tax exemptions to the players who are in a position to trade again.  But how far do we stand a chance? This article analyses the impediments in international trade and strives to provide possible courses of action.

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International Trade – What is ground zero saying?

According to a latest declaration by an UN agency[6],

“Assuming persisting uncertainty, UNCTAD forecast indicates a decline of around 20% for the year 2020,” the UNCTAD said in a report. “Trade in the automotive and energy sector collapsed while trade in agri-food products has been stable.”

It was reported by the United Nation Conference on Trade and Development that the developing countries have faced the most burnt of the COVID wrath. The exports have taken a herculean fall of 18% which stands beyond any look of recovery. Compared to them, the developed countries have performed have better. The UNCTAD report further had added that

“China appeared to have “fared better” than other major economies, with exports growing by 3% in April, but the recovery may be short-lived as imports and exports fell by 8% in May, it added.”[7]

The approach of the Countries to COVID and other nations

The basic tenets of trade law stand on the principle that the more fortunate countries should help the third world countries in the long run. The World as we know it has never been just about the member nations or the territory occupied by the nations. It has been an ecosystem of nations which has been a living entity, constantly evolving through ages connected by intangible interactions of trade, commerce, foreign policies and other forms of inter-national interactions. Despite the transnational wars and conflicts, the nations have always worked towards a peaceful coexistence. In order to achieve such a state of being, the nations have strived to mould its foreign policies, security interests, diplomatic ties and allocation of resources in tandem with the needs of its neighboring nations.

In furtherance of same, the WTO was formed which provided in its basic text that:

all WTO members to safeguard the trade interests of developing countries” and to “increase trading opportunity for developing countries.” 

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In times such as these there was a never a better opportunity or the need to put the above principle into practice, however the case was not the same. The moral responsibilities of the developed countries was not shown in the world market. There was no visible means to assist the third world economies, provide medical or social or economic support. Stringent laws were enacted to cut off other nations and at the end it came to shutting the doors by the fortunate in the face of those who are not.[8] Further, the COVID pandemic saw the cold war between the dragon and the eagle once again. While the United states took it to blame China for the pandemic and thus causing a ideological war on its practices to harm other nations and profit from it. Grave remarks were exchanged and various stringent measures have been taken to politically harm the other country.

There have been numerous measures from the United States towards China and other allying nations be it the draconian Hong Kong Shanghai Act, or the temporary bans on various Shanghai based industries operating on the united states, or imposing heavy charges on foreign debts, US has not shied away from a direct conflict.[9] Further India has also engaged in diplomatic warfare with the Chinese republic by banning a large number of Indian operated applications. But this makes us think, whether is it really the time for this?


Post COVID Trade – The urgent need for the phoenixes to rise again?

  1. Ensuring confidence of the players and the consumers.

Currently the trade needs to take off and for that we need steady and confident players in the market who take the first step. In order to have confident parties to engage in trade and invest their capital into business, it is essential that the parties are aware of the policies of the government in place. There should be absolute transparency on the part of the government, and there should be visible cooperation on their part. It is essential the countries make sure to honour their transnational trade agreements, and commitments with the member nations of the World Trading Organisation.[10]


  1. Removing the clog of Supply Chains Pipeline

The port restriction has severely affected the supply chains across the world in terms of the commercial voyaging. The policies has led to additional temperature screening at all sea checkpoints, including ferry and cruise terminals, and placed regulations to take additional precautionary measures such as prohibiting shore leave for personnel in China ports, mandatory temperature checks, keeping a log of crew movements and restricting staff travel to China among others.[11] The failure of delivery and performance of contracts due to these impediments in turn raise the commodity prices which act as a drawback for investors.

  • While the demand for essential commodities has increased significantly, these essential goods have taken the place of other commodities in supply. While it is understood that it is indeed a noble cause, and needs enforcement by the countries, it is evidently affecting the supply chain.
  • The need for additional cargo transport through the commercial vessels and passenger/cargo flights has been causing inordinate delays to the commercial transport of cargo. This problem needs to be addressed by either introduction of new modes of transport or segregation of the existing mediums.
  • The limits placed on the transport of passengers per commercial flight in order to comply social distancing norms has been causing huge impact to international travel industry.

These minute impediments have been adding to the already burdened supply chain. The result of this is increase in costs and time of voyage of goods. This blockage in the supply line is another reason for delay of the revival of trade.

  1. Avoid another pandemic – Ensuring this is a one-time thing

While the morale of the parties involved form an essential part of the problem, it is just the tip of the iceberg when it boils down to the growing economic crisis across the world. The crisis is not limited to any specific sector any specific geographic territory, but touches every corner of the world. To overcome this dark age or for the matter avoid another one, it is quintessential that the government of the nations across the world invest themselves heavily both financially and by spirit to provide social security. Further, huge investments are needed to be made in not only health sector but other sectors of economy. As this is not a continuous crisis but is coming in waves, the governments must be prepared for dealing with this approach for longer durations of time. Lastly, the intermediate actions taken now must be observed under close lens as they would be having long term ripple effects long after the COVID pandemic is over.

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[1] “Coronavirus Maps and Cases: Track the Global Spread”, CNN Health, Available at, Last Updated: May 6, 2020 at 10.45 am ET.

[2] “Coronavirus disease (COVID-19) Pandemic”, World Health Organization, Available at, Accessed on 06th May, 2020.

[3] “Factsheet for health professionals on Coronaviruses”, European Centre for Diseases Prevention and Control, , Accessed on 6th December, 2020.

[4] “Explainer: Seven ways the coronavirus affects human rights” Amnesty International, , Accessed on 06th December, 2020

[5] COVID-19 and International Trade: Issues and Actions, OECD, 12th June 2020, Available at

[6] UNCTAD Forecast, UN Conference on Trade and Development, November, 2020.

[7] Ibid.

[8] Nicolás Albertoni and Carol Wise, International Trade Norms in the Age of Covid-19 Nationalism on the Rise?, National Public Health Emergency Collection, Available at


[9] Tariff Exclusions, Step Toe, Published April 2020, Available at

[10] COVID-19 and International Trade: Issues and Actions, OECD, 12th June 2020, Available at

[11]Bodhisattwa Majumder, Maritime Implications of Coronavirus in Southeast Asia, CMNLU NLU Orissa, Published December, 2019.


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