OECD - Getting goods across borders in times of COVID-19
This note updates Trade facilitation and the COVID-19 pandemic from April 2020 with insights into the evolution of new border protocols and trade facilitation measures impacting traders since COVID-19 and exploring what more can be done to prepare for the next stages of the pandemic as uncertainty persists. It highlights the importance of transparency and availability of timely trade-related information in mapping bottlenecks and risks, as well as the importance of trade facilitation measures in supporting business recovery and resilience across different goods sectors. Finally, it provides some preliminary insights for trade facilitation with respect to the distribution of vaccines.
As a result of COVID-19, disruptions in cross-border trade have led to a “new world” of trade costs. These include new protocols, additional border controls, and new documentation requirements for shippers and traders. Impacts vary by product, firm size, trade route, mode of transport, and region, affecting the functioning of supply chains in uneven ways across countries and sectors.
At the same time, trade facilitation measures taken at the border have made it possible for supply chains to continue to deliver — by early May 2020, the number of COVID-19-related trade facilitating measures outweighed the new, potentially cost increasing, protocols. Further streamlining of border procedures can also be key for helping economies with the next phases of the COVID-19 pandemic including the global production and distribution of a vaccine.
Digitalisation was key in supporting the many efforts made to facilitate trade during the COVID-19 crisis. Trade facilitating measures included designing “green lanes” for streamlining border controls or exchanging specific trade documents electronically.
More can be done to prepare for the next phases of the pandemic, including by focusing on border procedures for goods that will be needed in manufacturing potential vaccine(s). As uncertainty persists, economies can get a head start by beginning to map trade facilitation measures and regulations needed for the distribution of a potential vaccine and of the inputs it would take to produce it, as well as the coordination of these efforts.
Cross-border co-operation and co-ordination with business can be key for finding the best balance between agility and risk management at the border. When shocks hit, co-ordinated early-warning systems across border posts can alert traders and shippers, allowing them to adjust routes in real-time and effectively prevent supply chain blockages. Economies need to further engage private sector stakeholders in the design of trade facilitation solutions that can best be mobilised when needed to act under pressure and time constraints.
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