a new one Blog post by Antoine Berto With Sebastian Stumpner of Bank of France:
During the Covid-19 pandemic, government blockades and more general restrictions have resulted in the interruption of international trade in goods. We show that when the blockade was initially implemented in the spring of 2020 with a higher degree of stringency, bilateral trade declined even more. In addition, the quantitative impact of the embargo on trade weakened in the second half of 2020. In particular, the embargo imposed in exporting countries will have little or no significant impact on trade in the second half of 2020.
Figure 2 shows the decline in the value of trade due to the decline in the value of the commodity still being traded (red) and the termination or start of the transaction value (blue)-see notes.
Note: The author calculated based on data from the Trade Data Monitor (TDM), of which 31 reporting countries accounted for approximately 75% of global trade. Exports are measured in current U.S. dollars. Trade relations are represented by exporting countries, importing countries, and products specified in the 6-digit level of the United Nations Harmonized Product Naming System. “Continuing relationship” corresponds to a trade relationship that has remained “active” (that is, represented by a positive value of trade) within a given month for two consecutive years (for example, April 2019 and April 2020). The value of entry minus exit corresponds to the change in the total bilateral exports, which is due to the establishment of new trade relations and the termination of trade relations within 12 months. A positive value means net trade creation, while a negative value means net trade destruction. Based on Berthou and Stumpner (2021).
Figure 1 shows the estimated impact of lock-in strictness on imports and exports.
Note: The month of 2020. The coefficient (and 95% confidence interval) is estimated from the import and export equation, where the main variable of interest is the stringency of the blockade of the partner country. The equation is estimated in the panel and relies on trade data monitors from the University of Oxford and locked-in strict trade data. For more information, see Berthou and Stumpner (2020, forthcoming).
Blog post Here.
