Restrictions on cross-border mobility affecting global trade, says WTO
A new report from the World Trade Organisation (WTO), has shown that trade in goods and services have been affected by temporary border closures and travel restrictions linked to the COVID-19 pandemic.
According to the report, the cross-border mobility of individuals plays an important role in both the cross-border provision and consumption of services and in manufacturing value chains.
Noting that while the severe restrictions on cross-border movement were not motivated by trade considerations but by public health reasons, such measures have had a significant impact on trade.
“In several members, initial sweeping travel barriers have been replaced by more fine-tuned policies, aimed at allowing the movement of ‘essential’ foreign workers, or creating ‘travel bubbles’ permitting quarantine-free mobility among partners.
“A significant amount of services trade requires physical proximity between producers and consumers. International mobility to consume or provide services abroad is one way to attain this proximity. Mobility is also important to the operations of services providers who establish a commercial presence in other countries, as well as to those who ordinarily provide services remotely across international borders.
“Border measures and travel restrictions have had a particularly heavy impact on sectors such as tourism and education services,” the report showed.
The trade organisation noted that COVID-19 has triggered an unprecedented crisis for the tourism sector, noting that in terms of travellers and revenue, international tourism in 2020 is expected to register its worst performance since 1950. In higher education, some institutions are facing a potential drop in international student enrolment of 50 to 75 per cent.
Mobility barriers also significantly affect trade in goods, through their impact on transport services and on information and transaction costs.
“Restarting international mobility is unlikely to proceed in a linear fashion. Given the cross border spill-over resulting from measures affecting transnational mobility, a case can be made for supplementing domestic action with international cooperative efforts.
“WTO members may eventually wish to look into building greater preparedness and resilience for future crises, for example starting with information exchange about lessons learnt about mobility restrictions and trade. The exercise could help with identifying ways to implement travel measures that meet public health protection objectives while producing the least trade distortive effects,” the report added.
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