More affected Arab countries ... Corona's repercussions depict a bleak future for global trade

Abdul Hafiz Al-Sawy

The global trade performance since the end of 2018 has not been promising, as the performance expectations since that date were negative, as the global trade growth rate decreased to 1.2% by the end of 2019, and the value of global trade at the end of 2018 was estimated at 19.5 trillion dollars.

Recently, the International Monetary Fund Director Kristalina Georgieva stated that the global economy has already entered a recession, and in light of the Corona pandemic crisis, statements by the Director of the World Trade Organization, Roberto Azevedo, were pessimistic about its performance in 2020, after the Corona crisis hit the global economy.

Although Azevedo did not mention specific rates, and his expectations that the expected economic losses due to the Corona crisis will exceed the losses in 2008, estimates came out from the Trade and Development Conference, indicating a decline in global exports last February by about 48 billion dollars, due to the cessation of Chinese industry supplies abroad .

And remains to talk about the future of global trade, after the Corona crisis, not only related to the extent of the global economy out of the recession, but the matter will extend to affect the principle of free trade, as well as the role of the World Trade Organization.

The issue of protecting trade has been haunting the global economy since the US President Donald Trump came to power, and it was one of the reasons that affected many countries, especially China and the European Union.

The role of the World Trade Organization in this dispute was not prominent, as the issue was handled exclusively by its member states, as well as addressed during the G20 economic conferences, as well as the conferences of international financial institutions (the International Bank and Fund).

Trade crisis
In the context of the open scenarios of the Corona crisis, it is not possible to accurately predict how countries will be able to control the epidemic and move to the normal functioning of economic activity.

As a result of the negative repercussions from stopping the movement of internal and external movements, and limiting the movement of global means of transportation, some countries have finally moved to make decisions that affect the global trade movement, including negative repercussions on the food situation in the world.

Among these measures, Egypt took, for example, a decision to stop exporting all legumes for a period of three months, beginning in late March 2020, and Vietnam, the third largest rice exporter, also announced its intention to take steps to limit its rice exports.

Kazakhstan - the ninth largest exporter of wheat - took the same step in terms of its wheat exports, as it started taking measures to reduce its exports, which are natural measures in light of crises. Before, Russia did so in 2007 due to the climate change crisis.

Arab countries
And if this wave of decisions escalates, especially with regard to food commodities, the Arab region will be one of the most affected areas, as it depends on importing food in a large proportion.

According to the statistics of the 2019 unified Arab economic report, the food gap for the Arab world amounted to about $ 35 billion.

The position of non-oil Arab states may be worse, because they lack the financial resources to meet their needs adequately, which means that they may be satisfied with less quantities than their needs, or that they will be forced to borrow in order to provide food.

In this context, the foreign trade value of Arab countries is expected to decrease in 2020 by a large percentage, due to the collapse in oil prices, as oil represents approximately 64% of the total Arab exports, and this will have an impact on the performance of inter-Arab trade.

It is no secret to anyone about the bad economic and political relations in the Arab region. Talking about a project of Arab economic cooperation is one of the most difficult matters, in light of the interstate wars in the Arab region, or civil wars within several Arab countries.

But perhaps a state of awakening afflicts Arab governments after the Corona crisis, which calls on them to work seriously in activating the Arab economic cooperation project, and to provide the political will necessary for its success.

Trade agreements
Globally, the Corona crisis caused the suspension of many industries, in light of the economic and trade policies adopting what are known as production chains, as production requirements or spare parts could not be transported, which confused the work and manufacturing movement, which will push countries to focus on establishing full manufacturing rings within Its limits.

As for the World Trade Organization, you will find that their agreements are merely ink on paper with regard to customs barriers, which many countries will resort to to protect their domestic industry, which is not a new approach.

It is expected that the pillars of the European Union will crack during the next stage for economic and commercial reasons, resulting from the repercussions of the Corona crisis, especially after Britain's exit from the union, and expectations that other countries will follow the same path soon, and without a doubt this will have an impact on the path of free trade, and will be a motive for resorting to commercial protection. .

But in light of the current experience and the existence of interests for some emerging countries, especially China, it may seek with some countries to continue to work on the principle of free trade, albeit incompletely as was the case under capitalist globalization.