ISSN 2674-8053

Impacts of COVID-19 on European Trade

from the beginning of 2020, the world was hit by a serious health crisis due to the appearance of the new coronavirus, and after its proliferation in China, several countries had to adapt their economies in order to better meet the needs of the population. Among the continents most economically affected at the start of the pandemic, is Europe, which currently has about 1.243.000 deaths.

Among the countries with the greatest number of cases, is italy, that at the beginning of the pandemic, was forced to enter a tough and rigorous lockdown process. Such preventive measure had a curfew, total closing of commerce and prohibition of the movement of people in certain places. Other countries like France and Spain also had a huge prominence for the cases of coronavirus, e, consequently, had to adjust their economy, especially your trade.

For European countries, the commercial adjustment was a long process., which is still happening, since most of them had an economic participation that was significantly dependent on tourism.. That means that, with the decrease in international travel, several stores ended up closing, due to the large drop in the total number of sales, that did not allow several businesses to sustain themselves.

This factor led to a great intensification of e-commerce, which was seen as an alternative for commercial exchange in European territory, as well as in other places in the world. It is worth highlighting the occurrence of great fragmentation between months of the European bloc, regarding the definition of what counts as essential trade, what, during temporary relaxations in several of the countries, committed to preserving a balanced environment in the European single market.

Not dissimilar to the Brazilian situation, the partial opening at the end of the year benefited the retail trade areas, however, the intensity to which these areas have benefited varies drastically from country to country and do not demonstrate sufficient uniformity regarding their positioning, a wrong attitude according to the EU.

Externally, European international trade had a drop., considering the reduction in the arrival of cargo flights due to the pandemic in the most affected countries. In view of Europe as a major exporter, several inputs are now missing on the shelves. Products such as fruits and vegetables from Latin countries, for example, had a significant increase in price, and the demand remained.

The shortage in the supply of various products was also reflected in the lack of European products abroad. Considering the increase in operating cost caused by the need to implement measures against the pandemic and logistical problems regarding the maintenance of the supply chain, especially in the first few months of the pandemic, the increase in prices became evident in the face of the decrease in supply., as prices of certain manufactured products.

In addition, after the start of the pandemic, the European Union lost significant space in relation to Mercosur. Due to the abrupt drop in agreements and trade with the European Union at the beginning of the pandemic, Mercosur started to detain greater attention in trade with China, although there is still a possibility of closing an agreement between the EU and Mercosur. Although some countries such as France are against the agreement, until now there is still the possibility of negotiation.

Regarding non-essential products, one of the sectors heavily affected was flowers in the Netherlands. In view of the fact that tulips are the great Dutch postcard, tulip sales in tourist sites made up a significant amount in terms of tourism., taking into account the reduction in national and international travel to the region. With the advance of the most imminent vaccination on the European continent, the hope of the Dutch tourism sector is to quickly recover sales, counting on the return of the number of tourists before the pandemic.

It is worth noting the occurrence of a second wave of coronavirus cases in Europe, between February and March this year. After proven a new variant in the UK, there was a significant increase in cases of COVID 19 in Europe, causing countries to once again be forced to implement measures to contain the virus. As a milder measure, there was a limitation of hours in which essential commerce is able to function. This measure came into force only in Spanish and Italian territories, in view of the large number of deaths caused by the virus in these two territories, as well as the care difficulties experienced by these two countries..

With respect to Germany, this remained stable both with regard to intra- and extra-bloc trade and with regard to the containment of the virus.. This is due to the fact that it is able to produce respirators and distribute enough vaccines to the entire population..

In the business field, several corporations invested and encouraged in home office jobs, generating a high demand for personal computers. With several parts factories in production interruption, and consequently, a big increase in price,the computer trade in Europe faced a drastic change.

Lastly, it can be inferred that the internal and external trade agreements had a great reduction in the European continent, with reservations in Germany. The bloc's internal trade was strongly affected by the tourism sector, who had an abrupt and unexpected fall. Therefore, the European bloc hopes that the situation will improve and that trade can recover. With the rapid immunization of the population, it can be inferred that until mid- 2022 the situation is already moving to what it was before the pandemic.

Por Prissioni Cesarino Taddone and Thomas Bauer Corsaro

References

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The European Studies and Business Center (NENE) is linked to the Brazilian Center for International Business Studies & Corporate Diplomacy (CBENI) from ESPM-SP. It was created considering the need to stimulate the Brazilian and Latin American academic community to better understand their relations with Europeans, seeking to understand and deepen the Brazil-European Union Strategic Partnership.