International

After the Chinese blockade, is Europe's turn to lockdown

Hygiene & Biosecurity

The increasing number of coronavirus cases is threatening the global economy and may start a recession in the EU.

Posted on Mar 13 ,04:45

The global trade is facing heavy winds as the coronavirus epidemics started in China is going to create a whirlwind that could wipe out between $1,000 billion and $2,000 billion from the global economy, according to the latest UN CATD estimates. Even if the situation in China looks far better than a month ago, the virus is now spreading fast across other regions and raises new obstacles in trade, creating waves of uncertainty and panic even in the EU single market.

Italy has been the first country to lockdown in front of a severe coronavirus outbreak. By now, only modern retail and some hotel restaurants have remained open limiting the food import volumes to the country and blocking some exports as well. However, the chain of supply is capable to cover the domestic demand, although shipments to other countries are hampered by procedures for containing COVID-19 taken by different EU member states. " At the moment the distribution of products on the domestic market is guaranteed without interruption, and there are no problems in the supply chain of raw materials.
On the other hand, it is difficult to transport our products to Northern Europe because of Austria's procedures for containing covid 19. In particular, temperature measurement to all truck drivers from Italy created lines up to 100KM at the Brennero border.

Difficulties in the delivery of goods to different Eastern countries were also highlighted, because of restrictive measures put in place to enter those countries," mentioned Laura Falasconi from the Economic Office of ASSICA Italy.

- Spain and Greece have decided to postpone trade fairs in their countries due to a possible exposure to infected visitors from around the world and a spike in coronavirus cases reported over the last two weeks. FOODExpo Greece that was scheduled in the first half of March has been moved in Hune and Alimentaria Barcelona is going to be held in September.
However, in Madrid, one of the Spanish areas that were hit by the coronavirus outbreak, the market still receive food supplies on a normal-day basis, according to Mercamadrid Twitter posts. The same situation of undisrupted supply chain of food, meat especially, is confirmed in the Basque Country by Marcel Martin, the owner of a butcher shop in the region. Nevertheless, exports of meat to France and Italy have suffered in the last few days, with transportation obstacles raised in front of Spanish importers due to preventive measures taken to stop the virus from spreading.
- Ireland has decided to follow Italy's example and to lockdown until March 29. So far, the authorities have announced a plan to secure the supply chain for the local retailers but the horeca industry is expected to take a hit. Several other countries such as Hugary, the Czech Republic, Poland and Denmark has also shut down their borders or applied restrictive measures for travellers and transporters. France is still considering to do that in the next couple of days.

• In the US, animal breeders are worried about the lack of personnel in their farms due to preventive measures adopted by the federal government and the decision to close schools.
  "The specter of market-ready hogs with nowhere to go is a nightmare for every pork producer in the nation. It would result in severe economic fallout in rural communities and a major animal welfare challenge," said National Pork Producers Council (NPCC) President Howard Roth.
  At the same time, exporters who are waiting for compliance certificates for their products (including food) must wait until further notice, as US Food and Drug Administration announced that "is postponing most foreign inspections through April, effective immediately. Inspections outside the US deemed mission-critical will still be considered on a case-by-case basis".

A preliminary downside scenario from the UN experts sees a $2 trillion shortfall in global income with a $US220 billion hit to developing countries (excluding China). The most badly affected economies in this scenario will be oil-exporting countries, but also other commodity exporters, which stand to lose more than one percentage point of growth, as well as those with strong trade linkages to the initially shocked economies.

In its downside scenario, presented Wednesday in Geneva, UNCTAD sees a $2 trillion shortfall in global income, as “business as usual” is no longer an option in a world ruled by quarantine in front of coronavirus outbreaks. "We need to rethink the system, diversify production and shorten value chains," said Isabelle Durant, deputy head of the UN's Trade and Development Organization.

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