WTO alert on probable increase in trade costs
Geneva, Aug 14 (Prensa Latina) Travel restrictions related to the Covid-19 pandemic could cause alterations in trade costs for a prolonged period, an authorized source determined today.
According to the report of the World Trade Organization (WTO), maritime and land transport have remained functional since the beginning of the health crisis, but air cargo was seriously interrupted, with a reduction in capacity at the global level of 24.6 percent in March 2020.
For this reason, he pointed out, affordable services that depend on the physical proximity between providers and consumers, such as tourism, passenger transfer or maintenance and repair services, are adversely affected by movement limitations and experience a prohibitive increase in commercial costs.
Business travel disruption, which plays an important role in the establishment and maintenance of trade relations, as well as in the management of global value chains, affects both commercial and professional services and manufacturing production, added.
So, the WTO elaborated estimates suggest that trade policy barriers and regulatory differences account for at least 10 percent of costs across all sectors.
Furthermore, high levels of uncertainty magnify the impact of costs on international trade, reduce firms' appetite to invest, and may result in a contraction in trade finance that is likely to be priced especially high in emerging economies and in development, he concluded.
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