Mobility Worst Affected by Restriction
following Covid-19
A new information note published by the WTO
Secretariat highlights how trade in goods and services has been affected by
temporary border closures and travel restrictions linked to the COVID-19
pandemic.
It describes how 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.
The paper notes that sweeping travel barriers introduced in the
early stages of the pandemic have given way to more fine-tuned policies aimed
at allowing through “essential” foreign workers, or creating quarantine-free
“travel bubbles” among partners. Nevertheless, mobility barriers have had a
particularly heavy impact on tourism and education services, as well as on
trade in goods, due to their effect on transport services and on information
and transaction costs.
The paper notes that international cooperation has a potentially
important role to play in minimizing the economic impact of mobility
restrictions. For instance, exchanging information on lessons learnt about
mobility restrictions and trade could help WTO members foster greater
resilience in the face of future crises. Such an exercise could help with
identifying options to implement travel measures that meet public health
protection objectives while minimizing the negative effects on trade.
·
International trade and
investment have always relied on the cross-border mobility of individuals.
·
To contain the spread of
COVID-19, many WTO members imposed temporary border closures and travel
restrictions. The severe restrictions on cross-border movement are not
motivated by trade considerations but by public health reasons. Nevertheless,
they 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sweeping travel barriers have been replaced by more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. COVID-19 has triggered an unprecedented crisis for the
tourism sector. 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-overs 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.