We are pleased to announce the publication of two new TWN Briefing Papers that analyse the trade and finance nexus with the COVID-19 pandemic, with some policy options.
1. Covid-19 reveals everything: The intertwined health and economic crisis calls for urgent responses, systemic reform and ideological rethink of the international financial architecture by Bhumika Muchhala
“The Covid-19 pandemic reveals how fractured and precarious the hegemonic economic structures and norms are. Institutional power imbalances and the primacy of the financial economy over the real economy havegenerated exponential inequalities, economic and social rights violations, an unequal gender division of labour, climate change, migration and refugees, and the transgression of planetary boundaries, among other failings. The distributional function in the international financial architecture is wholly inequitable, while decision-making structures tend to reflect geopolitical realities dating back to the post-World War II era. This results in a tragic reality where even in the midst of a pandemic, countries are competing for scarce resources.
The way forward must entail both a resuscitation and a reboot, one rooted in the principles of equality, rights, historical responsibility, feminist and ecologically just values, and international cooperation and solidarity.The way forward needs to encompass two imperatives. First, urgent responses to an economic recession of historic magnitude are needed through a renewed and strengthened multilateralism for health and economic recovery in developing countries. Specific policy actions have been outlined by UNCTAD, global civil society and progressive academics and analysts. Second, there is a need for systemic and transformative change to global economic and financial governance and policy paradigms consonant with the reality of climate change. Such systemic reform must tackle unregulated finance and corporate power that is single-minded in pursuit of profit without accountability for social and environmental harm and abuse.”
2. Covid-19: Trade policy choices for developing countries during and after the pandemic by Ranja Sengupta
“Trade remains a critical part of this scenario since the movement of goods and people across national borders, especially dictated by the current global trade framework, has contributed much to the spread of Covid-19. But trade also matters for the policy choices to deal with the crisis. The solutions mooted by key institutions and countries in terms of trade policy choices under these circumstances thus require careful analysis …
It is clear that Covid-19 is already ushering in an era of deep changes in economic policies worldwide. Trade policy will need to be reshaped in response to, and following, not preceding, the needs of domestic development objectives and macroeconomic policies. In such times, developing countries will need all the tools and policy space at their disposal to effectively implement trade, finance, intellectual property and other policiesthat best suit their needs.In this scenario, to attempt to liberalise key sectors in the name of combating the pandemic by espousing the “free market” as the ultimate solution, is to repeat the mistakes of the past. History, and recent history even more so, has clearly shown there is no “free market” nor “free trade”. Those with economic power will dictate, and developing countries and LDCs need to develop at least partial self-reliance in key products.They need to retain and not give away their policy flexibility in order to survive; abstaining from making further commitments in trade deals may be the best option until the world arrives at its new normal.”
The paper focuses on two issues: export restrictions and tariffs.