Question

Challenge: Single-country sourcing

The purpose of this assignment is to understand current challenges to international trade in the context of COVID_19 pandemic and to identify the practices to reduce or eliminate the challenges. You are required to demonstrate in-depth understanding and analysis of the given topic by including challenge background, how this challenge will affect the Australian trade with other countries, and recommendations to reduce or eliminate the challenge.

Question: Describe the background of the challenge (400 words)

Answer 1

CHALLANGES TO INTERANATIONAL TRADE IN CONTRAST OF COVID 19
Decline in GDP and increase of debt - An almost 13 % decline in global GDP .Moreover the costs to the global economy from support packages , through central banks and fiscal actions , are very significant and likely to have long - lasting and complex effects on management of sovereign and corporation debt. Most major economies are likely to enter recesssion ,annd more scenarios cannot be discounted.
Scale and Pace of Infection - for how long widespread shutdown measures will prove necessary , the prospects to better manage systems ,allowing health service to focus only on the most serious cases and the risk of second wave infections as the virus moves around the globe.
Need to keep trade flowing - to ensure the supply of essential products and to send a signal of confidence for the global economy.Trade is essential to save both lives and livelihoods.
To build co-operation and trust- The market will supply essentials , that countries will not impose export restrictions , and that imports do not pose health risks .This is a particular challenge at at ime of trade tensions, where the international trading system was already subject to an increase number of new restrictions and distortions .

SOLUTIONS
1. Boost the confidence in trade and global markets by improving transparency - A strong , shared , transparent information base is crirtical in underpinning sound national policy responses and the international co-operation to keep terade flowing .It will be critical that countries honour their commitments to notify trade realted measures taken in response to COVID-19 to the world trade oraganisation (WTO).
2. Keep global supply chains goingh , especially for essentials - An important priority is keeping the key supply chains for essential goods for the crisis including medicalsupplies, food products and ICT goods and services -open and functioning . For eg-
* Cancellation of passengers flights linked to travel bans has liimited the availability of air cargo.
* At the time the virus struck ,Large numbers of shipping containers were in Chinese ports, and restrictions on their movement have loed to a shortage that has seen the price of containers rise.
An the immediate issue is facilitating medical supplies necessary to tackle Covid 19 ,many of which are produced acrossa a number of countries an for which tarade is the means of ensuring global supply.
Keeping trade in essential medical supplies flowing means removing trade barriers such as tarrifs on meduical goods essential for comabting COVID 19.
Expeding certifications procedures to allow new products to be traded as soon as possible and ensuring that technical requirements are science based and do not unnecessarily restrict tarde.
Enhanced trade faciliatation - to kepp moving as quickly as possible identify key actions neede to ensure smmoth customs procedurs with limited human interevention.
There is aneed to rensure that food supply flowws to quarantned areas and that appropriate biosecurity arrangements are in palce , equiring changes to how food is produced consumed and distributed.
3. There are many unavoidable costs in the current costs in the current pandemic , Chief amonfg these is the need to avoid export restrictions on essential goods , such as medical equipmnet and , especially food produucts.
Export restrictions are arecipe of a self inflicted harm ,Undermining food security for everyone. Experience has shown that export restrictions temporarily lower domestic prices and raise availability, but they also discourage domestic production an dso any benefit tends to be short lived.
Export restrictions risk undermining confidence in interanational markets and can precitipate hoarding and panic buying .Ultimately nobody benefits.
Increase the overall global supply of essential medical supplies for combatting COVID 19
avoid further escalation in ongoing trade tensions

IMPACT ON AUSTRALIAN TRADE

Shrinking GDP- Australia will have to face a recession .The IMF expects the real GDP to shrink by 4% throughout 2020.
The sectors affected mosts are tourism hospitability, education universities and schools ,Agriculture, wholesale of basic materials , housing and real state
Trade barriers- A trade impediment is represented by the reduced air cargo capacity to from Australia due to the ban of passengers flights usually carrying most of the airfreighted goods to Australia .All deleivery couriers suspended their service . The Australian Government alloacted funds to increase the number of cargo flights to support exports. Ships can eneter Australian ports to unload the cargo
MEASURES TO RELAUNCH AUSTRALIANJ TRADE
* The Australian government provided financial comfort to businesses
* The assistance to individuals include income supportt , payments to support households ,and temporary early relaese of superannuation
*the government aims to at supporting busisnesses to amnage cash flow challenges AUS$100,000 was invested.
* The Reserve Bank of Australia approved a cash rate ct to 0.25%down from 0.75%.
*RBA has put in place a compehensive package to lowe funding costs and support the supply of credit to the economy.