The Pandemic and the International Trade: A Brief Analysis

In our day to day life, we use various products which are not manufactured in our country. But how do all these products reach us? How do we know that the products we are using have legal values or not? So to maintain the legality of these some laws are drafted and these laws are named as International Trade law and this law deals with the trade of goods and materials among nations. This article not only aims to give insight about what is International trade law but also aims to present a brief analysis on the current scenario regarding international trade and contracts made between countries.  Also, the recent COVID-19 pandemic caused a huge trouble in the commercial sectors and this article attempts to give few details about how International Trade law is dealing with this situation.


The International law deals mainly with two major sectors they are the Public sectors and Private sectors, dealing with private sectors means dealing with the individuals of different nations and dealing with public sectors means dealing with the different nations or countries.  The main motive of International Trade Law is to let different states perform free trade internationally, which means where buyers can buy quality commodities at a reasonable price and a seller can sell his commodities at a highest possible price and also at any place where the seller thinks he will achieve highest profits. The word free trade implies that any individual should be free to buy or to sell any goods or commodities all across the world with a reasonable profit. Few steps were decided to evolve the idea of Free trade; they were bilateral agreements to reduce tariffs, agreements to reduce non tariff barriers and manage the modern problem which is globalization, there are three kinds of globalization:  political globalization, cultural globalization, and economic globalization. The steps decided to evolve the idea of free trade were actually the issues faced by the nations while performing free trade and hence it became difficult for the nations to follow those steps in a proper manner, especially the issues faced by the developing countries. 

But how are the nations now overcoming those issues? To know the answer of this raised question, it is necessary to know about the historical background of the agreements made.

Historical Background 

After the second world war the economic condition of the whole world aggravated. It became more difficult for the countries to follow those steps and that was the reason why free trade was not evolving. Many organizations were created after the Second World War so that the people don’t face any other war like that; organizations like League of Nations, United Nation, etc were created. An organization named International Trade Organization was also formed to promote free trade among countries, and this was proposed by Bretton Woods. A conference regarding the International Trade Organization took place which is known as the Havana Conference, where 53 countries out of 56 signed the Havana Charter to approve the International Trade organization. But the United States didn’t sign that charter. As many countries are dependent on the U.S. now, many countries were dependent on the U.S. at that time too. Also the Second World War ended with the help of the U.S. so without the United States, the International Trade Organization became a complete failure. After this, several negotiations started to take place to find another way so that the countries can perform free trade across the whole world. In 1947, an agreement took place to promote free trade among nations; the agreement was GATT, which means General Agreement on Trade and Tariff. The GATT came into existence on January 1, 1948. This was the only agreement which used to look after the trades, made rules regarding international trade, after the failure of the International Trade Organization [*Note: GATT was not an organization , it was an agreement]. During this General Agreements on Tariffs and Trades, eight rounds of conference took place to negotiate tariffs and trades they were:

  • Geneva (1947), this was the conference where GATT was proposed and was signed by 23 countries on October 30, 1947. 
  • Annecy (1949), this conference took place to negotiate about reducing tariffs, 13 countries participated in this conference.
  • Torquay (1950-51), This was also about reducing the tariffs, 38 countries participated in this negotiation
  • Geneva (1956), this too was to negotiate the tariff reductions, 26 countries participated in this. 
  • Dillon Round (1960-61), another Tariff reduction negotiation, 26 countries participated. 
  • Kennedy Round (1962-67), in this round of conference , negotiations were made regarding the dedicated use of anti dumping laws, 62 countries participated in this round
  • Tokyo Round  (1973-79), in this round of conference, negotiations were made regarding the dedicated use of Non tariff measures, 102 countries participated in this round
  • Uruguay Round (1986-93), this was the last round of the GATT, 123 countries participated in this. It is said “GATT gets a permanent home” after this round. 

After the end of the Uruguay round, a new organization was formed to promote free trade among nations and that organization is the World Trade Organization. This agreement of creating this organization took place in Marrakech. On 15th April, 1994 the Marrakesh agreement was signed and the WTO was formed. On January 1st, 1995 the WTO came into existence under the Marrakesh agreement and it completely replaced the General Agreement on Tariffs and Trade. New negotiations regarding international trade were made under World Trade Organization. The World Trade Organization is the only organization which looks after the trade practices among different nations. There are several rules and policies which every country should follow. The World Trade Organization has three basic principles:

  • Most Favored Nations
  • National Treatment
  • Transparency

These are the most important principles the WTO follows to increase free trade among nations and to create an open market. The Most Favored Nation is the most important principle which states there should be no discrimination among countries during trade business for example , if one country is reducing tariffs for another country then that country should have to reduce tariff for all the other countries and by this way there will be no discrimination. And it is necessary for every country to follow these principles. 

Current Scenario

The noble corona virus pandemic affected the lifestyles of people staying all across the world. The world now is facing a huge health crisis. The world economy is hugely affected the laborers and daily workers are facing huge problems during the pandemic as their daily earning was hugely affected. It is said that the labor workers are the main victim of this pandemic. The unemployment rate increased in the last few months especially in the developing countries. Not only the economies of countries are under tough situation but also the social and political sides of the countries are facing a lot of difficulties. The developed countries like the U.S., U.K. Germany, France, Italy are facing a huge economical crisis. 

Experts say that this pandemic will not affect the global trade permanently. But there will be a temporary tough situation which needs to be handled passionately to avoid future loss. Many countries restrict exports from other countries to protect their citizens, and these export restrictions can create a huge loss in international trade. Loss in the sense that not every country can manufacture the same goods one country can manufacture masks but one country cannot so this export restriction will end up not benefiting even the citizens of that country also because increase of market value of that particular commodity can reduce the sale of that particular commodity.  In the past few years China made its own position very crucial in the global economy. Many countries are dependent on Chinese products. Nearly 20% of the international trade products are manufactured in China. And it is assumed that disruption in Chinese product supply can affect many countries. But many countries are restricting exports from china especially, because the outbreak started from there itself and so as to stop the spread more and more these few steps were taken by the governments of different nations. Research also says that the pandemic can make the GDP fall by 2% in the developed countries and 2.5% in the developing countries. Research also says that the Chinese GDP will fall by 3.5% as it is assumed that China will be more affected by this pandemic. It is also expected that the international trade will decrease by 2.5%. WTO is assuming another financial crisis just like the crisis occurred in 2008. The pandemic will impact globalization hugely and also it can last for a few upcoming years.     


The whole aftermath of the pandemic is dependent only on a few assumptions and predictions because this is the very first time the world is facing such a tough situation. The only positive thing we can expect from this pandemic is that the world from now on will be more cautious than before. The sixth director general of the World Trade Organization, Roberto Azevedo says that everyone working in the WTO is working more than they usually do; they are trying their best so that no one faces any crisis in trade matters. They are also collaborating with other organizations so that they can be more aware of the situation and find a solution to solve the tough situation the world is or will be facing. 


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