Digital Trade in COVID-19: Trends, Opportunities, and Challenges for Commonwealth Countries

This report analyzes the potential effect of COVID-19 on global and intracommonwealth goods and exports services, shedding light on the importance of digital trade and its trends, opportunities, and challenges for Commonwealth countries. It discusses the impact of COVID-19 on trade and supply chain management, the prospects for trade recovery, and the challenges faced by digital trade, including legal, transportation, and supply management challenges. The report also highlights the significance of the African Continental Free Trade Area (AfCFTA) and its inclusivity and transformative potential.

Digital Trade in COVID-19
Critical issues in business and management
Table of Contents
Introduction ................................................................................................................................................1
Digital trade and its importance .................................................................................................................2
Trends ....................................................................................................................................................5
Opportunities ........................................................................................................................................6
Challenges .............................................................................................................................................7
African Continental Free Trade Area (AfCFTA) ............................................................................................8
Significance ............................................................................................................................................8
Inclusivity and transformative of AfCFTA ..............................................................................................9
Conclusion ................................................................................................................................................11
References ................................................................................................................................................12
Introduction
The Commonwealth is a varied collection of 54 nations extending from New Zealand's
east coast to the western Caribbean and South America (González and Jouanjean, 2017). This

report will be analyzing the potential effect that COVID-19 will have on the global and
intracommonwealth goods and exports services. The report will further shed light on the
importance that digital trade has and the extent in which the trends, opportunities and challenges
that are fulfilled in it. These challenges, trends and opportunities will be evaluated with reference
to its effect on commonwealth countries,
Digital trade and its importance
Digital trade is defined as the international sale or purchase of a good or service over
computer networks using methods specifically designed for receiving or placing orders; it is
defined as international transactions delivered remotely in an electronic format via computer
networks specifically designed for this purpose (Khorana et al., 2021). People are becoming
more aware that the financial effect of COVID-19 may be minimised via digital trading
(González and Jouanjean, 2017). It is critical that governments seeking to revitalise the economy
via digital commerce concentrate on expanding internet access in impoverished states and the
Commonwealth's least developed nations (Verma, and Gustafsson, 2020). More than 80% of the
population in CW-rich nations has an internet connection, but in other CW-rich Asian countries,
such as Sri Lanka, Pakistan, and India, this ratio reduces to less than 30% and less than 10%,
respectively (Abrego et al., 2020). COVID-19 has the potential to increase the Commonwealth's
digital divide and, as a consequence, the digital trade imbalance between developed and
developing Commonwealth nations. In Covid19 times, trade or supply chain management has
affected in the commonwealth countries national income. The viral disease has made government
to attempt the lock-downs in particular counties to protect the human which includes labor,
entrepreneurs and social or community people from the corona virus infection. It also puts the
impact on the workers and owners in turns to domestic demands (Sikder, Zhang, and Ahmod,

2020). During pandemic, government has attempted the restrictions and prohibitions for trade
and supply management as an immediate response to secure the human creatures from the viral
disease.
These restrictions put the direct impact on the commonwealth counties and slower their
movements in business because of reduced and restricted trade services. During the pandemic,
commonwealth countries has reduces their GDP and trade at worst scenarios. Overall, the trade
will reduce GDP growth by 5% in 2020, and in some situation might be 10%. Africa's GDP has
fallen down by 1.4% in the pandemic which puts a huge effect on the trade as well. Government
has restricted and movement the social distancing to slow down the spread of the disease which
affected the labor supply(Crawford, Butler-Henderson, Rudolph, Malkawi, and et.al, 2020).
Trade, travel and even at today, these activities putting the impact and enhancing the financial
crisis in all the commonwealth countries. Along with this, Asia has reduced its GPD by 0.91 %,
America 9.1 % in the second quarter of 2020 and Australia falls by 1.9% during the Covid. All
the countries had a major impact on their financial growth and spotted a financial crisis in these
situations. It has been cleared from above mentioned line that America had a major and huge
impact on the GPD and trade restriction and loses GPD by 9.1 % in the Covid times.
The south and west regions of America were authorities in hard hit areas and affected to
close the business and pausing reopening. Federal reserve chain person has acknowledged that
the country is moving and putting slowdown in the activity. According to this, US central banks
had kept the zero interest or nearby zero to pump the money into the economy. The main reason
behind reducing the GDP and trade activities has been perfumed because of lock-down acts
(Banga, and te Velde, 2020). Covid19 was rapidly spreading over from which government has
decided ans asked to maintain the social distancing to protect human which originated the lock-

down activities. The restriction of trade, business and every small or big organization has
impacted and economic growth of a country. It also increases the rates of unemployment from
which people had suffered from financial crisis. Along with this, because of these function,
America and other countries also enhanced their economic crisis as all the business and
organization were restricted and trade were also not allowed which made an obstacle in cash
flow management in the country and leads to drive the economy downwards.
Prospects for trade recovery
After the Covid crisis, the commonwealth countries now faces the divergent growth prospects.
US and China are shaping the international growth in 2021. Business and organization has
encouraged to drive their occupation widely and industrial production has bounded the most
countries by improving the commodity prices and global trade (Jin, Park, Gupta, and et.al.,
2017). The 2020, Covid crisis was the long-lasting scars on GPD and employment. The US
economy losses monetary policies and pent-up the demand into rapid GDP growth. Business,
organization and inventors are with strong faith and consumption to continue the financial
growth and perform well (Hepburn, Adlen, Beddington, and et.al., 2019). In the short-term
response of trade strategy required to focus on improving critical thinking, and focus on the
important factors to grow and despite global value chain breakdowns. It requires prioritizing,
respond, recover and grow. Trade can be recovered by following these activities which will make
them understand the planning, ideas, action, improvement and grow. Looking at global trade
improvement, it can enhance by building resilience, improve diversification and ingrain the
sustainability acts (Alola, Cop, and Adewale Alola, 2019).
Conceptual framework for digital trade

The conceptual framework that highlights three important characteristics of digital trade:
the nature of the transaction (the "how"), the product (the "what"), and the participants (the
"who"). Figure 1 displays these measures as well as the components that comprise them. The
first column defines digital trade by identifying the kind of transaction involved. The second
dimension, 'product,' distinguishes information from products and services (Wilson Center. 2021).
The final dimension investigates the actors involved; these are depicted below in three categories
for ease of understanding, but could theoretically be defined using the SNA's institutional sector
classification, with additional breakdowns for business size and sector, to provide critical
information on the role (and adoption) of digitalised tools by countries during COVID-19 (Au,
2021).
Figure 1 Dimensions of Digital trade
Trends
There are the number of trends that have emerged as digital trade has increased. Digital
services such as information and communication technology, cloud computing, data processing
and export services that can be supplied digitally such as legal, digital health and education,

financial, and business services are a major trend (Wilson Center. 2021). Another trend is
information and communication technology (ICT) commodities that include computer and
communication equipment and digital goods which are software and videogames (e.g. legal,
digital health and education services, financial, business) (Verma, and Gustafsson, 2020). An
ecommerce site like Amazon is an essential illustration of this (e.g. ordering apparel online
through an e-commerce platform).
A report on the value of digital commerce created new digital item classification systems.
For example, an "enterprise-based" approach to digital commerce is proposed, and future
corporate surveys should include questions on the percentage of purchases made through digital
ordering, broken down by imported vs. domestically produced items.
Opportunities
In Covid19, expansion of digital trade may also assist rural companies, micro, small, and
mediumsized businesses (MSMEs), and women in gaining access to new markets. Digital trade
and the use of the internet marketplace allow Commonwealth SIDS with little financial resources
to interact with clients in distant markets without incurring any start-up or intermediate costs
during Covid. (Escaith and Khorana, 2021). As per Khorana et al., (2021) some Commonwealth
countries, most notably Bangladesh, have seen their exports diversify as a consequence of digital
trade. In Covid, it increased commerce's market access and efficiency may also contribute to the
growth of employment in the IT, postal, and delivery services sectors due to the economic
benefits and cost savings it provides (González and Jouanjean, 2017). As a result, e-commerce
and inclusive finance and payment policies are important to COVID revival (Obeng‐Odoom,
2020).

As more trade is done through digital means, there is a greater need for ICT and ICT
enabled services, which will lead to a rise in demand for cloud computing and data storage in
developing nations such as China and India (Verma, and Gustafsson, 2020).
Challenges
Legal Challenges : Certain challenges are faced as digital trade is being practised. CW
African governments and are falling behind in trade facilitation and logistics, both of which are
important to the expansion of digital trade. COVID-19 exacerbated “border operations”,
“customs cooperation”, trade facilitation, and automation (Abrego et al., 2020). Throughout the
pandemic, trade, customs automation, digital signatures, and financial inclusion have grown in
importance. Furthermore, for digital commerce to be sustainable, a legal framework for it must
be in place (Verma, and Gustafsson, 2020).
Transportation Challenges : The cyclical nature of the digital trade must be considered
when considering the effect of COVID-19 on the sector (World Economic Forum. 2021). For
example, although international transportation, logistics, and border constraints have had a
stronger effect on cross-border ecommerce, domestic e-commerce has grown in many CW
countries, benefiting small and medium-sized firms (SMEs) in particular (Apiko et al., 2020).
Firms all over the globe have adopted different online business tactics, such as utilising their e-
commerce-enabled websites, third-party online marketplaces such as Amazon, or a mix of the
two (Khorana et al., 2021).
Supply Management : Verma and Gustafsson, (2020) demonstrate for the first time how
the Commonwealth's services trade was procured in 2017. As exports account for 75% of all
computer services exports in the Commonwealth (Obeng‐Odoom, 2020). This industry is
predicted to be less impacted by the pandemic than other sectors such as business and personal

travel, construction, and manufacturing services due to its dependence on alternative supply
channels and associated sensitivity to lock-downs and travel restrictions (Abrego et al., 2020).
Government is the best source of way in the future growth of trade. Upper authorities are seeking
the more control over critical supplies and providing the best results to the people. Apart from
this, reducing the risk of diversification of supply chains also help to improve the future growth.
This activity can improve the trade at success. Government can decide the trade between the two
countries without making a difference of diverse culture can make the trade and transposition
business at higher level and also provide the best efforts to grow the economy of a particular
country, it will also support and increase the GDP which will fulfill the cash flow management
and overcome the financial crisis of a country. The commonwealth countries can improve their
trade again without creating a diverse culture and difference between the country and can grow
together.
African Continental Free Trade Area (AfCFTA)
The African Continental Free Trade Area (AFCTA) is a trade agreement that aims to
create the world's biggest free-trade zone by bringing together nearly 1.3 billion people from 54
African countries (Khorana et al., 2021). The accord seeks to create a unified market for products
and services in order to accelerate Africa's economic unification. The trade area's total GDP
might exceed $3.4 trillion, although doing so would involve considerable policy changes and
trade facilitation measures among African member countries (González and Jouanjean, 2017).
Significance
The AfCFTA aims to reduce tariffs between members and includes both policy areas such
as trade facilitation and services, as well as regulatory measures such as sanitary standards and

trade obstacles in technology (Au, 2021). Trade integration in Africa has long been hampered by
antiquated border and transportation infrastructure, as well as a patchwork of inconsistent rules
encompassing dozens of markets (Verma, and Gustafsson, 2020). Governments have often
erected trade barriers to protect their markets from the regional competition, making it more
costly for nations to trade with their neighbours than with those further away (Apiko et al.,
2020). According to the World Bank, countries such Zimbabwe might see income increases of up
to 14 per cent. At the low end, numerous countries, including Madagascar, Malawi, and
Mozambique, would have real income growth of less than 2%. While politicians argue that free
mobility of labour is critical to the success of the free trade zone, not all African countries agree
(Verma, and Gustafsson, 2020).
Inclusivity and transformative of AfCFTA
With the start of the African Continental Free Trade Area (AfCFTA) in January 2021,
hopes for enhanced business opportunities for women-led enterprises are high, allowing African
women to grow their businesses from the micro to the macro-level (Schilirò, 2020). The AfCFTA
Agreement emphasises the need for formal and informal service providers to develop and expand
their export capacity, with a particular emphasis on micro, small, and medium-sized firms in
which women and youth play an active role (Khorana et al., 2021). Furthermore, the AfCFTA
Protocols on Trade in Goods, Trade in Services, Investment, Intellectual Property Rights, and
Competition Policy establish clear guidelines to protect emerging businesses and infant
industries, thereby advancing Agenda 2063's goals of gender equality, women empowerment,
and youth development.
COVID-19 has slowed the flow of commodities, services, and people, causing
disproportionate damage to the poor and vulnerable. Workers and entrepreneurs in Africa's

informal sector, which accounts for 85.8 per cent of the workforce, were disproportionately
damaged by social isolation and stay-at-home orders that saved lives but destroyed livelihoods
(Obeng‐Odoom, 2020). Millions of people may be lifted out of poverty if improved trade and
value chains supported the growth of women's businesses and entrepreneurial endeavours.
Current estimates of intra-African trade greatly understate the significance of informal
merchants in border areas and small businesses dominated by women and youth. Although
intraAfrican trade is predicted to be small—approximately 16 per cent of imports and exports in
2018—unregistered merchants or enterprises handle between 50 and 60 per cent of overall
intraAfrican trade (Verma, and Gustafsson, 2020). Women are the face of informal cross-border
trade in Africa, accounting for up to 70% of informal cross-border merchants.
Workers and business person in Africa's informal sector, which account for 85.8 per cent
of the workforce, have been disproportionately damaged by social distance and stay-at-home
policies that have saved lives but destroyed livelihoods (Savić, 2020). Despite this, women
merchants and the organisations that represent them are seldom included in programmes and
decisions impacting the trade business. Furthermore, studies show that development
interventions aimed at facilitating trade, increasing productivity, and improving competitiveness
in export-oriented enterprises do not reach women. Increasing productivity and reducing
resource inequality between men and women in the trade may change the trajectory of the
AfCFTA, resulting in faster adoption and shared income.
In order to ensure that inclusivity of women are maintained and women and youth-owned
micro and small businesses do not fall behind, governments, regional institutions, and trade
organisations and networks must take three bold policy steps (Schilirò, 2020).

Conclusion
The report has analyzed the importance of digital trade along with its relevant trends and
opportunities. The report further stated the nature of AfCFTA that fostering genuine public
participation in the formation and execution of laws, as well as the building of physical and soft
infrastructure to facilitate the free movement of products and services. They must advocate for
change, raise awareness, and provide a forum for dialogue. This necessitates networking with
competent and prominent women's business organisations and networks.

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