The Impact of COVID-19 on Production and International Trade

This essay delves into the profound impact of the COVID-19 pandemic on global production and trade. It examines how the pandemic has disrupted manufacturing processes, including raw material supply, workforce availability, and financial constraints. The essay explores the external factors affecting organizations' trade, such as government lockdown decisions, and the resulting economic downturn. It analyzes the decline in global trade predicted by the WTO and discusses how government policies, like those in India, may mitigate the negative impacts. The essay also addresses the long-term consequences of decreased demand, changes in trade policies, and the potential for trade wars, emphasizing the importance of understanding these dynamics for economic recovery and future trade patterns. The analysis includes the impact of COVID-19 on specific sectors, such as services and electronics, and suggests that the severity of the impact depends on the duration of the pandemic, the stability of economic growth, and the effectiveness of government support.

How global pandemic covid 19 may
impact on production and trade
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Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Impact of Covid 19 On production Process in Manufacturing Organization..............................3
Factors that can Affect the Trades of Organizations...................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Now a days the hot topic which is been discussed at global level is covid 19. It has highly
impacted on lifestyle of people and countries. Also, it has negatively affected on growth and
development of entire world. This pandemic is increasing day by day and making it challenging
for all nations to deal with it. It has not affected socially but also economically. Due to it GDP of
both developed and developing countries is negative. Moreover, every nation has been affected
due to this pandemic. It is estimated by world Bank, IMF and other organizations that there will
be a high recession due to it. This will not worse than which came in 2008. In this essay it will be
described about how covid 19 will impact on production and trade.
MAIN BODY
Impact of Covid 19 On production Process in Manufacturing Organization
In different manner an infectious disease can affect the complete manufacturing sector. This is
highly difficult for business organization who are operating in manufacturing sector. This is not
possible for a manufacturing sector organization maintain continuity in condition of infectious
Pandemic. In different ways this kind of infectious disease can affect the manufacturing
organization to keep their manufacturing plants running in condition of pandemic. There are
different factors that can affect the operations of the organization which can affect the
productivity of the company in internal operations. There are some internal and external factors
that can affect the performance of the organization in market place (Yu and Aviso, 2020). The
internal factors can affect the production of the organization and external factors can affect the
work force of the organization in different manner. Pandemic can affect various things that are
related to production of organizations.
Interruption in the supply of Raw Material
This is main problem with the supply of raw material in the organization to maintain
continuity of production in organization. Due to the pandemic this is difficult for the
organization to maintain the continuity supply of raw material. Organization may face lack of
transformation and lack of logistic facility that can reduce the supply of material for the
organization to produce as per the requirement of the goods. This is how pandemic can reduce
the production process of company.
Lack of Work Force
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The main challenge for the organization to manage the large number of work force in
organization in order to maintain the operations of the production organization. In the condition
of the pandemic this is highly difficult for organization to hire required number in th production
plant of organization. This is how lack of work force can affect the production process of the
business organization.
Risk of Infection
The infection risk is most critical for organization and the employees they have to
maintain the production process. In the condition of Covid 19 Pandemic empoyees of
organization can be easily infected with virus and they could infect other people who are
working in organization. This is how risk of infection can prevent the organization to work with
complete strength in order to maintain effective performance standard in production process.
Lack of Fund
For the production of goods organization needs enough amount of capital to provided salary to
the employees along with maintaining availability of resources that can be used by the
organization to effectively maintain the production unit operations of the company in the
condition Covid 19 Pandemic most of the markets around the world are under lockdown
condition where people are not allowed in the market place (Şahin, 2020). In this kind of
situation the demand in market place is not that high and organization will not be able to
generate enough revenue from market place. This condition will lead to lack of financial capital
to the organization that are interrupt the production plant of the company.
These how there are various factors in condition of Covid 19 pandemic are there that can
reduce and affect the production process of company. These factors are also associated to the
decisions of the government regarding lockdown that can prevent the organization to conduct
their operations in market place.
It has been analysed that with the emerge of covid 19 in January from China it rapidly started
spreading to other countries. From Asia it entered into European countries such as Italy, Spain,
France, UK, etc thus countries has to take decision of lock down where economic, social and
other activities were banned for specific time period. However, disease also spread into US and
other countries. So, with that the trade and economic growth is highly affected. However, as
trade depends on fiscal and monetary policy, it is important for government to form it
accordingly to future prospects. Moreover, government need to support business and companies
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in overcoming impact of pandemic. So, if they fail to do so then it will affect on it. But due to
covid 19 many countries have spent billion of money to save life of people. On contrary due to
lock down of economic activity there is no source of income for nation. Apart from it, many
companies will loan in order to deal with expenses. This will put burden in bank as well.
Therefore, it will require long time for businesses to trade and produce products. But the demand
will remain decrease as money will not be rolling within economy. But restrictions on movement
and social distancing to slow the spread of the disease mean that labour supply, transport and
travel are today directly affected in ways they were not during the financial crisis.
WTO expect that the trade is going to be fall by 13% -32% due to global pandemic crisis. This
decline will also be observed in 2021 but it depends on economic activity and policies. WTO
stated that in order to plunge. Also, the impact will depend on what type of policy or decision are
taken by government and countries to trade at global level. It has been estimated that there can be
either two scenarios in trade and production. First is that there will be high growth in it in second
half of 2020 and second is that more decline in trade due in same year. But they depend on what
type of trade policy is formed and how other countries deal with it at global level. Here, for
instance India has formed a policy to attract foreign investors and companies to operate in
country. For this they will be giving relaxation in tax and other benefits. Thus, many US and
other countries organization are showing interest in coming to India. This can be explained by
the fact that recently in Jio, Facebook and Vista equity Us based firm invested in it. This shows
trade by US in Indian economy. So, for Indian economy there will be less impact on trade and
production as compared to other countries.
Moreover, there will be a great impact of pandemic on production and trade. This is because
there will be change in economic policy and procedure of trade. Alongside, government will
develop new policies and guidelines of working in industry and workplace. Due to it, the
production will be less as compared to previous times. In both developed and developing nations
there will be low demand of products. It is because people will does not enough income to spend
of those things to buy. Furthermore, at global level there is lock down so there is no rolling of
money. Due to it, demand will not be generated within market. Hence, there will be no
production. Besides that, only production of essential goods will be there which fulfill daily
needs of people.
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However, in terms of trade it is stated that countries who are contributing in trade will be
affected. The overall process of trade among nation will change. With less production the the
import and export will be less. Also, nation will likely to trade with those countries whose
economic growth is stable or develop. This is because it will both in rise in economic growth.
But with global pandemic covid 19 trade between countries will decrease to a great extent. Here,
an example can be taken of US and China. As US think that the virus spread from China so they
have already decided not to trade with them in future. Therefore, now many US companies will
be shifting from China to other nations. Thus, it will to creating a trade war between them and
this will affect at global level.
In addition to it, the impact also depends on in how much time pandemic is controlled by
countries. This means that if it is controlled quickly then in many regions the figures of trade will
be double till 2022. It is because those regions export energy product which is needed by all
developing nations. In addition, trade will be highly affected due to value chain as well. Those
business who are having complex supply chain will have to rely on how they deal with it. It is
because due to steady growth of trade and low demand supply chain will not respond quickly and
in effective way. As China is hub for electronic products trade is to be rely on other things.
Services trade may be the component of world trade most directly affected by COVID-19
through the imposition of transport and travel restrictions and the closure of many retail and
hospitality establishments. It is expected that pandemic impact will be adverse than as compared
to in 2008 recession.
In production as well there is high decline in it due to global pandemic covid 19. It is because of
low demand generated within economy and decrease in buying power of people as well as
supplier. As many nations will be dealing with boosting of economic growth and even if
government provide flexibility in production. Then also companies and industries will not be
able to produce products. As demand will remain low due to lock down of economic activity and
there is no source of income for people. Moreover, closure of many industry and high losses it
will affect on demand generated in economy. If there will be demand then no production.
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Likewise, if trade is low then it adversely impact on production. Basically, those regions will
suffer in this who are majorly production nation.
However, impact of production will depend in to what extent economic activity is restricted and
also on how much financial support is given by government to production industry. There will be
high change in trends in production. Those regions whose economy rely on service industry will
have low impact as compared to other. The resulting drop in demand, due to the imposed
restrictions on movements of individuals, combined with concerns about health and safety of
employees has led to factory closures which will adversely affect operations of entire companies.
In this case China will have a full cycle of the epidemic, manufacturers will deal with negative
consequences one is due to lockdown and second the drop in demand from customers further up
the many value chains that its economy commands and contributes to. If other global GVC hubs
experience similar trajectories the cumulative effect of supply bottlenecks and falling consumer
demand may indeed increase the risk of global manufacturing entering a downward spiral,
possibly causing significant damages to operations of many cross-border supply chains. As
lifestyle of people will change it will result on low demand of goods. So, overall in economy
demand will be low.
Those nation producing steel, aluminium, and other products will not face severe consequences
due to low demand. Apart from it, with new norms and guidelines there will be minimum labor
working within industry. Thus, it will led to less production. At global level the impact of
pandemic covid 19 will be on small and medium size enterprise who are engaged in production.
It is because as already there was no high demand in market they suffering from loss and low
profit. There will be adverse impact on European countries as they will be facing high
consequences due to it. They will have to trade not within Europe but with other nations. Also,
demand of products within market will be low as compared to developing regions. Business
operating within those will find it difficult to sustain and in order to generate demand they will
have to trade in other countries. The impact will remain for long time but it can be minimized by
generating demand in the market and fulfilling it. Many underdeveloped region will remain poor
in future. Those can emerge as new develop by trading and producing products. Thus, pandemic
will force government to deal in trade and provide financial support to industry for increasing
production. But overall the impact will result in high downward steep of curve.
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So, it is evaluated that tis pandemic will leave a long term crises and affect on global trade and
production. The developed and other regions will require time to overcome this. Henceforth, it
depends on government that to how much time they put restrictions on economic activity and
what changes are done in monetary and fiscal policy to support business and industry. If there is
quick action taken against it then in 2022 there might be high growth in trade within nation. The
impact will vary on region as well and on action and measure taken by government to deal with
it. Besides, it will depend on trade policy and how nation are dealing with it. Henceforth, it is
necessary to analyse and predict that how pandemic covid 19 will affect in future. Then,
accordingly measure can be taken in quick time. Alongside, for some developing regions there
will be limited impact on trade but negative on production. Due to it, the production will be less
as compared to previous times. In both developed and developing nations there will be low
demand of products. It is because people will does not enough income to spend of those things to
buy. Furthermore, at global level there is lock down so there is no rolling of money.
Now, trade agreement within nation will change. They will deal in different ways with various
nations. Also, WTO will develop new policies where each nation will have to deal in fair way
with others. There will be more support given to under developed nations. Besides that, each
nation will try to gain and engage in trade to a great extent. This will be done to boost economic
growth. However, countries depending on China will now deal with other nations. There will be
more trade deals as compared to previous crises.
Factors that can Affect the Trades of Organizations
There are various factors in Covid 19 pandemic can affect the sales and trades of
organization in market place. There are different trades are made by the organization in market
place. These trades are mostly performed in the market place. This is not possible for the
organization to complete business trades in market place with pandemic situation. Most of the
organizations are failing to perform efficiently in market place and earning effective profit to
maintain business operations. This is highly difficult for the organization to maintain the
development of goods and services (Busin, Yu and Ponzin, 2020). This will be highly difficult
for the organization to develop trades in market place with challenge of preventing each type of
medical and infection risk in the trade process. There is also huge risk of failing requirements of
trade deals due to uncertain conditions in market place. These uncertain conditions in the market
place can affect the business operation so of the organization in market place
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Most of the organizations are facing major issues with their performance in market place.
The main objective of the organizations is to maintain their current positioning in market pace to
retain their profitability in market place. Their major concerns are along with their current deals
or trades that are running under process and complete the norms of these deals in order to
prevent the losses and legal issues in market place. This is how it is highly difficult for the
business organization to go with new trades in market place with other organizations and
retailers who are providing services to the target audience. This is how it is most difficult
condition for the business organization to complete older deals and perform new trades in market
place. These is how Covid 19 Pandemic can affect the business processes and trades of
organization in market place.
CONCLUSION
These report is concluding the impact of infectious disease on the production and trades of
organization in market place. There are various factors that are related to the business operations
of the organization has been studied in the study in order to evaluate he issues that could be faced
by the business organization in order to gain higher business proficiency in market place.
Various challenges that are faced by the business organization in market place has been studied
in report that can affect the sales, production and business trades of organization. Impact of all
these factors has been effectively studied in market place to evaluate the business conditions of
organization.
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REFERENCES
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are worst possible response to safeguard food security. IFPRI Blog: Issue Post.
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