Malaysian Economics: Review of the Article 'COVID-19 and Trade Policy Responses in ASEAN'.

 10. COVID-19 and trade policy responses in ASEAN.

 

As in the case with many other economies, the imposition of export restrictions and the relaxation of imports on Coronavirus Disease 2019 (COVID-19)-related goods and services have been prevalent across ASEAN throughout the spread of the pandemic. Building on data from the World Trade Organization (WTO) and the International Trade Centre (ITC), as well as from other sources, COVID-19-trade-related measures amongst ASEAN Member States (AMS) and ten ASEAN Discussion Papers (DPs) were analyzed. In general, a total of 100 trade measures had been issued by these economies, where 62 measures were liberalizing like tariff/import duties reduction and trade facilitation, and 38 measures were restrictive such as export restrictions. Out of the 100 trade measures, 38 were issued by AMS and 62 were issued by their partners.

 

Liberalizing trade measures were relatively more common in ASEAN compared to those imposed by ASEAN DPs. Amongst the 38 trade measures by AMS, 23 were liberalizing, whilst 15 were restrictive. At seven measures, Indonesia issued the highest number of COVID-19 trade-related measures amongst AMS (liberalizing and two restrictive), followed by Vietnam with six measures (three liberalizing and three restrictive). Meanwhile, out of the 62 measures issued by ASEAN DPs, 39 measures were liberalizing, whilst the remaining 23 measures were restrictive. Amongst ASEAN DPs, India issued the highest number of COVID-19 trade-related measures at 16 (nine liberalizing and seven restrictive), followed by the EU and China, each with nine measures (eight liberalizing and one restrictive measures for the EU, and liberalizing and four restrictive measures for China).

 

Most of trade liberalizing measures imposed by AMS and ASEAN DPs were in the form of tariff/import duties reduction and trade facilitation, whereas the most common type of trade restrictive measures issued by these economies were export prohibition. Most of the products affected by these measures were medical products such as personal protection equipment (PPE) (e.g. masks, gloves), pharma products, and hand sanitizer. In 2018, ASEAN exported USD7.5billion, or 23.9%, of total global exports of PPE (USD31.5billion). ASEAN countries are amongst the largest exporters of PPE products in the world, led by Malaysia (which accounts for 14.2% of world PPE exports) and, followed by Thailand and Vietnam with 4.8% and 3.2% respectively. In the same year, ASEAN also imported USD987.7million of PPE products, or 2.9% of total global imports of PPE. The largest importers in the region were Vietnam, Thailand and Indonesia.

 

Looking at the type of measures imposed by AMS on medical products, the restrictions were intended mainly for the purpose of securing domestic supply. These include temporary export ban on antiseptic, raw materials to fabricate masks, PPE, ethyl alcohol, and masks, or temporary export ban on surgical masks, face mask for protection against dust, smoke, or toxic substance used for safety apparatus and others.

 

On the other hand, most liberalizing measures imposed by AMS in the form of temporary elimination of import duties and sales tax, such as those imposed on medical and PPE, or temporary elimination of import taxes on medical and certain PPE used in the fight of COVID-19 pandemic.

 

Source: ASEAN Policy Brief - No.03 / July 2020.


Read the article below and answer the questions.


1.    Describe the stylized facts of trade measures in ASEAN.

Most of trade liberalizing measures imposed by AMS and ASEAN DPs were in the form of tariff/import duties reduction and trade facilitation, whereas the most common type of trade restrictive measures issued by these economies were export prohibition.

 

2.    What type of merchandise are affected by the trade measures?

Most of the products affected by the trade measures were medical products such as personal protection equipment (PPE) (e.g. masks, gloves), pharma products, and hand sanitizer. In 2018, ASEAN exported USD7.5billion, or 23.9%, of total global exports of PPE (USD31.5billion).


3.    What are the trade restrictions among ASEAN countries during COVID-19 pandemic?

The restrictions include temporary export ban on antiseptic, raw materials to fabricate masks, PPE, ethyl alcohol, and masks, or temporary export ban on surgical masks, face mask for protection against dust, smoke, or toxic substance used for safety apparatus and others. In addition, the restrictions also include in the form of temporary elimination of import duties and sales tax, such as those imposed on medical and PPE, or temporary elimination of import taxes on medical and certain PPE used in the fight of COVID-19 pandemic.

 

4.    What is the role of Malaysia for economic resilience during COVID-19 pandemic through international trade?

ASEAN countries are amongst the largest exporters of PPE products in the world, led by Malaysia (which accounts for 14.2% of world PPE exports). Which means Malaysia was being the main exporter of PPE at that time.

 

5. How do ASEAN Member States (AMS) combat the COVID-19 pandemic through international trade?

ASEAN Member States (AMS) combat the COVID-19 pandemic through international trade by implement the restrictions which include temporary export ban on antiseptic, raw materials to fabricate masks, PPE, ethyl alcohol, and masks, or temporary export ban on surgical masks, face mask for protection against dust, smoke, or toxic substance used for safety apparatus and others. In addition, the restrictions also include in the form of temporary elimination of import duties and sales tax, such as those imposed on medical and PPE, or temporary elimination of import taxes on medical and certain PPE used in the fight of COVID-19 pandemic.

 


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