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Has global trade finally turned the corner?

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The world’s trading routes have seen a year like no other in 2020. Many industries, makers and markets have responded to the coronavirus pandemic with ingenuity. Made on Earth, Road to Recovery, a BBC production, explores how the trades in eight essential products are adapting – from bicycles to whisky, spices to semiconductors – and how resilience and innovation are redefining the way the world trades.

As COVID-19 swept around the globe, countries closed their borders, trade slowed to a trickle, and millions of workers were laid off. But now firms are finding new ways to trade, customers in many countries are switching to more online shopping and global trade is reviving.

About 55%, just over half the world’s population, now live in cities and in normal times millions of us travel into work every day. That daily commute halted for a lot of people with the start of the pandemic, and many are now looking for alternatives modes of transport as a way of avoiding crowded trains and buses – which has been good news for the world’s bike makers.

When the pandemic hit, many firms shut down their production lines. But the UK’s Brompton Bicycles felt that cycling would form part of the solution and so kept its manufacturing going. It was a risk, but it paid off and “now we can’t make enough bikes,” says Brompton’s Will Butler-Adams. Like many bicycle manufacturers, the main challenge is now keeping up with demand.

This shift to cycling is just one of the many changes in work patterns and trade routes due to COVID-19. Another has been the move to working from home. As the pandemic spread, governments brought in lockdowns to halt the virus in its tracks.

Coffee production has remained resilient

Millions suddenly needed laptops to work from home or to attend classes online.

While many manufacturing and retail sectors were hard hit, the semiconductor industry – which makes computer chips for computers – saw demand rise. Global computer sales jumped 11% in the second quarter of 2020. While the US, for example, has seen double-digit sales growth in laptops and tablets for the first time in a decade.

As the lockdowns began, city centres emptied of people, and high streets became quieter, many coffee shop owners were among the first to close their businesses, and some have never reopened.

But despite this high street impact, global coffee production has remained largely resilient. The impact of the pandemic on production “is relatively minor”, says José Sette, the executive director of the International Coffee Organization. In fact, the world’s largest coffee producer, Brazil, is set for bumper harvest – and even much smaller coffee-producing countries like Ethiopia have largely been able to continue production as planned.

Boom in tissue sales

The pandemic has also been marked by episodes of panic-buying and hoarding by consumers in some countries. One of the products that disappeared off many supermarket shelves was toilet paper – even though there was never a true scarcity. It eventually subsided when the supply of toilet rolls caught up with the temporary surge in demand.

Toilet rolls apart, the world’s paper mills are set for slightly lower sales this year, though are likely to see growth after this, thanks to a boom in tissue sales and the growing demand for disposable surgical face masks and gowns. These are often made from paper, and in the US alone that’s 907,000 tonnes of paper and cardboard every year.

Paper is now also key in many routine medical tests: to detect pregnancy, urinary tract infections, HIV and toxins in drinking water. There are also tests that use paper to identify if someone has developed COVID antibodies. Despite its disruptive impact elsewhere, the pandemic is helping create new markets for paper.

And paper is not the only product that is seeing growing demand. Sales of spices around the globe have risen – helped by demand for spices like turmeric and ginger that are known for their immunity-boosting properties. India, which accounts for half the world’s trade in these crops, saw its spice exports grow by 23% to $359m in June – even as its overall exports fell 12.4%.

Flower industry feels full brunt of COVID-19

It has been the world’s $18bn flower industry that has seen some the most dramatic impacts of COVID. In the first six weeks of lockdown the EU flower market lost $1.2bn in value and the Dutch flower auctions, which account for 40% of the world’s cut flowers sales, collapsed completely for a time.

Flower growers in the developing world took a huge hit. Kenya, which is one of the world’s biggest flower exporters, almost immediately faced crisis as its flower exports fell 85%. About 50,000 workers lost their jobs and two million people’s livelihoods were affected.

“We ended up destroying tonnes and tonnes of flowers, it was devastating,” says Christine Shikuku, the human resources manager for Tambuzi Flower Farm in the foothills of Mount Kenya.

But they worked out a solution to help their workers, if they couldn’t sell roses to the world, they could at least grow food to help feed their 500-strong workforce. They cleared 10 hectares, and swapped flowers for beans, maize, potatoes, kale, onions and tomatoes. “I am proud how Tambuzi’s management handled the pandemic. We came together and we handled it all as a team,” says Ms Shikuku.

Luxury fashion items in demand

The world’s rose growers may have struggled with COVID, but that is not the case for luxury handbag makers. Sales of these and other luxury fashion items have held up.

Italian designer, Giorgia, who has her own fashion brand in Palermo, Sicily, says sales of her bags rose during lockdown. People couldn’t go out, she says: “So they were sitting at home looking online for something nice to buy. It took their mind off the virus. Now our sales are better than ever.”

Step back from looking at individual products and there are signs that world trade is reviving from its deep, COVID-19 induced slump. The World Trade Organization now reckons the volume of goods traded in 2020 will fall by just 9.2% – and not the 12.9% drop it had earlier forecast – though this depends on how the pandemic evolves and how governments respond to it.

Coronavirus has undoubtedly disrupted and disorganised global trade networks. But trade growth has never been a smooth upward curve. There have has always been minor and major setbacks due to economic recessions and depressions, diseases and wars. International trade, by its very nature, is a dynamic and constantly evolving system.

The 21st century has certainly seen shocks to the global trading system with the 2008 financial crash and now COVID-19, and it is likely that as we come out of the pandemic in 2021 we can expect to see different patterns emerging as trade links are renewed.

Tim Bowler is a business reporter with BBC News in the UK. For more information on the people and stories featured in this article, watch Made on Earth: Road to Recovery on BBC World News now screening on Saturdays and Sundays. For more information visit: www.bbc.com/madeonearth

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