COVID-19 Update: June 25, 2020

The World Health Organization (WHO) was reported 150 thousand new cases of COVID-19 on June 18, which represented the most reports in a single day so far. Almost half of the cases were reported from the Americas, but also from South Asia and the Middle East. Therefore, the risks of the pandemic are still visible, despite several countries opening their societies and economies. WHO Director-General’s Dr. Tedros Adhanom Ghebreyesus opening remarks at the media briefing of June 19, also stated that: COVID-19 has demonstrated that no one is safe until we’re all safe. Only by putting politics aside and working in true collaboration can we make a difference.
 

At the June 8 meeting of the Committee on Market Access of the World Trade Organization (WTO), members discussed ways to ensure that the emergency measures introduced to restrict exports are lifted once they are no longer necessary. Several members stressed that any emergency measures designed to tackle COVID-19 must be targeted, proportionate, transparent and temporary. These measures must not create unnecessary disruptions to supply chains that could have a detrimental impact on business, in particular micro, small and medium-sized enterprises (MSMEs). In addition to this, some members called on governments to honor commitments to roll back the temporary trade-related measures implemented to combat the COVID-19 pandemic and to ensure they do not become permanent.
 
On June 10, WTO issued a report on how the COVID-19 pandemic has affected the participation of least-developed countries (LDCs) in global trade. The note stresses that LDCs have seen a significant decline in export earnings due to decreasing demand in key markets, falling commodity prices and a decline in remittances, and are likely to be the hardest hit by the crisis due to their limited resources to stimulate growth. The report also summarizes the measures that LDCs have taken to combat the pandemic, ranging from strengthening health care systems to providing stimulus packages to export-oriented sectors and liquidity support for small and medium-sized enterprises.

The Organization for Economic Co-operation and Development (OECD) issued the 2020 Projected Change in GDP, which focuses on two equally probable scenarios –one in which a second wave of infections, with renewed lock-downs, hits before the end of 2020, and one in which another major outbreak is avoided. The declines in GDP vary from 1.2% (Korea) to 11.1% (Spain) in the single-hit scenario, compared to the previous period.

According to OECD, the COVID-19 pandemic has triggered the most severe economic recession in nearly a century and is causing enormous damage to people’s health, jobs and well-being.

Australia is currently de-escalating COVID-19 lockdown measures since the announcement in May of a three-stage plan to ease restrictions. According to The Guardian, in New South Wales up to 50 people can dine-in at cafes and restaurants, if there are four square meters of space per person. In other states such as Victoria, Queensland and Tasmania, the restrictions are stricter and restaurants can seat up to 20 patrons at once. Outdoor gatherings of up to 100 people are allowed in Western Australia and Queensland and there are no limits on outside gatherings in the Northern Territory, as long as physical distancing is maintained. In other states, the maximum number of people allowed in an outdoor gathering is lower.

Despite the devastating effects of the COVID-19 pandemic in Brazilian society and economy, the agricultural sector in Brazil has thrived, according to a USDA GAIN Report, issued on June 16. This report also states that the rapid devaluation of the Brazilian real boosted the country’s agricultural exports. In addition to this, weak real also discouraged dollar-denominated imports and fueled internal demand for domestically produced agricultural goods. Brazilian agriculture, with the aid of the government, overcame early transportation hurdles to boost exports, while also maintaining internal supply. The country has not experienced food shortage or supply chain disruptions. However, some segments of the Brazilian population have faced increased food insecurity.

From June 11, a surge of new cases in Beijing has been detected, linked to the Xinfadi Wholesale Market. The containment measures adopted in order to stop the spread of COVID-19 include massive testing, medical observation, and disinfestation of public space, among others. All the communities and villages in Beijing have put in place level-3 emergency response, level-2 control measures and entered level-1 work mode, which includes the closure of cultural, sports, entertainment and other indoor facilities. In order to prevent further spread of the virus, three categories of people are banned from leaving Beijing. Control on inbound travel from low, medium and high-risk regions is also tightened.

The Eurogroup held a videoconference on June 11. The Commission has put forward a proposal for an unprecedented recovery package, integrated in the multi-annual financial framework. The key element of this package is the recovery and resilience facility to support Member States’ reforms and investments. However, EU Member States are in deep recession and additional policy actions are needed to mitigate its effects, according to the Eurogroup President Mário Centeno. 

On June 15, the EU Commission backed an international initiative to facilitate trade in healthcare products. Following a first discussion among EU ministers, the EU Commission’s ideas for an international initiative to facilitate trade in healthcare products were shared with the 'Ottawa Group' (a group of 13 like-minded WTO partners). A future agreement could facilitate trade in healthcare products and contribute to stronger global preparedness for future health shocks by: (1) abolishing tariffs on pharmaceutical and medical goods; (2) establishing a scheme of global cooperation in times of health crisis, covering issues such as import and export restrictions, customs and transit, public procurement and transparency; and (3) improving the current WTO rules applicable to trade in essential goods.

As of June 15, France opened its borders to EU and Schengen area citizens. Cafés, bars, restaurants and cinemas, among other businesses, also reopened. It is expected that travelers from third countries will be allowed to enter to France from July 1.

Chambres d’Agriculture (APCA) has presented a post-COVID-19 plan for the recovery of the agricultural sector. The different measures include the further development of deficit sectors to gain competitiveness, the promotion of local food supplies and agritourism, the easing of regulatory barriers, and the promotion of self-sufficiency, among others. The plan stresses the need to reclaim food sovereignty and to enhance self-sufficiency (agricultural production within a radius of up to 100 km), due to the fact that several studies have shown that its rate in the 100 largest urban areas was only 2.1% on average.

According to a recent USDA GAIN Report, the rules which ease the entry process of seasonal agricultural workers entered into force on June 16. These rules facilitate arrivals and departures of workers, set strict infection protection measures on the workplace, and require immediate notification in case of infection, to ease the traceability of the illness.

Lockdown measures are being released. However, social distancing and hygiene measures remain. Italy reopened its borders to EU citizens on June 3. There are no limitations for visitors who travel to Italy from EU countries, but quarantine is still a requirement for people arriving from third countries. According to RFI, as the downward trend for both fatalities and new cases continues, nearly all businesses have gone back to work, operating in a new manner and with restrictions.

On June 13, a statement from the EU Council, during the ‘Stati Generali dell’economia’ recognized the efforts made for the economic and social recovery of Italy. The European Council President Charles Michel also highlighted the fact that other governments replicated some of the measures taken by Italian authorities in order to mitigate the effects of the pandemic.

On June 21, the state of alarm ended in Spain, allowing residents to travel freely throughout the territory, and Spanish borders were opened to EU and Schengen-area citizens, except from Portugal. Travelers from Portugal and countries outside the Schengen area will be permitted to enter from July 1, only if there is a reciprocal agreement on travel, and taking into consideration the epidemiological situation in the country of origin. Strict hygiene and social distancing measures are applicable and face masks in public spaces are mandatory.

The Dutch foodservice-HRI industry has been significantly impacted by the COVID-19 outbreak, according to a USDA GAIN Report issued on June 17. Despite foodservice outlets were permitted to operate from June 1, all bars, cafés and restaurants closed their doors for an extended period of time. Just one week after opening, four out of ten entrepreneurs indicated that they were not sure if they could afford to keep their businesses functioning. While many Dutch restaurants made investments in order to comply with the government’s social distancing requirements, guests still appear reluctant to a massive return.

The situation of the ports is still uncertain. According to a USDA GAIN Report of June 16, the Jawaharlal Nehru Port Trust (JNPT) in Mumbai is still dealing with the effects of an exodus of migrant workers who returned to their home states in May. This labor shortage has had an impact on both imports and exports, which declined since May, after 70% of the contracted labor force returned home. Despite the labor shortages, port authorities have reduced container congestion over the past month. Reports indicate that 95,000 containers previously held at container freight stations have been moved to inland container depots, which has reduced the backlog. Exporters hope that new investments in loading mechanization will help them overcome labor shortage issues in the medium to long term.

The report also states that in Mundra, truck freight rates have increased significantly. However, media reports that truck availability is increasing nationwide.

According to another USDA GAIN Report, the food retail situation in India is slowly improving since the beginning of the lockdown. In Hyderabad, all store staff are now able to work, compared to only 30% at the beginning of the lockdown. The retail chains report that 90% of products are available, including fruits and vegetables, whose prices are expected to stabilize due to lockdown relaxation measures. In Pune, two-thirds of the city’s farmers markets are reopening. As part of the relaxation of the lockdown, Mumbai area shops can remain open throughout the day, as long as the night curfew is not violated.

A recent USDA GAIN Report states that the Russian food processing industry is growing, driven by an ambitious national goal of increasing food exports by 70% by 2024, and strong government support for domestic agricultural production. However, due to the COVID-19 crisis, the incomes are expected to decline, as many experts predict an economy contraction by around 1% in 2020, instead of the previously projected growth of 2%. Falling investment and a decline in real income may affect business and consumer confidence during the COVID-19 crisis.

South Africa is expected to enter into alert 2 level by July. This level will allow several leisure and social activities, applying physical distancing, hygienic and other measures to prevent the resurgence of the virus.

According to The Guardian, 29 states reported a raise of new cases, amid the fear of a second outbreak of COVID-19 infections. Most of the new infections are in states such as Georgia, Florida and Texas, which were among the first to launch reopening measures. In order to prevent new cases during the easing of lockdown measures, the federal Centers for Disease Control and Prevention (CDC) issued warnings on the need for social distancing and face masks.

The U.S. Department of Agriculture (USDA) announced on June 16, that it has purchased more than $2.2 billion of meat, fruits, vegetables, specialty crops and dairy products in fiscal years 2019 and 2020, in the context of the USDA Trade Mitigation Programs.