The World Trade Organisation (WTO) has said that prospects for global service trade recovery remain poor due to restrictions and lockdowns in most countries as a result of the coronavirus (Covid-19) pandemic.
The WTO said in statement yesterday that preliminary data further suggested that, in November, services trade was still 16 per cent below 2019 levels, adding that prospects for recovery remain poor since the second wave of COVID-19 infections necessitated new, stricter lockdown measures in many countries, with tightened restrictions on travel and related services extending into the first quarter of 2021.
The latest statistics, according to the WTO, confirm earlier expectations that services trade would be harder hit by the pandemic than goods trade, which was only down five per cent yearon- year in the third quarter. The global trade body noted that foregone expenditures on tradeable services could be directed elsewhere, with consumers shifting to goods instead.
It stated: “Unlike goods, services cannot be stockpiled, which means that despite pentup demand, many of the revenue losses from cancelled flights, holidays abroad, restaurant meals, and cultural/recreational activities are likely to be permanent. “Travel remains the most affected service sector, down 68 per cent globally compared with the same period of 2019. In the third quarter of 2020, spending by international travellers was down 88 per cent in Latin America and the Caribbean, 80 per cent in both Asia and Africa, 78 per cent in North America, and 55 per cent in Europe. “The relaxation of travel restrictions in Europe during the summer months produced only a modest rebound in services trade in the third quarter.
“Trade in ‘other services’, such as construction, recreational, legal, and financial services, repeated its uneven performance: most sub-sectors contracted, with computer services a notable exception. With building projects delayed or postponed in many countries due to the pandemic, global construction exports were down 16 per cent year-on-year, as several Asian exporters saw sharp drops. Audio-visual, artistic and recreational services also saw doubledigit declines (-14 per cent), with the United States’ exports down 24 per cent and the United Kingdom’s cut nearly in half (-45 per cent). Legal, management, accounting, and advertising services saw a tepid year-on-year rebound of 1per cent.