Swiss trade during the COVID-19 pandemic: an early appraisal

COVID-19, trade collapse and GVC linkages: European experience

This paper highlights the role of supply chain linkages for the transmission of COVID-19-induced shocks based on the monthly trade of the European Union Member States during the first wave of the COVID-19 pandemic. Using the framework of the gravity model, we find an overall decline of over 20% in trade among EU countries following the COVID-19 outbreak. Both supply and demand shocks are shown to contribute to this trade decline associated with COVID-19 in the origin and destination country proxied by either infection rate or policy stringency index. While import demand shocks have an immediate effect on trade decline, the trade becomes increasingly sensitive to the COVID-19 situation in the origin country over time. Moreover, the results confirm that forward global value chain (GVC) linkages act as a channel for the transmission of (demand) shocks in supply chain trade. Indeed, an increase in the incidence of COVID-19 cases in the destination country leads to a larger decrease in domestic exports of intermediate goods in those destination countries with which a country has stronger forward linkages, that is in partners positioned further downstream. We also find the 'China effect', with the transmission of the COVID-19 shock from the partner country amplified when the share of supply chain trade with China is higher. On the other hand, we fail to find robust evidence for the transmission of COVID-19-induced shocks via backward linkages.

Impact of Covid-19 containment measures on trade☆

Combining Spanish firm-level monthly trade data with country-level Covid-19 containment measures over February–July 2020, we show that the value of exports decreased more in destinations that introduced strict containment measures, whereas the value of imports remained unaffected. Strict containment measures in a partner country increased the probability of a firm ceasing to trade with it. Negative effects were concentrated between March and May 2020. The detrimental effect of containment on exports was larger in destinations where the share of jobs that could be done remotely was low, for goods consumed outside the household, for wholesalers and retailers, and for manufacturers not participating in global value chains.

Effects of COVID-19 on trade flows: Measuring their impact through government policy responses

This paper examines the impact of COVID-19 on bilateral trade flows using a state-of-the-art gravity model of trade. Using the monthly trade data of 68 countries exporting across 222 destinations between January 2019 and October 2020, our results are threefold. First, we find a greater negative impact of COVID-19 on bilateral trade for those countries that were members of regional trade agreements before the pandemic. Second, we find that the impact of COVID-19 is negative and significant when we consider indicators related to governmental actions. Finally, this negative effect is more intense when exporter and importer country share identical income levels. In the latter case, the highest negative impact is found for exports between high-income countries.

"Too shocked to search" The COVID-19 shutdowns' impact on the search for apprenticeships

Even though the recession in Switzerland triggered by COVID-19 ultimately remained without consequences for the apprenticeship market, significantly fewer apprenticeship contracts had been signed in the months of the first shutdown in 2020 than in the same months of the previous year. Using daily search queries on the national administrative platform for apprenticeship vacancies from February 2020 until April 2021 as a proxy for the supply of potential apprentices, we find a temporal pattern that coincides perfectly with the development of signed apprenticeship contracts. Furthermore, the analyses show that the initially very strong relationship between the intensity of the politically imposed restrictions to fight the COVID-19 pandemic and the daily search queries diminished over time, leading to a search intensity in March 2021 that was back at pre-pandemic level.