Trade in the Shadow of COVID-19: Going Forward Together, Not Apart – International Banker

By Steven Beck, Head of Trade & Supply Chain Finance, Asian Development Bank

The global COVID-19 pandemic is a reminder that our world is an intimately connected place. Now is not the time to start cutting the connections that have raised millions from poverty and helped to build the global economy that we have today.

Physical borders can be closed to those who might pass on the virus, but the crisis underlines the importance of other connections, such as trade. At a time when streamlining trade should be at the top of the agenda, so that critical goods such as food and medicine can move to where they are needed, too many have seen the pandemic as a reason to turn inward.

The global trading system has been tested by the pandemic’s effects. Weaknesses in the current system have been exposed. There is no denying that. An overreliance on manufacturing in a single location for some goods is one indication that supply chains may be more fragile than previously thought. When factories closed to fight the virus, key medical goods suddenly became scarce. More subtle weaknesses have also been highlighted by the crisis.

Global trade and the financial system that supports it has traditionally been a paper-intensive arena, with hand-delivered documents in triplicate needed to move goods at every stage. That system was already antiquated before the crisis. Now, the need to digitize the trading world is even more urgent.

Digitization has proven to be