Impact of COVID-19 on the trade of goods and services in Spain

Asier Minondo

doi:10.1108/aea-11-2020-0156

Abstract

Purpose This paper aims to analyze the impact of COVID-19 on the trade of goods and services in Spain. Design/methodology/approach This paper uses monthly trade data at the product, region and firm level. Findings The COVID-19 crisis has led to the sharpest collapse in the Spanish trade of goods and services in recent decades. The containment measures adopted to arrest the spread of the virus have caused an especially intense fall of trade in services. The large share of transport equipment, capital goods, products that are consumed outdoors (i.e., outdoor goods) and tourism in Spanish exports has made the COVID-19 trade crisis more intense in Spain than in the rest of the European Union. Practical implications The nature of the collapse suggests that trade in goods can recover swiftly when the health crisis ends. However, COVID-19 may have a long-term negative impact on the trade of services that rely on the movement of people. Originality/value It contributes to understand how COVID-19 has affected the trade in goods and services in Spain.

Highlights

There is little doubt that 2020 will be remembered as the COVID-19 year
COVID-19 has caused the steepest decrease in Spanish trade in decades
The containment measures adopted to arrest the spread of the virus made the decrease especially intense for services

Summary

Introduction

There is little doubt that 2020 will be remembered as the COVID-19 year. The virus that emerged in China has, far, infected more than 51 million and killed almost 1.3 million people globally [1]. These concerns further increased when some northern Italian regions that hosted factories that exported components to Spain were put under quarantine at the end of February (Vozpopuli, 2020) It was in March, in response to the declaration of the state of alarm in Spain and the introduction of confinement measures in many other countries, when COVID-19 began to have a significantly negative impact on trade flows. With the introduction of containment measures in many EU countries (the most important destinations of Spanish exports), the value of exports decreased by 14.5, 39.3 and 34.3% in March, April and May, respectively, compared to the previous year. During the March–August period, import of goods decreased more than exports This can be explained by the larger drop in economic activity in Spain than that of its trading partners [4]. I define the beginning of a crisis when the moving window is lower than that of the previous month, but

31 Aug and importers of goods

Findings

Conclusion