Archive:Impact of COVID-19 on international trade by product group

Data extracted in August 2020.

No planned update.

Highlights

Trade in energy products fell by 63 % in the the first semester of 2020 compared to the first semester of 2019.

Trade in chemicals and food & drink largely unaffected by the COVID-19 crisis.

Export in all products increased in June 2020 compared with May 2020.

To help prevent the spread of the COVID-19 pandemic, countries around the world have taken a variety of restrictive measures which have negatively affected international trade in goods. This article is part of an online publication containing articles on the Impact of COVID-19 on international trade in goods statistics. In this article, the impact on different product groups is presented. To ensure comparability over time, seasonally and working-day adjusted data are used.

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Comparison with the previous year

The development of trade is somewhat different for the six product groups shown in Figure 1. Chemicals and food & drink are largely unaffected by the COVID-19 crisis, while there was a moderate drop for imports and exports of raw materials. By contrast, machinery & vehicles, other manufactured products and in particular energy all had large drops. However, in June 2020 all three recovered somewhat, although not yet reaching their pre-crisis levels.

Figure 1: EU-27 trade by product group, January 2019 - June 2020 (EUR billion)
Source: Eurostat (ext_st_27_2020sitc)

The product group showing the largest relative decline compared with the same semester of the previous year is energy (see Figure 2). However, the drop to 63 % of last year's values is due to a combination of the COVID-19 crisis and a fall in prices for major energy products, such as crude oil. Trade in chemicals (both exports and imports) and food & drink (only exports) grew during this period. They were also the two categories where exports grew more than imports. In the other product categories, the drops were much larger and affected exports more than imports.

Figure 2: Growth rates of extra EU-27 trade in goods by product group (first semester 2019 - first semster 2020)
Source: Eurostat (ext_st_27_2020sitc)

Table 1 shows the growth rates for imports during the first six months of 2020 compared with the same months in 2019; starting in March, the effects of the COVID-19 crisis are clearly visible. The largest drops happened in May for all product groups except machinery & vehicles, which was worst affected in April. Drops of more than 10 % are seen for energy from February to June, for machinery and vehicles from March to May and for other goods in April and May. May also saw 10 % drops for raw materials (repeated in June) and food & drink, while chemicals did not have a large drop in any month.

Table 1: Growth rates of extra EU-27 imports by product group (% change compared to same month previous year)
Source: Eurostat (ext_st_27_2020sitc)

Declines in growth rates for exports of goods were also largest in May, with the exception of machinery & vehicles and other manufactured goods (see Table 2) which had their worst-affected month in April with drops of more than 10 % from March to June. By contrast, food & drink and chemicals did not have drops of more than 10 % and even grew in every month except May. Raw materials had 10 % drops between March and May and energy between February and June.

Table 2: Growth rates of extra EU-27 exports by product group (% change compared to same month previous year)
Source: Eurostat (ext_st_27_2020sitc)

Overall, the first 6 months of 2020 show a clear decline in the import values for energy, machinery & vehicles and other manufactured goods, while the other sectors, despite the COVID-19 crisis, stood at the same values observed in 2019 (see Figure 3). Exports show largely the same developments as imports but as the EU-27 exports far less energy than it imports, the drop is not as visible as in imports (see Figure 4).

Figure 3: EU-27 imports by product group, first semesters 2019 and 2020 (EUR billion)
Source: Eurostat (ext_st_27_2020sitc)

Figure 4: EU-27 exports by product group, first semesters 2019 and 2020 (EUR billion)
Source: Eurostat (ext_st_27_2020sitc)

Month to month comparison

In the month to month comparison, imports of machinery and vehicles had the largest drop in March, raw materials, energy and other manufactured products in April, and food & drink and chemicals in May (see Table 3). In June, all product groups except raw materials grew compared with May, although comparing with Table 1 shows that most product groups are still below the level they had in June 2019.

Table 3: Growth rates of extra EU-27 imports by product group (% change compared to the previous month)
Source: Eurostat (ext_st_27_2020sitc)

The behaviour of the product groups is slightly different for exports. Here the worst-affected month is April for most groups (see Table 4), the exceptions being raw materials (one month earlier) and food & drink (one month later). Machinery & vehicles, as well as other manufactured products, were already starting to recover in May, while in June all product groups show increases compared with May 2020. However, as for imports, the comparison with Table 2 shows most of them are still below the level they had in June 2019.

Table 4: Growth rates of extra EU-27 exports by product group (% change compared to the previous month)
Source: Eurostat (ext_st_27_2020sitc)

Source data for tables and graphs

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Data sources

EU data is taken from Eurostat's COMEXT database. COMEXT is the reference database for international trade in goods. It provides access not only to both recent and historical data from the EU Member States but also to statistics of a significant number of third countries. International trade aggregated and detailed statistics disseminated via the Eurostat website are compiled from COMEXT data according to a monthly process.

Data are collected by the competent national authorities of the Member States and compiled according to a harmonised methodology established by EU regulations before transmission to Eurostat. For extra-EU trade, the statistical information is mainly provided by the traders on the basis of customs declarations.

EU data are compiled according to Community guidelines and may, therefore, differ from national data published by the Member States. Statistics on extra-EU trade are calculated as the sum of trade of each of the 27 EU Member States with countries outside the EU. In other words, the EU is considered as a single trading entity and trade flows are measured into and out of the area, but not within it.

The EU-27 data reflect the political change in the EU composition. Therefore, the United Kingdom is considered as an extra-EU partner country for the EU-27. However, the United Kingdom is still part of the internal market until the end of the transitory period, meaning that data on trade with the United Kingdom are still based on statistical concepts applicable to trade between the EU Member States. As a consequence, while imports from any other extra-EU-27 trade partner are grouped by country of origin, the United Kingdom data reflect country of consignment. In practice this means that the goods imported by the EU-27 from the United Kingdom were physically transported from the United Kingdom but part of these goods could have been of other origin than the United Kingdom. For this reason data on trade with the United Kingdom are not fully comparable with data on trade with other extra-EU-27 trade partners.

Methodology

In this article some products are classified as COVID-19 related products. They are compared over time and across countries, and also with products in the same chapter of the Harmonised System (HS) product classification, i.e. they are compared with other similar products that are however not directly used in response to the COVID-19 pandemic. It should be noted that most COVID-19 related products cannot be precisely identified and they are grouped together with products not specific to COVID-19. Nevertheless, some trends can be observed.

According to the EU concepts and definitions, extra-EU trade statistics (trade between EU Member States and non-EU countries) do not record exchanges involving goods in transit, placed in a customs warehouse or given temporary admission (for trade fairs, temporary exhibitions, tests, etc.). This is known as ‘special trade’. The partner is the country of final destination of the goods for exports and the country of origin for imports.

Unit of measure

Trade values are expressed in millions or billions (10⁹) of euros. They correspond to the statistical value, i.e. to the amount which would be invoiced in the event of sale or purchase at the national border of the reporting country. It is called a FOB value (free on board) for exports and a CIF value (cost, insurance, freight) for imports.

Context

Trade is an important indicator of Europe’s prosperity and place in the world. The bloc is deeply integrated into global markets both for the products it sources and the exports it sells. The EU trade policy is a major element of the external dimension of the ‘Europe 2020 strategy for smart, sustainable and inclusive growth’ and is one of the main pillars of the EU’s relations with the rest of the world.

Because the 27 EU Member States share a single market and a single external border, they also have a single trade policy. EU Member States speak and negotiate collectively, both in the World Trade Organization, where the rules of international trade are agreed and enforced, and with individual trading partners. This common policy enables them to speak with one voice in trade negotiations, maximising their impact in such negotiations. This is even more important in a globalised world in which economies tend to cluster together in regional groups.

The openness of the EU’s trade regime has meant that the EU is the biggest player on the global trading scene and remains a good region to do business with. Thanks to the ease of modern transport and communications, it is now easier to produce, buy and sell goods around the world which gives European companies of every size the potential to trade outside Europe.