Impact of COVID-19 on international trade by main partners


Data extracted in August 2020.

No planned update.

Highlights

During the first semester of 2020, the largest drops in EU exports and imports in absolute terms were with the United States and the United Kingdom.

EU-27 imports from Russia and Norway fell most during the first semester of 2020 compared with the first semester of 2019

EU-27 exports to India and the United Kingdom fell most during the first semester of 2020 compared with the first semester of 2019

Growth rates of extra EU-27 trade in goods by main partner (first semester 2019 - first semester 2020)
Source: Eurostat (ext_st_eu27_2020sitc)

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, we present the impact on trade with the EU's ten main partners. To ensure comparability over time, seasonally and working-day adjusted data are used.



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Comparison with the previous year

The EU-27's largest trade in goods partners are the United States, China, the United Kingdom and Switzerland (See Figure 1). Trade with the United Kingdom and the United States suffered most from the COVID-19 crisis, with big drops both in exports and imports in April. Although trade recovered somewhat in June, it was still significantly lower than before the crisis. Trade with Switzerland dropped little in March and rebounded in June when it was close to pre-crisis levels, while trade with China decreased early in the crisis, but to a lesser degree. In June, exports to China were at similar levels as before the crisis. Moreover, imports from China grew strongly in April, reaching well above pre-crisis levels. The contrasting developments in trade with China and the United States meant that in April 2020, China overtook the United States as the largest trade partner of the EU-27. China continued to be the largest partner in May and June.

Figure 1: EU-27 trade with four largest partners, January 2019 - June 2020 (€ billion)
Source: Eurostat (ext_st_eu27_2020sitc)

In the first semester of 2020, imports from all main partners except China and Switzerland dropped compared with the first semester of 2019 (see Figure 2). The largest drops in absolute terms (i.e. subtracting 2019 imports from 2020 imports) were in imports from Russia (- €25 billion), the United Kingdom (- €17 billion) and the United States (- €11 billion). In relative terms (i.e. dividing 2020 imports by 2019 imports) the largest drops were in imports from Russia (-33 %), Norway (-25 %) and India (-23 %). The large drops for Russia and Norway were due to strongly reduced imports of energy products, while for India the largest contributor to the drop was other manufactured products.

Figure 2: EU-27 imports for main partners, first semesters 2019 and 2020 (€ billion)
Source: Eurostat (ext_st_eu27_2020sitc)

In the first semester of 2020, exports to all main partners except South Korea dropped compared with the first semester of 2019 (see Figure 3). The largest drop in absolute terms (- €35 billion) was in exports to the United Kingdom where the combination of the COVID-19 crisis and uncertainty over Brexit led to a 22 % drop. In relative terms, only exports to India suffered a larger drop of 27 %. For both these countries machinery and vehicles were the product group with the largest decrease in exports. Norway, Japan, Russia and the United States all had decreases between 8 % and 10 % while China, Switzerland and Turkey had drops between 3 % and 5 %.

Figure 3: EU-27 exports for main partners, first semesters 2019 and 2020 (€ billion)
Source: Eurostat (ext_st_eu27_2020sitc)

Figure 4 shows the growth rates of trade for the main partners of the EU-27, comparing the first semester of 2020 with the first semester of 2019. Among the main partners, Russia and Norway, from whom the EU imports large quantities of energy products, experienced the largest drops. The largest drops for exports were registered by India and the United Kingdom. The only increases were in exports to South Korea and imports from China and Switzerland.

Figure 4: Growth rates of extra EU-27 trade in goods by main partner (first semester 2019 - first semester 2020)
Source: Eurostat (ext_st_eu27_2020sitc)

Table 1 compares the growth rates for imports from January to June 2020 with the same month of the previous year. For China, the biggest drop was early in the crisis in March. After March, imports from China grew, possibly helped by reduced imports from other countries. In June 2020, imports from China increased by 23 % due to a strong increase in imports of machinery and vehicles (+ €2.9 billion) and other manufactured goods (+ €2.7 billion). Imports from Russia and Norway dropped strongly in April, May and June, through a combination of falling quantities and falling prices of energy products. For the United Kingdom, the large decreases started in March (- 25 %), dropped most in May (- 32 %) and were - 18 % in June. Imports from the United States were still increasing in March (+ 4.7 %), but also dropped most in May (-32 %) and were -21 % in June.

Table 1: Growth rates of extra EU-27 imports in goods by main partner (% change compared to same month previous year)
Source: Eurostat (ext_st_eu27_2020sitc)

Table 2 compares the growth rates for exports in the last six months with the same month of the previous year. Exports to the United Kingdom fell by double digits in each of the months, with the largest drops occurring in April (- 38 %) and May (- 35 %) due to the combined effects of the COVID-19 crisis and uncertainty over Brexit. Only exports to India suffered more in April (-62 %) and May (-58 %). Exports to the United States were still increasing from January to March but also had a big drop in April and May (both -28 %). For all main partners the drops in June were much smaller than in April and May, with exports to Norway (+ 4 %), Switzerland (+ 7 %), South Korea (+ 10 %) and China already increasing (+ 18 %).

Table 2: Growth rates of extra EU-27 exports in goods by main partner (% change compared to same month previous year)
Source: Eurostat (ext_st_eu27_2020sitc)


Month to month comparison

In the month to month comparison for imports, most main partners had their largest decrease in April. The impact on imports from China (two months earlier) and the United Kingdom (one month earlier) were strongest earlier in the semester, while imports from India and the United States declined most in May. In May 2020, imports from Switzerland, China and Turkey grew compared with April 2020. From May 2020 to June 2020 imports from all countries grew, with the exception of China where there was a 1 % drop due to a strong reduction in imports of other manufactured goods ( - €1.6 billion) which was larger than the increase for machinery and vehicles (+ €1.2 billion).

Table 3: Growth rates of extra EU-27 imports in goods by main partner (% change compared to the previous month)
Source: Eurostat (ext_st_eu27_2020sitc)

April was the month with the strongest decline of exports for all main partners, except China which was one month earlier. In April, EU exports were falling to all main partners except China, while in May the exact opposite happened. India and South Korea were the only partners with two consecutive drops of more than 10 %, namely in March and April. By contrast, exports to Japan and China never dropped more than 10 %. In June exports to all main partners were increasing, most notably to India (+ 47 %) and Turkey (+ 30 %) due to increasing exports of both machinery and vehicles and other manufactured goods.

Table 4: Growth rates of extra EU-27 exports in goods by main partner (% change compared to the previous month)
Source: Eurostat (ext_st_eu27_2020sitc)


Source data for tables and graphs

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 main partners 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 main partners 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 main partners. Statistics on extra-EU trade are calculated as the sum of trade of each of the 27 EU main partners 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 main partners. 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 to products in the same chapter of the Harmonised System (HS) product classification, i.e. they are compared to 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 main partners 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 an important 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 main partners share a single market and a single external border, they also have a single trade policy. EU main partners 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.

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International trade in goods - long-term indicators (t_ext_go_lti)
International trade in goods - short-term indicators (t_ext_go_sti)
International trade in goods - aggregated data (ext_go_agg)
International trade in goods - long-term indicators (ext_go_lti)
International trade in goods - short-term indicators (ext_go_sti)
International trade in goods - detailed data (detail)
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