“c06TheEconomicsOfInternationalTrade_PrintPDF” — 2022/5/31 — 13:29 — page 40 — #40
The global COVID-19 pandemic
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During the global COVID-19 pandemic and lockdowns, supply chains for goods and services were severely disrupted because of the health crisis, staff shortages and a lack of resources. Goods and services previously imported were not readily available, and some nations decided to impose restrictions on exports because they wanted to keep their supplies for domestic use. As a result, questions were raised about whether there had been overspecialisation in production and a lack of national self-sufficiency, driven by the ideas of freer trade. Many countries felt very isolated, vulnerable, and unable to provide the necessities of life including face masks, hospital ventilators for patients with respiratory issues, fuel, vaccines and other medications, and spare parts for cars and machinery. The experience exposed a weakness of free trade. In response, some governments have made commitments to diversify and reinvigorate their manufacturing sectors to make their economies more resilient to potential threats posed by pandemics and war. The Russian invasion of Ukraine
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In early-2022, the Russian government decided to invade the independent country of Ukraine, apparently to expand its territory. The destructive war sent shock waves through the rest of Europe, especially members of NATO (i.e. North Atlantic Treaty Organisation). Russia was seen as a threat to world peace and the international order. The war also made western Europe realise how overdependent it was on Russia for essential energy needed to keep its economies operating. It caused many to question whether Russia was a reliable trading partner, if in times of tension it might use its energy exports as a weapon against the West. As a result, global trading patterns are undergoing change and there is a push to diversify energy supply and reduce demand.
Resources
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Weblink Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, 2018)
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Jacaranda Key Concepts in VCE Economics Units 1 & 2 Twelfth Edition
