Publication: Trade Policies and Sea and Air Freight: The Impact of COVID-19 Lockdowns on Imports and Exports
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2023-01
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Date
2023-01-18
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Abstract
This study analyzes how Indonesia’s international trade was affected by its own lockdown policies (domestic) and those of its trading partners (external) in response to COVID-19. The study differentiates between sea freight and air freight, as well as products affected by specific non-tariff measures. Event-study results show that the decline in imports (which were more negatively affected than exports) was mainly attributed to external lockdowns, the impacts of which were more pronounced and persistent for imports entering Indonesia by air (due to restrictions to international travel) and imports subject to port-related non-tariff measures. Domestic lockdowns adversely affected intermediate imports subject to non-tariff measures requiring physical inspection, testing, and approval processes. External lockdowns, which also had a larger impact on exports relative to domestic policies, affected sea and air exports evenly. Demand factors (specifically, workplace closures and stay-at-home orders) in the partner countries were the drivers of the decline in exports. Enhancing trade facilitation to keep goods moving as smoothly as possible, reforming specific non-tariff measures, and improving customs and other procedures would ensure fewer disruptions from shocks in a globally integrated world.
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“Majune, Socrates; Montfaucon, Angella Faith. 2023. Trade Policies and Sea and Air Freight: The Impact of COVID-19 Lockdowns on Imports and Exports. Policy Research Working Paper; 10271. © World Bank. http://hdl.handle.net/10986/38497 License: CC BY 3.0 IGO.”
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