World Trade Organisation (WTO) Director General Roberto Azevêdo and International Chamber of Commerce (ICC) Secretary-General John Denton on Thursday called for more dialogue with business to maximise the effectiveness of public policies to mitigate the economic damage resulting from the COVID-19 pandemic, particularly with regards to trade.
“We’re concerned about the severe disruptions to value chains in many sectors – with major implications for employment and the supply of goods, especially essential medical and food supplies,” they said in a joint statement.
The heads of WTO and ICC said business can play a key role in signalling where trade flows and production chains are being affected, helping to identify solutions that maximise health outcomes while minimising economic damage.
“It’s increasingly clear that the economic downturn caused by the pandemic will necessitate a significant rebuild of domestic policies – and of international cooperation,” they said. “Ongoing efforts to improve and strengthen the global trading system, including the WTO, must therefore continue.”
The two leaders welcomed governments’ efforts “to mitigate the pandemic’s effects on jobs and growth, and lay the foundations for a strong and inclusive recovery.”
To generate “constructive recommendations to governments on trade policy measures that can be readily deployed to speed the response to the COVID-19 pandemic in the immediate and mid-term”, they said the ICC would host a “virtual business roundtable” organised with its partners, as well as with support from the WTO.
As the new coronavirus spreads across Europe, ravaging economies and killing thousands, governments and the European Union are focusing much of their economic rescue efforts on containing a boom in joblessness, particularly by helping companies not fire workers.
Unions estimate, based on reports from local branches, that at least one million Europeans lost their jobs over the past two weeks - and say the actual number is likely far higher - as a shutdown of schools, businesses and social gatherings froze large parts of the economy.
While the rise in unemployment is devastating and rapid, it is still far below that of the U.S., where nearly 10 million people applied for jobless benefits in two weeks. The contrast highlights Europe's greater social safety nets, in particular schemes where governments help companies put workers on shorter hours instead of firing them - in the hope of bringing them back quickly once the pandemic fades.
"In this coronavirus crisis, only the strongest of responses will do," European Commission President Ursula von der Leyen said Thursday as she unveiled a 100 billion-euro ($110 billion) EU plan to help companies to not fire employees.
"With a new solidarity instrument, we will mobilise 100 billion euros to keep people in jobs and businesses running. With this, we are joining forces with member states to save lives and protect livelihoods."
Even before lockdown measures were extended across almost all of Europe, the economy was expected to fall into recession because of the virus. To weather the downturn, governments have unveiled trillions of euros in credit for companies and aid for small businesses and families, including cash handouts. The EU commission, its executive body, made available 37 billion euros from the EU budget and the European Central Bank said it will buy as much as 750 billion euros in financial assets to calm markets.
With her new lending tool, Von der Leyen wants to ensure skilled workers are kept by their companies until "the moment the economy picks up again."
It would help fund schemes that have already been put in place in many countries to avoid layoffs.
According to the European Trade Union Confederation, some 18 EU countries as well as Norway and the U.K. have already introduced jobs-protecting measures.
France is spending 11 billion euros on a scheme to keep people in partial employment. Germany has a program that fills in lost wages when companies must put workers on shorter hours due to an interruption that is temporary and beyond their control, which can be up to 100% of their work time. The program pays 60% of employees' lost net pay, and 67% for those with children.
Many companies have labor agreements under which they can bring workers even closer to full salary. The German scheme helped limit unemployment in the 2009 recession, when companies put some 1.5 million workers in the program. About 2.35 million workers are expected to make use of it during the current crisis.
The idea is to preserve the employment relationship so that companies can immediately resume full operations when trouble passes without having to recruit and train new staff. It also helps keep other businesses afloat across the economy since the workers still have money to spend in shops.
In Europe, Spain and Italy have been the hardest hit by the outbreak of the virus, which has killed more than 33,000 people in the region, though most people only suffer moderate symptoms. They are also suffering some of the biggest economic damage.
In Italy, social security agency computers crashed on the first day individuals could apply for aid to cover lost income due to the coronavirus, with up to 300 requests coming in every second at the peak on Tuesday. Some 18 million Italians are eligible for short-term unemployment schemes, or a payment of 600 euros in March. The monthly handout is expected to be increased to 800 euros this month, as the government has extended the lockdown through at least April 13. The aid in Italy is even being offered to sectors not usually covered, including the self-employed and seasonal workers.
In Spain, over 300,000 more people registered for unemployment benefits in March. And in Britain, which tends to have easier hiring and firing laws than other parts of Europe, the number of people applying for welfare benefits increased nearly tenfold to almost one million in the past couple of weeks. Economists think the unemployment rate of 3.9% could double.
The International Labour Organization last month estimated that nearly 25 billion jobs could be lost globally as a result of the pandemic, though that figure is likely to be revised up.
President Donald Trump said Thursday that he expects Saudi Arabia and Russia will end an oil war and dramatically cut production.
The global gut in production, coupled with a slowing economy from the coronavirus pandemic, has sent energy prices to lows not seen since 2002. Trump tweeted that he had spoken with Saudi Crown Prince Mohammad Bin Salman days after talking to Russian President Vladimir Putin about the matter.
Trump tweeted; "I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!"
Last month Saudi Arabia's state-run oil giant Saudi Aramco said it would increase its crude oil production to 12.3 million barrels a day in April, a record. Over the past quarter, the price of crude has fallen harder than at any point in history, plunging almost 70%, to around $20 per barrel.
According to the American Petroleum Institute, U.S. crude inventories rose by 10.5 million barrels last week, well over twice what energy analysts had been expecting.
Low crude prices make many domestically-produced U.S. energy sources cost-prohibitive, and a shock to the energy sector would mean thousands of jobs lost. At the same time, for the most consumers, falling oil prices are a blessing. Some stations are selling gasoline for less than $1 a gallon, though closer to $2 is the norm.
In early March, Russia refused to join the OPEC oil cartel in proposed production cuts aimed at supporting prices. That led Saudi Arabia, the leading OPEC member, to change course by cutting prices and signaling it would ramp up production.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday said buyers have so far cancelled orders worth US$ 3 billion following the outbreak of coronavirus.
About 1,092 factories reported that 943.12 million pieces of RMG products worth US$ 3 billion have either been cancelled or held up until 5pm on Thursday, according to BGMEA sources.
This cancellation will affect approximately 2.16 million Bangladeshi workers, the sources said.
Earlier on March 23, BGMEA President Dr Rubana Huq said buyers so far cancelled orders worth US$ 1.48 billion.
On a video message she said “We’re facing a dire situation. All the buyers from different places, countries and continents are suspending the orders.”
She also said there are 12 lakh workers in those factories.
Wall Street's major averages tumbled on Wednesday amid deepening concerns over the rapid spread of COVID-19 in the country.
The Dow Jones Industrial Average slumped 973.65 points, or 4.44 percent, to close at 20,943.51. The S&P 500 fell 114.09 points, or 4.41 percent, to 2,470.50. The Nasdaq Composite Index shed 339.52 points, or 4.41 percent, to 7,360.58.
The three major averages dropped more than 5 percent at session lows.
All the 11 primary S&P 500 sectors pulled back noticeably, with utilities and real estate both down more than 6 percent at the close, representing the two worst-performing groups.
The United States became the first nation with more than 200,000 COVID-19 infections on Wednesday, according to a new tally from Johns Hopkins University.
As of Wednesday afternoon, a total of 203,608 confirmed cases have been reported in the United States, with 4,476 deaths, showed the tally updated by the university's Center for Systems Science and Engineering.
Health experts with the White House Coronavirus Task Force said Tuesday that even with the Trump administration's national social distancing guidelines in place, Americans still should be prepared for the prospect of the coronavirus causing 100,000 to 240,000 deaths in the country.
U.S. President Donald Trump on Tuesday warned that the nation should prepare for "a very painful, very, very painful two weeks."
On the data front, economic activity in the manufacturing sector contracted in March amid the coronavirus fallout, the Institute for Supply Management (ISM) reported on Wednesday. The ISM manufacturing index slipped to 49.1 percent in March from the February reading of 50.1 percent.
U.S. private sector employment decreased by 27,000 jobs from February to March, according to payroll data company Automatic Data Processing on Wednesday.