WITA Panelists Express Thoughts on Trade in Aftermath of COVID-19 Response
While some are saying the disruption of COVID-19 is going to convince businesses to turn away from just-in-time approaches (see 2005190050), the chief economist at Flexport thinks those predictions are overblown. “Resiliency is a great thing if you can achieve it. The question is, at what cost,” Phil Levy said. Just-in-time inventory management “came from cost pressures. Businesses were facing cost pressures. I don’t think those pressures are going to abate.”
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Levy, who was speaking on a Washington International Trade Association webinar May 21, noted that costs have increased because of COVID-19 -- for instance, he said, air freight prices are higher than they've been in decades.
Ralph Carter, staff vice president for regulatory affairs at FedEx, expects a better bounce back for sales than happened in the wake of the 2008 recession. But some things are going to last, he believes, such as more online shopping. Carter said he hopes that the rise in e-commerce motivates countries to negotiate a better e-commerce plurilateral at the World Trade Organization. He said that so far, those negotiations have been focused on data flows, but he thinks they should also be talking about how to ease the movement of low-value packages. The Trade Facilitation Agreement at the WTO was “not as ambitious as we would have hoped,” he said. “The simpler we can make it for [small businesses] to sell their products across the world, the better it is for them.”
Carter also predicted that foreign countries' Customs authorities will be conducting more rigorous inspections “to make sure they’re not losing any revenue.”