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Direct and Indirect Effects of the COVID‐19 Pandemic on EU Agri‐Food Trade
ABSTRACT Introducing and lifting COVID‐19 restrictions caused significant disruptions throughout the world economy, including in international trade. This study employs a panel gravity model to examine the impact of the pandemic on the agri‐food trade of EU countries. Specifically, we estimate the direct effects of the intensity of lockdown‐type policies on bilateral trade across country, product, and time dimensions, and the indirect effects of those policies as they work through domestic market impacts. We also decompose the indirect effects of COVID‐19 between the domestic demand side and supply side impacts. We provide insights into the sources of pandemic disruptions by comparing a ‘no‐COVID’ counterfactual scenario from March 2020 to February 2022 to the COVID‐19 reality. Our data analysis reveals a loss of 162 billion EUR in agri‐food trade due to direct and indirect effects of COVID‐19, equivalent to 11.3% of imports over the period. Approximately half of this total is comprised of intra‐EU bilateral trade. The COVID‐19 effects were proportionally greatest in the trade of fats and oils, and animal‐origin products, while vegetable‐origin and processed food products were affected only about half as much. Reduced intra‐industry demand was a dominant source of indirect effects in the trade of non‐processed food. In turn, the weakening of consumer demand was the main factor behind trade losses in processed food imports. The proportional trade impacts differ greatly across EU countries.
Twenty Years of Poland’s EU Membership: What Is Progress in the Agri-Food Sector?
The paper aims to assess the dynamics of production and income in Polish agriculture against the agriculture in the entire EU and estimate the trade-related effects of participation in the Single European Market over the 20 years of Poland’s EU membership. The analyses showed that a positive phenomenon observed in Polish agriculture after joining the EU was a stable upward trend in agricultural production and the strengthening of farm links with the agricultural market. This was followed by increased agricultural income. Incorporation into the Single European Market triggered an increase in the value of Polish trade in agri-food products. Poland strengthened its position as a net exporter of agri-food products and proved the ability of the food industry to compete effectively in foreign markets. Except for cognitive value, the research can be a benchmark for other countries aspiring to EU membership and constitute a justification for their move toward accession. Long-run ex post analysis of trends in production, income, and foreign trade offers a background for assessing the efficiency of agricultural and trade policy actions taken up to date. The recommendation arising from the analysis and the new conditions related to the European Green Deal and the liberalization of trade policy for the import of agri-food products from outside the European Union is as follows: given the benefits of the liberalization of foreign trade in agri-food products, it should be supported, but it should not be allowed to make agricultural production in the country unprofitable or threaten food self-sufficiency.