This chapter provides a comprehensive overview of the COVID-19 pandemic, setting the stage for a detailed understanding of its widespread impact. It begins by tracing the chronological progression of the pandemic, with a focus on identifying periods of heightened intensity. This background serves as a foundation for a deeper analysis of how the pandemic has affected various aspects of trade within the European Union. Particular attention is given to the trade in industrial goods, a sector that has been notably vulnerable to issues of counterfeiting during this period. This exploration aims to shed light on the multifaceted effects of the COVID-19 pandemic on the European Union's trade dynamics, offering insights into the challenges and adaptations that have arisen in this unprecedented global health crisis.
Illicit Trade in Fakes under the COVID-19
2. International trade during the pandemic: Facts, trends, and challenges
Abstract
2.1. Chronology and scale of the pandemic
The COVID-19 pandemic, a global health crisis triggered by the novel coronavirus SARS-CoV-2, was a defining event of the early 21st century. First detected in Wuhan, in The People’s Republic of China (hereafter “China”), in December 2019, the virus rapidly spread across the globe despite concerted efforts to contain it. Characterised by a range of symptoms from mild or asymptomatic to severe and fatal, COVID-19 posed a unique challenge due to its airborne transmission. By 10 December 2023, the pandemic had resulted in nearly 7 million confirmed deaths, underlining its devastating impact.1 The World Health Organization (WHO) acknowledged the severity of the situation by declaring it a Public Health Emergency of International Concern on 30 January 2020, a status that remained in effect until 5 May 2023.
The response to the pandemic was multifaceted, involving both medical and societal interventions. On the medical front, treatments primarily included the use of novel antiviral drugs alongside traditional methods of symptom control. Simultaneously, an unprecedented global research effort focused on developing effective vaccines. By December 2020, several vaccines had been developed and were being deployed worldwide, marking a significant milestone in the fight against the pandemic. These vaccines played a critical role in controlling the spread of the virus and reducing the severity of the disease.
Governments worldwide implemented a range of measures to mitigate the impact of the pandemic. These included travel restrictions, lockdowns, and the closure of businesses, all aimed at reducing the spread of the virus. Workplaces adopted hazard controls, and public health policies such as mask mandates, quarantines, and extensive testing and contact tracing systems were put in place. These measures, varied in intensity and duration across different regions, significantly altering daily life and with profound economic and social repercussions. The pandemic not only challenged healthcare systems, but also reshaped global politics, economies, and societies.
In terms of chronology, the number of daily cases of COVID-19-related deaths started to rise rapidly in March 2020, exceeding 1 000 deaths on 20 March (Figure 2.1).
The worsening health crisis forced many governments to impose restrictions, limiting citizens’ exposure to the COVID-19 virus. For example, in the European Union by mid-March 2020 the majority of governments had imposed stay-at-home requirements and restrictions on public transport. In more than ten countries, restrictions on internal movements entered into force. The first wave of COVID-19 was relatively short and on 10 May the number of deaths in the European Union fell below 1 000. It stayed far below that level for over five months, until October. As shown in the second panel of Figure 2.1, during this period many of the restrictions were progressively relaxed in the EU Member States. However, in October 2020, the moving average number of COVID-19 related deaths started to rise again, exceeding 1 000 daily cases on 22 October 2020. It did not fall below 1 000 deaths until 20 May 2021. The second wave of COVID-19 deaths was much longer and more severe than the first wave. At its worst, end of November 2020/beginning of December 2021, the moving average number of COVID-19 related deaths exceeded 3 500. During the second wave, some government restrictions were reintroduced in EU Member States. The third wave of COVID-19 in the European Union started in autumn 2021 and lasted until the beginning of April 2022. This time, however, the number of countries introducing severe COVID-19 related restrictions was much lower and the consequences for the socio-economic situation in EU countries were not as severe as in the case of the first two waves.
Figure 2.1. Evolution of COVID-related deaths and restrictions by EU governments
Note: Upper panel presents rolling 7-day average number of deaths associated with COVID-19, aggregated for EU27. Dashed line was set at value of 1 000 deaths per day and the grey area indicates periods when number of COVID-19 related deaths equalled or exceeded 1 000.
Lower panel presents number of EU countries imposing COVID-related restrictions.
Source: University of Oxford COVID-19 government response tracker, https://www.bsg.ox.ac.uk/research/COVID-19-government-response-tracker
2.2. Volume of international trade during the pandemic in the European Union
In general, the COVID-19 crisis triggered important changes in the volume and structure of international trade, including import patterns in the EU27. Both this health crisis and changes in international trade patterns posed challenges to custom officers and impacted their ability to fight intellectual property rights (IPR) infringements.
2.2.1. General impacts
As shown in Figure 2.2, COVID-19 had impacts on EU27 imports starting from February 2020; the effects on major trading partners, however, varied (Figure 2.3). The overall value of imports into the EU27 stayed at a relatively low level, as compared to the pre-COVID-19 period, between the first and second COVID-19 waves; however, it started to rise during the second wave. The value of imports took off after the removal of restrictions and peaked in September 2022.
Factors driving the changes in world trade during the pandemic included:
Supply chain disruptions: Lockdowns and social distancing measures disrupted global supply chains. Many factories had to close temporarily, causing delays in production and shipments of goods.
Falling demand: Reduced economic activity in many regions led to lower demand for goods and services, impacting trade. Sectors heavily affected by containment measures, such as tourism and aeronautics, were particularly hard hit (Arriola, C., P. Kowalski and F. van Tongeren, 2022[1]).
Shift to local production: Many companies sought to reduce their dependence on international supply chains by relocating part of their production to local facilities. This led to an increase in domestic production in certain sectors.
Protectionist measures: Some countries imposed protectionist measures, such as higher tariffs and export restrictions, to protect their supply of essential goods.
Disrupted shipping: Pandemic-related restrictions led to disruptions in shipping, with delays and cancellations of voyages, affecting transport costs and delivery times.
These factors contributed to the slowdown in world trade. However, from the second wave of the pandemic onwards, trade began to recover. The adaptation of the various players to this exceptional situation, as well as more specific factors described below, underpinned the recovery.
Changes in e-commerce: E-commerce grew significantly during the pandemic, as an increasing number of consumers turned to online shopping to avoid physical contact in stores (OECD, 2020[2]).
Transition to digital services: Travel restrictions encouraged a transition to digital services in many sectors, leading to an increase in the exchange of such services (OECD, 2020[2]; OECD, 2020[3]).
Accelerated digitization of customs formalities: To facilitate trade during the pandemic, many countries accelerated the digitization of their customs procedures to reduce delays and limit physical contact (OECD, 2020[2]).
Figure 2.2. Value of overall external imports into the European Union
January 2018 to July 2023
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Concerning the patterns of imports by the European Union from its main trading partners, after a brief decline, at the beginning of 2020 EU imports from China reached the pre-COVID-19 value in May 2020 and exceeded this level in the middle of the second COVID-19 wave. As imports from other major partners of the EU27, including the United States and the Russian Federation (hereafter “Russia”), declined during this period, China strengthened its position as a major exporter to the EU27 (Arriola, C., P. Kowalski and F. van Tongeren, 2021[4]; OECD, 2022[5]). Its share in total EU27 external imports exceeded 30% in May 2020. Among the economies found in past reports in this series on illicit trade to be the provenances of counterfeit products, the share of Singapore and Hong Kong (China) in total EU27 imports rapidly rose at the beginning of the first COVID-19 wave in the European Union, mainly due to lower volumes from other economies. Imports from those economies started to decrease, however, both in absolute and relative value after the first wave. Conversely, imports from Türkiye rapidly declined during first, but then started to rise in between the two first waves. From the beginning of 2021, amid growing volumes of EU27 imports, there was a general convergence to the long term pre-COVID-19 patterns as regards the shares of the major trade partners in the total imports of the EU27, although this process was somewhat slower for East Asian economies.
Figure 2.3. Evolution of the absolute value of imports from the main trading partners of the European Union
January 2018 and July 2023
Source: COMEXT, Eurostat.
2.3. Impacts on the sectoral composition of trade
2.3.1. Most frequently traded products in both licit and illicit spheres
As shown in Figure 2.4 to Figure 2.8, profound changes occurred in the product composition of EU27 external imports during the COVID-19 crisis (Arriola, C., P. Kowalski and F. van Tongeren, 2021[4]; Arriola, C., P. Kowalski and F. van Tongeren, 2022[1]; OECD, 2022[5]). The share of electronic products in total imports rose during the first wave of COVID-19 (Figure 2.4) and although it went down rapidly after the restrictions ceased, it remained over its pre-COVID-19 average during the entire period of the pandemic restrictions and started to rise again ahead of the third wave. In the Spring of 2023, it increased to over 19% of total EU imports (an increase of over 20% in comparison to pre-pandemic level).
Figure 2.4. Evolution of external imports of electrical machinery and electronics into the EU27
Note: Dashed line reflects the average share in total EU27 imports (excluding imports in HS27 comprising crude oil) for the period Jan 2018- Feb 2020. Figures present seasonally adjusted data. Shares were calculated without taking into account the value of external EU imports into the United Kingdom before Brexit nor the value of EU27 imports from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Conversely, imports of clothing and clothing accessories registered a steep decline during the first wave of COVID-19 (Figure 2.5). Imports quickly recovered to pre-pandemic levels in August 2020, but declined again before the second wave. As a result, since end of 2021, the share of clothing and clothing accessories in total EU27 imports has remained at 85-90% of their pre-pandemic level.
A similar pattern can be observed in the case of leather goods, including handbags. Its import level quickly declined to 70% of its pre-pandemic level in March 2020 and remained below 90% during 2021-2023 (Figure 2.6).
Figure 2.5. Evolution of external imports of clothing and accessories into the EU27
Note: Dashed line reflects share in the total import of the European Union (excluding imports in HS27 comprising crude oil) for the period Jan 2018- Feb 2020. Figures present seasonally adjusted data. This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Figure 2.6. Evolution of external imports of leather products into the EU27
Note: Dashed line reflects share in total imports of the European Union (excluding imports in HS27 comprising crude oil) for the period Jan 2018- Feb 2020. Figures present seasonally adjusted data. This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
EU27 external imports of goods grouped under HS heading 33, including perfumery and cosmetics, also registered a decline during the first wave of COVID-19, staying below its pre-pandemic level during the whole period of COVID-related restrictions (Figure 2.7). During the third wave of COVID-19, imports of those goods registered an even bigger decline. However, since August 2022, EU27 imports of goods in HS 33 started to increase, reaching its pre-pandemic share in total EU27 imports in June 2023.
Figure 2.7. Evolution of external imports of perfumery and cosmetics into the EU27
Note: Dashed line reflects share in total imports of the EU27 (excluding imports in HS27 comprising crude oil) for the period Jan 2018- Feb 2020. Figures present seasonally adjusted data. This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat
Finally, EU27 imports of pharmaceutical products (HS30) were highly volatile between January 2018 and July 2023 (Figure 2.8). The share of those goods in total EU27 imports started to rise at the end of 2020, peaking during the first wave of COVID-19. In general, the share remained above pre-pandemic levels during the whole period of COVID-related restrictions, with some declines registered between the first and second waves and in February 2022. After the abolition of COVID-related restrictions, the share of imports of pharmaceutical goods in total imports of the EU27 remained in general at the pre-COVID-19 level, although with a steep decline during most of 2022.
Figure 2.8. Evolution of external imports of pharmaceuticals into the EU27
Note: Dashed line reflects the share in total imports of the EU27 (excluding imports in HS27 comprising crude oil) for the period Jan 2018- Feb 2020. Figures present seasonally adjusted data. This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
2.3.2. COVID-19 related products
Not surprisingly, the global pandemic has also boosted trade in products directly related to mitigating and combatting the crisis (OECD, 2022[5]). These products include COVID-19 test kits, instruments and apparatus used in diagnostic testing, protective garments, disinfectants and sterilization products, medical devices and equipment, medical consumables, oxygen therapy equipment as well as medical vehicles and furniture.2 Consequently, the share of these products, increased in total EU27 imports during the pandemic, starting to rise in the beginning of 2020 when COVID-19 was already affecting East Asian economies (Figure 2.9). At its peak, just at the end of first COVID-19 wave, the value of these imports exceeded 10.5% of the total value of EU27 import (excluding goods in HS chapter 27). It remained at the level of 9% of total imports during the whole period of COVID-related restrictions. The share of COVID-related goods in total EU27 imports stabilised at 8.5% of total imports until the final phase of the third wave of COVID-19 and then it declined to below 7% during the most of 2022.
Figure 2.9. Evolution of shares of COVID-related products in the overall value of EU external imports (excluding imports in HS 27 comprising crude oil)
January 2018 to July 2023
Note: Shares were calculated without taking into account the value of external EU imports into the United Kingdom before Brexit nor the value of EU27 imports from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
As shown in Figure 2.9 and Figure 2.10, import patterns of various types of COVID-19 related products differed somewhat from the general pattern. It reflected changing patterns of demand during different phases of the pandemic, but also the availability of products in world markets as the possibility to import certain products was also affected by COVID-19 in partner countries.
In general, shares of disinfectants and sterilisation products and medical consumables rose rapidly at the beginning of COVID-19, but then gradually declined, falling to its pre-pandemic level in July 2020 in the case of medical consumables, and at the end of COVID-related restrictions in the case of disinfectants and sterilisation products.
The ratio of protective garments in overall EU27 imports rose rapidly during the first COVID-19 wave and stayed well above the pre-pandemic level at the beginning of 2021 during the second COVID wave. It then gradually declined until the beginning of 2022, when it fell to its pre-pandemic level.
Figure 2.10. Evolution of shares of COVID-related products in the overall value of EU external imports (excluding imports in HS 27 comprising crude oil)
January 2018 to July 2023
Note: The first panel presents the shares of total COVID-related products; the following panels present the value of products in categories A to D. Shares were calculated without taking into account the value of extra EU imports to the United Kingdom before Brexit nor the value of imports of EU27 from the United Kingdom after Brexit. Category A: COVID-19 test kits/Instruments and apparatus in diagnostic testing; Category B: protective garments and the like; Category C: disinfectants and sterilisation products; Category D: oxygen therapy equipment. For more details on products under categories A to D, see Annex 3.B.
Source: COMEXT, Eurostat.
The share of oxygen therapy equipment saw its peaks just after the first COVID-19 wave and at the beginning of second wave, but returned to pre-pandemic level in the second half of 2021.
The ratio of import of test and diagnostic testing kits in total EU27 imports registered spikes during successive COVID-19 waves, more than doubling its pre-COVID-19 level during the second wave.
Figure 2.11. Evolution of shares of Covid-related products in the overall value of EU external imports (excluding imports in HS 27 comprising crude oil), categories E to G
January 2018 to July 2023
Notes: First panel presents shares of total Covid related products, other panels value of products in categories E to G.
Shares were calculated without taking into account value of extra EU import to the United Kingdom before Brexit nor the value of imports by EU27 from the United Kingdom after Brexit. Category E: medical consumables; Category F: medical devices and equipment; Category G: medical vehicles and furniture. For more details on products under categories E to G, see Annex 3.B.
Source: COMEXT, Eurostat.
An analysis of the origin of these additional imports shows that for some products registering big spikes in import demand, the additional trade was from economies that played a limited role in EU27 imports of those products before the pandemic. This was the case of imports of test kits ( Figure 2.A.4 in Annex 2.A) and oxygen therapy equipment (Figure 2.A.7 in Annex 2.A) where China became the biggest source of imports for EU27 countries during the surge in demand during the second wave of COVID-19. A similar situation occurred in the case of imports of protective garments. Increased demand was partially covered by imports from Malaysia and Türkiye, countries that did not play an important role in imports of those goods before and after the pandemic. COVID-19 related products are examples of sensitive goods that require additional certification procedures, so such sudden changes in import patterns may have created additional challenges to custom officers when clearing those shipments.
References
[1] Arriola, C., P. Kowalski and F. van Tongeren (2022), “Understanding structural effects of COVID-19 on the global economy: First steps”, OECD Publishing, Paris, https://doi.org/10.1787/f6a9ef88-en.
[4] Arriola, C., P. Kowalski and F. van Tongeren (2021), The impact of COVID-19 on directions and structure of international trade, OECD Publishing, Paris, https://doi.org/10.1787/0b8eaafe-en.
[5] OECD (2022), International trade during the COVID-19 pandemic: Big shifts and uncertainty, https://www.oecd.org/coronavirus/policy-responses/international-trade-during-the-covid-19-pandemic-big-shifts-and-uncertainty-d1131663/.
[3] OECD (2020), Connecting businesses and consumers during COVID-19: Trade in parcels, https://read.oecd-ilibrary.org/view/?ref=135_135520-5u04ajecfy&title=Connecting-Businesses-and-Consumers-During-COVID-19-Trade-in-Parcels.
[2] OECD (2020), Getting goods across borders in times of COVID-19, OECD Policy Responses to Coronavirus (COVID-19).
Annex 2.A. Additional figures
Annex Figure 2.A.1. Evolution of shares of main trading partners of the European Union in the overall value of EU external imports
January 2018 to July 2023
Note: Shares were calculated without taking into account value of extra EU import to United Kingdom before Brexit nor value of import of EU27 from United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Annex Figure 2.A.2. Evolution of absolute value of licit imports from economies found to be the main provenance of counterfeit goods
January 2018 to July 2023
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit
Source: COMEXT, Eurostat.
Annex Figure 2.A.3. Evolution of shares of licit imports in the overall value of EU external imports from economies found to be the main provenance of counterfeit goods
January 2018 to July 2023
Note: Shares were calculated without taking into account the value of extra EU import to United Kingdom before Brexit nor the value of imports by EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Annex Figure 2.A.4. Evolution of absolute value of EU27 imports of COVID-19 test kits and instruments and apparatus used in diagnostic testing
January 2018 to July 2023, by main exporters to the EU27
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Annex Figure 2.A.5. Evolution of absolute value of EU27 import of protective garments and the like, by provenance economies
January 2018 to July 2023
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Annex Figure 2.A.6. Evolution of absolute value of EU27 import of disinfectants and sterilisation products, by provenance economies
January 2018 to July 2023
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Annex Figure 2.A.7. Evolution of absolute value of EU27 import of oxygen therapy equipment, by provenance economies
January 2018 to July 2023
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Annex Figure 2.A.8. Evolution of absolute value of EU27 import of medical devices and equipment, by provenance economies
January 2018 to July 2023
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Annex Figure 2.A.9. Evolution of absolute value of EU27 import of medical consumables, by provenance economies
January 2018 to July 2023
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
Annex Figure 2.A.10. Evolution of absolute value of EU27 import of medical vehicles and furniture, by provenance economies
January 2018 to July 2023
Note: This value does not include external EU imports into the United Kingdom before Brexit nor the value of imports of the EU27 from the United Kingdom after Brexit.
Source: COMEXT, Eurostat.
remained the primary provenance economies for counterfeit
Notes
← 1. Source: WHO Coronavirus (COVID-19) Dashboard | WHO Coronavirus (COVID-19) Dashboard With Vaccination Data (Accessed on 12 December 2023).
← 2. See Annex 3.A for a detailed description of these products.