An anatomy of the impact of COVID‐19 on the global and intra‐Commonwealth trade in goods

This article employs gravity modeling to examine the effect of COVID‐19 on global and intra‐Commonwealth trade. It uses bilateral monthly exports, number of COVID‐19 cases and deaths and the stringency of measures. The main novelty is the use of price indices as proxies for multilateral resistance terms, which allow us to identify, supply, and demand effects of COVID‐19 on bilateral trade. The incidence of COVID‐19 impacts Commonwealth trade flows, the effect varies with the development level. High numbers of COVID‐19 cases, including deaths, in low‐income importers reduced Commonwealth exports unlike high‐income importers that show higher exports. The incidence of COVID in an exporters' neighbouring countries impacted trade and restrictions in high‐income countries increased Commonwealth trade. Short‐term trends project a negative change in both exports and imports of Commonwealth countries.