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.
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.
A Canadian company said Tuesday it plans to start construction of the disputed Keystone XL oil sands pipeline through the U.S. Midwest in April, after lining up customers and money for a proposal that is bitterly opposed by environmentalists and some American Indian tribes.
Construction would begin at the pipeline's border crossing in Montana, said TC Energy spokesman Terry Cunha. That would be a milestone for a project first proposed in 2008.
The announcement came after the company secured $1.1 billion in financing from the Canadian provincial government of Alberta to cover construction through 2020 and agreements for the transport of 575,000 barrels of oil daily.
Despite plunging oil prices in recent weeks, Alberta Premier Jason Kenney said the province's resource-dependent economy could not afford for Keystone XL to be delayed until after the coronavirus pandemic and a global economic downturn have passed.
"This investment in Keystone XL is a bold move to retake control of our province's economic destiny and put it firmly back in the hands of the owners of our natural resources, the people of Alberta," Kenney said.
A spokeswoman for Montana Gov. Steve Bullock said he had been in contact with Kenney to raise concerns over an estimated 100 workers coming into the state for the line's construction. Bullock said that could further strain rural health systems facing the coronavirus.
"TC Energy holds a tremendous responsibility to appropriately manage or eliminate this risk and we will continue to monitor the plans for that response," Bullock spokeswoman Marissa Perry said.
There was only one confirmed infection as of Friday from eastern Montana counties along the line's route, but the virus has been spreading in rural areas in recent days.
Company representatives said they would follow the guidance of government and health authorities to determine the best way to keep construction crews and the public safe.
The pipeline was rejected twice by the administration of President Barack Obama over worries it could make climate change worse. President Donald Trump has been a strong proponent of the $8 billion project and issued it a permit that environmentalists say was illegal.
A court hearing in the permit dispute is set for April 16 before U.S. District Judge Brian Morris in Great Falls. Morris has previously ruled against the project.
The company has previously said it also plans in April to begin work on camps where pipeline construction workers would live in Fallon County, Montana and Haakon County, South Dakota.
The company said the 1,200-mile (1,930-kilometer) pipeline would start sending oil to the U.S. in 2023. It's designed to move up to 830,000 barrels (35 million gallons) of crude daily at from the oil sand fields of western Canada to Steele City, Nebraska, where it would connect to other pipelines that feed oil refineries on the U.S. Gulf Coast.
Opponents in January asked Morris to block any work. They said clearing and tree felling along the route would destroy bird and wildlife habitat. Native American tribes along the pipeline route have said that the pipeline could break and spill oil into waterways like Montana's Missouri River.
The judge in December had initially denied a request from environmentalists to block construction because no work was immediately planned.
TC Energy filed reports with court in recent weeks declaring its intentions to start work.
"At this time, we are continuing with our planned activities and will adjust if it becomes necessary," Cunha said.
The remaining $6.9 billion in construction costs is expected to be funded through a $4.2 billion loan guaranteed by the Alberta government and a $2.7 billion investment by TC Energy.
Once the project is complete, TC Energy expects to buy back the Alberta government's investment and refinance the $4.2 billion loan.
"We thank U.S. President Donald Trump and Alberta Premier Jason Kenney as well as many government officials across North America for their advocacy without which, individually and collectively, this project could not have advanced," TC Energy chief executive Russ Girling said in a statement.
A representative of the Sierra Club said the decision to push forward with the project amid the coronavirus pandemic was "a shameful new low" for the company. Pipeline opponents contend workers could inadvertently spread the virus to rural areas with limited health care services.
"By barreling forward with construction during a global pandemic, TC Energy is putting already vulnerable communities at even greater risk," said the Sierra Club's Catherine Collentine. "We will continue to fight to ensure this dangerous pipeline is never completed."
Opposition to another pipeline built through the region several years ago, the Dakota Access Pipeline, culminated in months of protests, sometimes violent, near the Standing Rock Sioux Reservation that straddles the North Dakota-South Dakota state line.
Lawmakers in some states have sought to curb the possibility of similar protests against Keystone XL.
South Dakota Gov. Kristi Noem successfully pushed a legislative measure to revive the state's criminal and civil penalties for rioting and inciting a riot, drawing demonstrations from groups opposed to the pipeline. The law she signed last week enacts criminal and civil penalties for people who "urge" force or violence.
Noem said she spoke with TC Energy on Monday and did not expect construction to begin in South Dakota until the summer.
Another oil pipeline in TC Energy's Keystone network in October spilled an estimated 383,000 gallons (1.4 million liters) of oil in eastern North Dakota.
Critics have said a damaging spill from Keystone XL is inevitable given the length of the line and the many rivers and other waterways it would cross beneath.