Impact of Covid-19 on Tunisian Imports

The COVID-19 pandemic significantly disrupted trade flows between countries, thereby revealing the vulnerability of global value chains. This unexpected event sparked a public debate on devising new policies to increase the resilience of value chains. This study identifies vulnerabilities related to supply chains with a specific focus on Tunisian imports during the period 2019-20. To this end, we select three potential drivers of import vulnerability based on post-pandemic reports and discussions and assess their impact on Tunisia’s overall imports using a quantitative analysis. For each product, we consider: (1) the market concentration of Tunisia’s suppliers, (2) the intensity of imports, and (3) COVID-19 products – that we call ‘essential products’ – as a potential source of import vulnerability, the impact of which we assess separately. These factors are country-specific product characteristics. Then, we identify a model based on a first differences estimator to assess the impact of the change in vulnerable imports on the change in total imports at the country-month and country-quarter levels using import data for the period 2019-20. Finally, we use input-output linkages to assess the level of exposure of Tunisia’s local industries to vulnerable supplies from partner countries through a downstream propagation approach. This framework will help us get insights into Tunisia’s most sensitive imports and industries.