EFFECTS OF THE 2003 SARS OUTBREAK ON U.S. INTERNATIONAL TRADE WITH THE ASIA-PACIFIC REGION: INVESTIGATING THE INTERCONNECTEDNESS OF A GLOBAL HEALTH EMERGENCY AND TRADING RELATIONS

Abstract

The ongoing coronavirus/COVID-19 outbreak is showing how the economic consequences of infectious disease outbreaks stretch far and wide. However, many viral outbreaks do not reach the pandemic level, staying largely contained to the regions of origination, and still have immense economic impacts on affected countries. Given the increasing interconnectedness of world economies, regional economic effects resulting from an infectious disease outbreak can potentially be consequential for economies in countries not directly affected by the outbreak. International trade is a potentially important channel through which epidemics can cause reverberating economic effects. This study investigates the effect of the 2003 SARS outbreak on U.S. international trade in the Asia-Pacific region, focusing on U.S. exports and imports. Using monthly trade data spanning an observation period of 1999 to 2006 in an econometric difference-in-differences framework, results suggest a significant reduction of U.S. imports from SARS-affected countries in 2003 and the years following the SARS outbreak, suggesting a contractionary effect to U.S. imports from the region, as well as a temporary increase of U.S. exports to countries that faced epidemic transmission of SARS in 2003 followed by a decrease in 2005, suggesting a temporary reliance on foreign goods in those countries. These results indicate that even regional infectious disease outbreaks can cause tangible economic effects to countries outside the region. These findings underscore the importance of efforts like the Global Health Security Agenda for improving countries’ preparedness to infectious disease outbreaks—including surveillance, early detection, and rapid emergency control measures, which are proving more necessary than ever considering current events— for not only improving public health but also for stabilizing the global economy.