President Joe Biden rallied world leaders at G-20 to resolve the global supply chain challenges and other disruptions affecting global commerce.
The summit was held on Sunday with other world leaders on the sidelines of the G-20.
The pandemic has wreaked havoc on practically every part of the global supply chain, which is the largely unseen network of manufacturing, transportation, and logistics that transports items from where they are made, mined, or farmed to their final destination.
What really happened
The problems date back to early last year, when the pandemic was still in its early stages. The proliferation of coronavirus infections struck factories in sections of the world where a lot of the world’s manufacturing capacity is located, such as China, South Korea, and Taiwan, as well as Southeast Asian nations like Vietnam and European industrial heavyweights like Germany. Because workers were sick or on lockdown, many factories had to shut down or cut production. In anticipation of a decline in demand for delivering products around the world, shipping companies trimmed their schedules in response.
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Consumers, on the other hand, channeled the money they would have spent on other experiences to things for their homes, which were now being used as workplaces and schools. The timing and volume of customer purchases wreaked havoc on the system. Factories whose output were relatively predictable increased production to meet an influx of orders.
What they are saying
Biden told world leaders at a meeting to address supply chain bottlenecks on the sidelines of the G20 in Rome: “We have to take action now, together with our partners in the private sector, to reduce the backlogs that we’re facing. And then, we have to prevent this from happening again in the future.”
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“Now that we have seen how vulnerable these lines of global commerce can be, we cannot go back to business as usual. This pandemic won’t be the last global health crisis we face. We also need to increase our resilience in the face of climate change, natural disasters, and even planned attacks.”
A written White House summary of the talks said countries expressed willingness to work together to make supply chains more resilient. It said they had agreed to work for more transparency and information-sharing between countries and on the need to have multiple reliable suppliers of raw materials, intermediates and finished goods.
“Openness and communication can promote a swift response to disruptions to supply chains – like those that the globe is facing right now – and allow other players within a supply chain to take mitigating steps,” the White House summary said.
“We should avoid any unnecessary trade restrictions and maintain free flow of goods and services,” it said.
The leaders emphasized also, the need for security, especially in technology supply chains, and for fair and sustainable labour conditions and said they would work with the private sector to reach these goals.