Global Economy, Trade & Transportation August 2022-

Written by  //  June 24, 2024  //  Global economy, Trade & Tariffs  //  No comments

It’s not just Baltimore with a bridge problem
Riley Callanan
Supersized shipping. The 964 foot container ship, MV Dali, was being steered by a pilot specialized in the port when it lost power and hit one of the bridge’s main pylons.
The collapse draws attention to a pressing problem in the US supply chain: cargo ships – central to the modern economy – have gotten exponentially bigger as US bridges are aging.
When the Francis Scott Key Bridge was built between 1972 and 1977 the average container ship carried between 500-800 twenty-foot shipping containers – known as TEUs in the shipping business. But advances in engineering allowed ships to balloon to an average of 4,000 TEUs by 1985. Since then, carriers have continuously scaled up capacity, and Dali, manufactured in 2015, had a capacity of 10,000 TEUs. According to bridge experts, no bridge pylon could survive being hit by a vessel of this size.
The continuous growth has pitted ports against each other to attract bigger vessels. The expansion of the Panama Canal in 2016 upped the stakes, with ports along the East Coast racing to dredge their harbors to accommodate the larger ships now traveling through the canal.
The Port of Baltimore expanded to accommodate supersized ships in 2013. Since, it has grown into the 9th-busiest port for receiving foreign cargo.
… This is a global problem. Tuesday’s crash was the second time this month that a container ship hit a major road bridge. On Feb. 22 in Guangzhou, a port in southern China, a much smaller vessel carrying stacks of containers hit the base of a two-lane bridge, causing vehicles to fall. From 1960 to 2015, there were 35 major bridge collapses worldwide due to ship or barge collisions. 18 of those collapses happened in the United States.

24 June
‘It’s All Happening Again.’ The Supply Chain Is Under Strain.
(NYT) As Houthi rebels intensify strikes on vessels headed for the Suez Canal, global shipping prices are soaring, raising fears of product shortages and delays.
Late last year, Houthi rebels in Yemen began firing on ships entering the Red Sea en route to the Suez Canal, a vital artery for vessels moving between Asia, Europe and the East Coast of the United States. That prompted ships to avoid the waterway, instead moving the long way around Africa, lengthening their journeys by as much as two weeks.
Then, a severe drought in Central America dropped water levels in the Panama Canal, forcing authorities to limit the number of ships passing through that crucial conduit for international trade.
In recent weeks, dockworkers have threatened to strike on the East and Gulf Coasts of the United States, while longshore workers at German ports have halted shifts in pursuit of better pay. Rail workers in Canada are poised to walk off the job, imperiling cargo moving across North America and threatening backups at major ports like Vancouver, British Columbia.
The intensifying upheaval in shipping is prompting carriers to lift rates while raising the specter of waterborne gridlock that could again threaten retailers with product shortages during the make-or-break holiday shopping season. The disruption could also exacerbate inflation, a source of economic anxiety animating the American presidential election.
If the supply chain disturbances of the pandemic proved anything, it was this: Trouble in any one place tends to ripple out widely.
Since October, the cost of moving a 40-foot shipping container from China to Europe has increased to about $7,000, from an average of roughly $1,200, according to data compiled by Xeneta, a cargo analytics company based in Norway. That is well below the $15,000 peak reached in late 2021, when supply chain disruptions were at their worst, but it is about five times the prices that prevailed for the years leading up to the pandemic.
Rates to ship goods across the Pacific have multiplied by a similar magnitude. It now costs over $6,700 to transport a 40-foot container from Shanghai to Los Angeles, and nearly $8,000 for Shanghai to New York. As recently as December, those costs were near $2,000.

9 June
Middle powers’ new trade routes will be lifeblood of multipolar world
Burak Elmali
It’s not just China – from India to Russia and the Middle East, states are collaborating over trade corridors as an alternative to US power structures
(SCMP) Trade routes are vital in our interconnected world. Yet, they face significant challenges from regional conflicts, economic crises and funding uncertainties. Importantly, the shift from a US-led unipolar world to a multipolar one could also give rise to threats to global commerce.
In this new landscape, developing economies with ambitious foreign policy agendas – often labelled middle powers – are forging new alliances and seeking new avenues to navigate the uncertainty. While some Western experts dismiss these trends as “exaggerated panic”, reality tells a different story.
Brics is expanding, and US partners such as the Gulf nations are making long-term business contracts with China while still buying expensive US military hardware. Meanwhile, despite Western sanctions, Russia has stayed afloat partly thanks to China, which has benefited the most from this situation.
In this tumultuous landscape, global trade routes have become lifelines, enabling countries – major and middle powers alike – to challenge the monopoly of Western-dominated power structures.
China’s Belt and Road Initiative is a case in point. This multibillion-dollar project encompasses six major trade routes, extending from China to Europe via Central Asia and the Caucasus, to the Gulf through Pakistan, and Southeast Asia from its southern borders.
With this network, China is solidifying its trade influence through a route diversification strategy that protects against sanctions like those imposed on Russia, and mitigates risks associated with the “Malacca dilemma”: China vulnerabilities should the US blockade the Malacca Strait. But these routes are not risk-free. The China-Pakistan Economic Corridor, for one, faces significant terrorist threats, particularly around the Gwadar Port construction site.
Another alternative is the 7,200km International North-South Transport Corridor linking Indian ports to Iran, across the Caspian Sea, and finally to Russia. Although Tehran and Moscow, both despised by the US, are entangled in sanctions, New Delhi is pushing for this route, bargaining with Washington to get the partnership going.

27 March
See how the Key Bridge collapse will disrupt the supply of cars, coal and tofu
The Port of Baltimore is the top port in the nation for automobile shipments
The collapse of the Francis Scott Key Bridge in Baltimore on Tuesday cut off access to much of the city’s port — causing a suspension of vessel traffic that will disrupt a key trade lane and threaten to further tangle already-stressed supply chains.
The Port of Baltimore was the 17th largest in the nation by total tons in 2021 and an important artery for the movement of autos, construction machinery and coal. It handled 52.3 million tons of foreign cargo worth nearly $81 billion in 2023, according to Maryland data, and creates more than 15,000 jobs.

21 March
Somali pirates return, adding to global shipping crisis
By Giulia Paravicini, Jonathan Saul and Abdiqani Hassan
Pirates had been dormant for nearly a decade
2008-2014 attacks cost the global economy billions of dollars
Recent pirate raids are increasing costs for shippers
Pirates take advantage of security vacuum left by Houthi strikes
(Reuters) The raids are piling risks and costs onto shipping companies also contending with repeated drone and missile strikes by Yemen’s Houthi militia in the Red Sea and other nearby waters.
The waterways off Somalia include some of the world’s busiest shipping lanes. Each year, an estimated 20,000 vessels, carrying everything from furniture and apparel to grains and fuel, pass through the Gulf of Aden on their way to and from the Red Sea and Suez Canal, the shortest maritime route between Europe and Asia.

8 March
The Two Faces of Free Trade
Dani Rodrik
Whereas free trade was once the central cause of progressive reformers seeking to combat entrenched interests on behalf of ordinary people, now it is the bête noire of both right-wing nationalists and the mainstream left. To understand why attitudes changed so radically, one must follow the money.
(Project Syndicate) Growing trade did contribute to rising inequality and the erosion of the middle class in the United States and other advanced economies in recent decades. If free trade got a bad name, that is because globalization’s boosters ignored its downsides or acted as if nothing could be done about them. This blind spot empowered demagogues like Donald Trump to weaponize trade and demonize racial and ethnic minorities, immigrants, and economic rivals. Nor is antipathy to trade the province only of right-wing populists. It also includes radical leftists, climate activists, food-safety advocates, human-rights campaigners, labor unions, consumer advocates, and anti-corporate groups.
… Does trade promote peace, freedom, and economic opportunity, or does it foster conflict, repression, and inequality? In fact, the enigma is more apparent than real. Either outcome – or anything in between – depends on whom trade empowers.
… The post-WWII regime of multilateral free trade under American leadership would fare much better. Under GATT, commercial diplomacy replaced wars, and many non-Western countries – such as Japan, South Korea, Taiwan, and, most spectacularly, China – expanded their economies rapidly by leveraging global markets. By the 1990s, however, the trade regime had become a victim of its own success. Large corporations and multinationals, empowered by the expansion of the global economy, increasingly drove trade negotiations. The environment, public health, human rights, economic security, and domestic equity took a back seat. International trade had yet again moved away from Cobden and Hull’s original vision, turning into a source of international discord instead of harmony. The lesson of history is that turning trade into a positive force requires that we democratize it. That is the only way to ensure it serves the common good, rather than narrow interests – an important lesson to keep in mind as we reconstruct the world trade regime in the years ahead.

4 March
By the numbers: How conflict in the Red Sea disrupts global trade
As the conflict in the Middle East simmers on, companies are increasingly avoiding the Red Sea trade route.
(Politico) The Red Sea has turned from one of the world’s most important trade routes into a danger zone.
Tensions in the region have been escalating since November, when Yemen-based Houthis started launching drone and missile attacks against ships transiting the Red Sea. The Shiite military group’s attacks, meant to pressure Israel to stop its bombardment of Gaza, are leading to sustained delays and disruption in trade, along with surging shipping costs.
An increasing number of companies that transport vital raw materials and fuels have suspended operations in the area. They are rerouting their ships an additional 3,500 nautical miles around the Cape of Good Hope in South Africa — the route the Suez Canal was built to circumvent in 1869.
The Suez Canal is one of the most important trade routes in the world, accounting for around 10 percent of seaborne trade globally.
Volume of goods that pass through the Suez Canal, as a share of global seaborne trade between 2018 and 2023. Data extracted on Feb. 7, 2024.
Freight transport through the Red Sea has collapsed since November.
… Shipping costs for routes transiting through the Suez Canal have also increased massively as a result of the violence in the region.

The WTO’s 13th Ministerial Conference (MC13) will take place from 26 to 29 February 2024 in Abu Dhabi, United Arab Emirates. Ministers from across the world will attend to review the functioning of the multilateral trading system and to take action on the future work of the WTO. The Conference will be chaired by H.E. Dr Thani bin Ahmed Al Zeyoudi, UAE’s Minister of State for Foreign Trade.

1 March
Pour one out for global trade
This week, world leaders hammered another nail in the coffin of global free trade — perhaps the final one for its central institution, the World Trade Organization.
(Politico) At the annual ministerial meeting of the WTO this week, world nations failed to reach agreement on any of the major commercial irritants that have put the very existence of the global trading body at risk. From global overfishing to farm subsidies and the structure of the WTO itself, world nations will walk away from Abu Dhabi with little to show for their days — and many sleepless nights — of negotiations.
World leaders did manage to ward off an unexpected total catastrophe, agreeing at the 11th hour to continue prohibiting tariffs on digital transactions, thereby avoiding new fees on countless online business dealings. But the failure to move any new free trade initiatives forward in the face of rising right-wing populism around the world is being regarded as a major blow to the global trading system set up after the (first) Cold War.
… Stagnation is exactly the outcome that supporters of the global trade body feared. On Wednesday, as negotiators struggled to keep the WTO from slipping into irrelevancy, Director General Ngozi Okonjo-Iweala warned the very legitimacy of the rules-based world trading system is at risk.
“The biggest issue at stake is the system itself,” she warned in a speech to business officials.
“We are at an inflection point. Will we continue to have a reasonably open, integrated and global economy, or will we move toward an increasingly fragmented and divided one?”
The answer — at least for now — appears to be the latter.

27 February
Allies have gone missing in Red Sea stand-off
France and others are failing to pull their weight despite Houthi attacks crippling global trade
Roger Boyes
(The Times) It is a mark of the times that the bombardment of a critical world trading route is seen as a third-order problem. Yes, the United States and Britain are striking at the Iranian-backed Houthi rebels to stop the harassment of merchant vessels in the Red Sea but there is an astonishing lack of urgency among other mercantile nations to help them.
No one, it seems, has the appetite to join a western police force even when its mission — to secure the uninterrupted and safe passage of goods around the globe — is morally justifiable. The reluctance is down to two broad factors. The first is that US authority to lead is slipping away as the presidential election approaches. The second is that an armed western naval presence in contested waters might turn deterrence into a driver of escalation.
The key to the (still limited) success of the Houthis is the role of Iranian spy vessels in identifying likely targets. Sink one of them and the West could be at war with a near-nuclear Iran. Or if the Houthis shoot down, by accident or by design, a western rocket, they will celebrate it as a victory.
The biggest loser in the region is Egypt, which is forfeiting almost half of its hard currency revenue from transit through the Suez Canal — and, of course, Yemen. Ships are avoiding Yemen’s main Red Sea port, Hodeidah. Result: higher food prices in what is already the poorest country in the region.
… America had hopes that China could be roped in to exert influence over Iran to rein in the Houthis. Beijing is the largest purchaser of Iranian oil, nearly 1.5 million barrels a day, which gives it leverage. And it needs safe passage through the Red Sea for trade with Europe. But what happened instead is that the Houthis were instructed not to fire at Chinese vessels. Everyone else is still being treated like ducks in a fairground shooting gallery.
Even Saudi Arabia, which once led its own bombing war against the Houthis, is reluctant to be part of the Red Sea force. Crown Prince Mohammed bin Salman has been desperate to end Riyadh’s separate conflict with the Houthis and is worried that his own road map for a diplomatic settlement will be jeopardised by American military action.
But the chief problem is European reluctance to sail into choppy waters.

25-26 February
Global economy is weighed down by war, uncertainty and instability, trade chief warns
(AP) — The head of the World Trade Organization warned on Monday that war, uncertainty and instability are weighing down the global economy and urged the bloc to embrace reform as elections across nearly half the world’s population could bring new challenges.
WTO Director-General Ngozi Okonjo-Iweala sought to offer some praise for her organization as it held its binneial meeting in the United Arab Emirates, even as it faces pressure from the United States and other nations.
But she was blunt about the risks ahead, as higher prices for food, energy and other essentials sting people’s pockets, “fueling political frustration.”
WTO in ‘damage control’ mode as Abu Dhabi agenda unravels
(Politico) The failure of WTO member countries to produce anything meaningful at the group’s 13th Ministerial Conference could further erode the Geneva-based organization’s ability to create new global trade rules.
The future of world trade is about to face a turning point: whether nationalist policies displace an eight-decade shift toward rules-based global commerce.
This week’s biennial World Trade Organization conference in the United Arab Emirates will see its 164 member countries try to reach deals on the fate of the world’s fish stocks, the future of digital trade and how countries can safeguard their food security.
WTO aims for modest outcomes at Abu Dhabi meeting
By Emma Farge and Rachna Uppal
‘Tough’ politics complicate deal-making: WTO chief
160 ministers due to meet from Feb. 26-29
Few deals possible at WTO biennial meeting
(Reuters) – Trade ministers from nearly every country in the world gather in Abu Dhabi on Monday [26 February] for a World Trade Organization meeting that aims to set new global commerce rules, but even its ambitious chief Ngozi Okonjo-Iweala has sought to curb expectations.
The almost 30-year-old global watchdog, whose rules underpin 75% of global commerce, tries to strike deals by consensus, but such efforts are becoming more and more difficult as signs grow that the global economy is fragmenting into separate blocs.
“We are not in dreamland here. International cooperation is in bad shape. Real success would be fish, plus two or three things,” one trade delegate told Reuters.
Other outcomes from the four-day meeting that are either definite or achievable are the accession of two new members – Comoros and East Timor – and a deal among some 120 countries to remove development-hampering investment barriers.
Tougher areas are extending a 25-year moratorium on applying tariffs on digital trade, which South Africa and India oppose, and an agreement on agriculture trade rules that has eluded negotiators for decades.

24 February
How Red Sea Crisis Raises, Inflation, Supply Chain Worries Anew
(Bloomberg) By attacking ships plying the Red Sea, Yemen’s Iran-backed Houthi rebels have caused the biggest disruption to global trade since the Covid-19 pandemic and provoked a military response, including US and UK airstrikes on Yemen. The Houthis say they are acting in solidarity with Palestinians amid the war between Israel and the militant group Hamas. The dangers in the Red Sea have increased costs for operators still plying its waters and prompted shipping companies to reroute much of the sea’s normal container, oil and natural gas traffic around the southern tip of Africa, a lengthier and more expensive journey. That’s raised concerns that the crisis will feed inflation and resurrect supply-chain snarls.

23 February
China is mostly quiet on Houthi attacks in the Red Sea
(NPR) For months, Iran-backed Houthis have been attacking commercial ships in the Red Sea, threatening global supply chains, forcing vessels to reroute and driving up costs. The militia in Yemen says it’s targeting ships with links to Israel in response to the country’s invasion of the Gaza Strip, yet many of the targets have no connection to Israel.
The U.S. has mounted a coalition of more than 20 countries to help secure the Red Sea, which has taken action including retaliatory strikes against the Houthis and shooting down the militia’s drones and missiles.
Noticeably absent from the coalition is China — even though it depends on the waterway to safely ship goods to Europe.

22 February
American economic statecraft in the Asian century
(Brookings) There has been a profound transformation in U.S. foreign economic policy. The United States built a deep economic relationship with China and used to champion the negotiation of comprehensive free trade agreements. The current situation, however, is very different. China and the United States had a trade war and are rivals on technology, and the United States has become skeptical of free trade agreements. The notion that economic security is national security has become pervasive in U.S. foreign economic policy and the policies of many East Asian economies.
What are the most important drivers, both internally and externally, for this change?
Economic statecraft figures centrally in the U.S. quest to secure its prosperity and security by leading on technological innovation, developing human capital, and promoting an advanced manufacturing base. It also guides U.S. foreign policy priorities of competing strategically and responsibly with China, harnessing cooperation with leading tech democracies, and advancing new economic security tools.
In this new era, Asia is a focal point for U.S. endeavors. It is the region where the U.S. peer competitor—China—has risen, where the majority of the global middle-class lives, and where key U.S. allies and partners, which play outsized roles in critical supply chains, sit on regional hotspots where tensions continue to rise.

21 February
Red Sea crisis sees China’s brisk business in Africa waver under high shipping costs amid Houthi attacks
China has particular exposure to Africa, with investments reaching rising by 4.4 per cent to US$1.8 billion in the first half of 2023
(SCMP) Avoiding attacks in the Red Sea has raised the cost of business for Chinese firms in East Africa, which borders the embattled waterway, and shaken the production of companies that cannot afford the more costly alternative transport options, analysts said.
Chinese traders are gingerly eyeing the use of circuitous air, land and sea routes for safety, hiring risk-tolerant so-called feeder shipping lines or producing less until the attacks by Houthi militants stop.
“Chinese companies with a substantial presence in African markets are facing heightened uncertainties and complexities as they navigate these disruptions, prompting a re-evaluation of their shipping strategies and contingency plans to mitigate the impact on their operations,” said Gary Lau, chairman of the Hong Kong Association of Freight Forwarding and Logistics.

14 February
Twice-Attacked Commodity Shipper to Stop Using the Red Sea
By Alex Longley
(Bloomberg) Commodity shipping company Star Bulk Carriers Corp. will no longer sail through the Red Sea after attacks on two of its ships by Yemen’s Houthi rebels since last week.
The company said it was targeted because it’s listed in the US and that it was unable to divert the two vessels that came under fire — despite a heightened threat to ships with US links — for legal reasons. Earlier this week, Yemen’s Houthi militants said they hit the Star Iris, after last week targeting Star Nasia, both of which are owned by Star Bulk.

24 January
China says it’s working to de-escalate tensions in the Red Sea that have upended global trade
(AP) — China, the world’s biggest exporter, says it is deeply concerned about tensions in the Red Sea that have upended global trade by forcing many shippers to avoid the Suez Canal.
Some of the world’s largest container shipping companies and oil giant BP have been sending vessels on longer journeys around Africa that bypass the Red Sea. In response to the growing impact on global trade, the United States and a host of other nations have created a new force to protect ships.
At least 90% of the container ships that had been going through the Suez Canal are now rerouting around Africa and the Cape of Good Hope, according to Drewry, a maritime research consultancy.
The cost to ship a standard 40-foot container from China to northern Europe has jumped from $1,500 to $4,000, according to the Kiel Institute for the World Economy in Germany. But that is still far from the $14,000 seen during the pandemic.

20-24 January
How Red Sea Crisis Raises, Inflation, Supply Chain Worries Anew
(Bloomberg) By attacking ships plying the Red Sea, Yemen’s Iran-backed Houthi rebels have caused the biggest disruption to global trade since the Covid-19 pandemic and provoked a military response, including US and UK airstrikes on Yemen. The Houthis say they are acting in solidarity with Palestinians amid the war between Israel and the militant group Hamas. The dangers in the Red Sea have increased costs for operators still plying its waters and prompted shipping companies to reroute much of the sea’s normal container, oil and natural gas traffic around the southern tip of Africa, a lengthier and more expensive journey. That’s raised concerns that the crisis will feed inflation and resurrect supply-chain snarls.
World faces second wave of disruptions from Red Sea crisis, warns shipping giant (subscription)
Interview: Cameron Bowie, of shipping giant Hapag-Lloyd, warns of second wave of disruption
Red Sea crisis: What it takes to reroute the world’s biggest cargo ships
(BBC) An estimated 12% of global trade passes through the Red Sea every year, worth more than $1tn (£790bn). But many shipping firms have begun avoiding the area altogether. Hundreds of giant container ships, some of them more than 300m (984ft) long, are now choosing a lengthy detour around the continent of Africa instead of heading up the Red Sea and through the Suez Canal on voyages from Asia to Europe. But rerouting such large vessels is no easy task – the logistics involved can be enormous and time consuming.
How Houthi Attacks Have Upended Global Shipping
By Agnes Chang, Pablo Robles and Keith Bradsher
It is an extraordinary detour: Hundreds of ships are avoiding the Suez Canal and sailing an extra 4,000 miles around Africa, burning fuel, inflating costs and adding 10 days of travel or more in each direction.
(NYT) They are avoiding one of the world’s most important shipping routes, the Red Sea, where for months the Iranian-backed Houthi militia has attacked ships with drones and missiles from positions in Yemen.
The Houthis have said they are seeking to disrupt shipping links with Israel to force Israel to end its military campaign in Gaza. But ships connected to more than a dozen countries have been targeted, and a Houthi spokesman said this week that they consider “all American and British ships” to be enemy targets.
The turmoil has been sweeping. About 150 ships passed through the Suez Canal, which lies at the northwest end of the Red Sea, during the first two weeks of this January. That was down from over 400 at the same time last year, according to Marine Traffic, a maritime data platform.

19 January
[WEF] Annual Meeting 2024: Rebuilding Trust Amid Uncertainty
Economic growth and trade
Participants made the case that a new growth model is needed, one that balances the drivers of growth and productivity with the complexity of innovation, inclusion, sustainability and resilience.
“We must be bold and define a new paradigm of prosperity, a new economic and social orthodoxy that takes advantage of the knowledge and the new tools we have to couple economic growth with environmental sustainability and prosperity for all,” said Pedro Sánchez, Prime Minister of Spain.
“We need to think of globalization not in the way it was done before, but differently. And we need to make sure that those who did not benefit during the first round benefit this time,” said Ngozi Okonjo-Iweala, Director-General of the World Trade Organization.
“As we build our economic policies, the question we have to ask is: ‘Will this make the life of the people I represent better?’” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance of Canada.
“The big issues are how do we address the climate transition? How do we address the needs of ageing societies and broken social security systems? And how do we address the challenges of the AI era and ensure that populations can cope with it and benefit from it?” said Tharman Shanmugaratnam, President of Singapore, on the most pressing challenges for economic policy. …

9 January
China’s Digital Silk Road (DSR) In Southeast Asia: Progress And Challenges – Analysis
By Wang Zheng
(Eurasia Review) This year marks the 10th anniversary of the launch of China’s Belt and Road Initiative (BRI). Proposed by President Xi Jinping in 2013, the BRI has become China’s flagship foreign policy to realise the Chinese vision of a “global community of shared future.”[1] At the third BRI Forum in Beijing in October 2023, President Xi announced that China has signed BRI-related memoranda with over 150 countries and 30 international organisations and established more than 20 multilateral platforms to facilitate the development of the BRI projects worldwide.[2] The BRI’s coverage has also expanded from traditional physical infrastructure to health, clean energy, digital economy, and people-to-people exchanges.[3]
Among the BRI’s new development trends, the Digital Silk Road (DSR) has become a key pillar of the initiative, especially against the backdrop of the intensifying U.S.-China technological rivalry.

3 January
What is the Red Sea crisis, and what does it mean for global trade?
Attacks by Houthi rebels along the trade route have led to firms pausing shipments, raising the possibility of a shock to the world economy
(The Guardian) The world’s largest shipping firms are continuing to pause shipments through the Red Sea after attacks by Houthi rebels along the crucial international trade route.
As container ships are diverted around the Cape of Good Hope on the southern tip of Africa, adding thousands of miles to journeys, the disruption is driving up the cost of shipments from Asia to Europe, raising the prospect of a renewed inflation shock for the world economy.
US and allies warn Houthis of ‘consequences’ as Red Sea crisis intensifies
Statement calls for ‘collective action’ amid spate of attacks in crucial trade route.
(Politico Eu) The joint missive — issued simultaneously by the governments of the U.S. Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, the Netherlands, New Zealand, and the United Kingdom — stops short of spelling out how the allies plan to quell mounting turmoil in the Red Sea region.
But it warns that recent events pose “a direct threat” to global trade and constitute “a significant international problem that demands collective action.”
Sailors navigating the narrow Bab-el-Mandeb Strait — on a vital shipping route linking Europe to Asia — have in recent weeks faced drone strikes, missile attacks and hijackings by Iran-backed Houthi militants.

2023

19-20 December
5 must-read stories about global trade from 2023
2023 has been an uncertain year for global trade.
Geopolitical tensions, rising costs and climate change disruptions have each negatively impacted global supply chains.

(WEF) Some of the most-read trade stories from this year that featured on Agenda….

More than 100 container ships rerouted from Suez canal to avoid Houthi attacks
Cape of Good Hope diversion adds 6,000 nautical miles and three or four weeks to delivery times and has driven up oil prices
US announces naval coalition to defend Red Sea shipping from Houthi attacks
(The Guardian) Egypt and Saudi Arabia notably absent from Operation Prosperity Guardian as more shipping companies forgo route
Yemen’s Houthis, who are aligned with Iran, have been eager to show support for Hamas in Gaza, and began by trying to mount long-range missile attacks into Israel. But these were largely intercepted by Saudi Arabia and the US and had no impact.
Tactics switched dramatically a month ago, when the Houthi fighters dramatically seized the Galaxy Leader, a British-owned and Japanese-operated cargo ship, in a helicopter raid captured on video. It remains in the Yemeni port of Hodeidah.
But while the Houthis initially said they were seeking to target Israeli shipping, they have stepped up their attacks on a wide variety of merchant tankers heading through and towards the 18-mile-wide Bab el-Mandeb strait.
Ian Bremmer: What are the global ramifications of Red Sea shipping disruptions?
This is a lot of ships (sic) that are carrying a lot of goods that can’t go through the Red Sea because the Houthis are hitting them. And so instead they’re going around the Cape of Good Hope, which is South Africa. It’s a lot longer and it’s more expensive. You know, it’s not really an impact on the markets in the sense that the goods are still getting through. So it’s not like you’re not getting your oil, you’re not getting your commodities. It is going to hurt the Egyptian economy significantly because they’re not getting that transit and the fees. It would benefit South Africa, but their ports are a huge mess. So, I mean, funnily enough, it’s probably a benefit for like Namibia and Mozambique and we’ll see for how long It lasts.

14 November
The Arctic Institute China Series 2023
The Polar Silk Road (PSR) was added in 2017 to China’s mega-scale connectivity project, the Belt and Road Initiative (BRI), first announced in 2013.3) BRI is characterized by infrastructure investment along a constellation of economic corridors, including the Northern Sea Route. The announcement of the PSR created a lot of interest in the potential for resource extraction and sea transport in the Arctic region, as noted in Chinese academic and journalistic reports and articles, sometimes even dubbed the “Golden Waterway” (黄金水道) in Chinese media. However, it is unclear how significant the PSR is in China’s overall Arctic strategy and foreign policy.
China’s Polar Silk Road: Long Game or Failed Strategy?
By Erdem Lamazhapov, Iselin Stensdal and Gørild Heggelund

12 September
WTO in Survival Mode Pushes Back on Splintering Global Trade
Trade tensions between US and China are affecting trade flows
WTO chief urges greater cooperation and economic integration
Key Things to Watch at the WTO Public Forum This Week
(Bloomberg) Trade luminaries from around the globe will descend on Geneva this week for the World Trade Organization’s Public Forum — an annual event that brings businesses, government officials and public-interest groups together to discuss the most pressing issues facing the global trading system.
This year, the theme is focused on the environment and how international trade can be used to support the use of clean energy and technologies to reduce the impact of climate change. Here’s a WTO-produced video to whet your appetite.
Trade and environment is a critical topic to consider as US and European policymakers pursue unilateral trade tools, like green subsidies in the US Inflation Reduction Act, and carbon taxes, like the EU’s carbon border adjustment mechanism, which levies an equivalent price on carbon-intensive goods produced outside the bloc.
8-12 September
Green trade will be the focus of this year’s World Trade Organization Public Forum.
Here’s everything you need to know

(WEF) Trade tensions between US and China are affecting trade flows
WTO chief urges greater cooperation and economic integration
Fragmentation of the global economy into separate blocs would be “extremely costly” and make the world a less stable place, the World Trade Organization said in a report published Tuesday.
The report, which notes that geopolitical tensions among major economies are beginning to affect trade flows, offers a counter argument to the ascendant view that the last quarter century of global economic integration was a mistake.
“The WTO is not perfect — far from it,” wrote WTO Director-General Ngozi Okonjo-Iweala. “But the case for strengthening the trading system is far stronger than the case for walking away from it.”
“The alternative to rules-based integration is power-based fragmentation and a world of greater uncertainty, increased socioeconomic exclusion and heightened environmental decline,” she sa
The WTO report found that national-security concerns are “playing a rapidly increasing role in trade policy” and illustrated how trade openness, historically has helped foster stability in international relations.
4 September
Climate change is one of the most critical issues of our time, and trade has a key role in deciding the future of the planet. At the WTO, we have always been committed to engaging with all stakeholders and facilitating dialogue. We are looking forward to welcoming you to the Public Forum from 12 to 15 September.
Every voice must be heard. It is time for action! (video)

6 March
The Rise of China as A Global Economic Superpower and Its Impact on International Trade
(Modern Diplomacy) As China continues to experience remarkable economic growth, its impact on international trade has become increasingly significant. China’s population of over 1.4 billion people, its vast industrial capabilities, and its technological advancements have made it a formidable player in the global economic system. The implications of China’s rise are complex and far-reaching, with both positive and negative effects on international trade.

2022

Year in Review 2022: Africa
The African Continental Free Trade Area (AfCFTA) agreement seeks to revive intra-continental trade, with coffee beans from Rwanda and tea leaves and vehicle batteries from Kenya making their way to Ghana in early December as part of the Guided Trade Initiative pilot programme.
Some 44 of the 54 signatories have ratified the agreement, which is set to create the largest free trade area in the world in terms of number of participating countries.

Leave a Comment

comm comm comm