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The Impact of Global Protectionism on Port Logistics Demand

Jungran Cho (), Emma Kyoungseo Hong (), Jeongho Yoo () and Inkyo Cheong ()
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Jungran Cho: Program in FTA Policy and Business Consulting, Graduate School, Inha University, Incheon 22212, Korea
Emma Kyoungseo Hong: Program in International Relations, Department of Political Science, Graduate School, New York University, New York, NY 10016, USA
Jeongho Yoo: Trade, Investment and Innovation Division, UN ESCAP, Bangkok 10200, Thailand
Inkyo Cheong: Department of International Trade, Inha University, Incheon 22212, Korea

Sustainability, 2020, vol. 12, issue 4, 1-17

Abstract: Various risks and uncertainties are strengthening the downside of the global economy. This paper aims to estimate the impact of the US–China conflict and the World Trade Organization (WTO) Appellate Body’s shutdown on global logistics demand and to show the seriousness of the situation. Existing literature studies on protectionism or the US–China trade conflict were considered, with a focus on the effects of specific issues or impact on bilateral relations. No research has quantitatively considered the adverse effects of the Appellate Body’s shutdown. In this situation, questions can be raised whether the current global shipping logistics system can be sustainable or not. This paper attempts to estimate the shrinking demand for shipping logistics due to global protectionism. Using a dynamic general equilibrium model and trade-cargo-container conversion methodology, which differentiates this paper from previous studies, the paper suggests that the combination of tariffs and NTBs can severely reduce international trade and the demand for maritime logistics services. Depending on the scenario, port cargo is expected to decrease by 3.95 to 6.9 trillion tons, which can be half of the global cargo. Based on these estimates, this paper suggests that a catastrophe could occur in global trade order as well as global maritime logistics. Finally, underlining that the international trade order should not be severely damaged, this paper proposes that countries around the world should seriously discuss this issue at the 12th WTO Trade Ministers’ Meeting in Kazakhstan in June 2020.

Keywords: US-China trade conflict; Port Cargo; WTO Appellate Body; NTBs (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2020
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