New India-Europe Express service a game-changer, says Hapag-Lloyd
A new container service to link ports in eastern India with the Mediterranean and north ...
Ocean carriers are getting increasingly nervous over trade tensions and state–subsidised competitors, as protectionist policies continue to gain ground across the globe.
Several shipping bodies, including the International Chamber of Shipping (ICS), Asian Shipowners’ Association (ASA) and European Community Shipowners’ Association (ECSA) took to the floor of the WTO this week to express their concerns.
They presented two papers to the WTO, stating they were “fully committed to the preservation and promotion of free trade policies and principles around the world.”
Deputy secretary general of the ICS Simon Bennett said: “It is no coincidence that the massive growth in the global economy and thus the demand for maritime services that has been seen over the past 25 years has followed the WTO’s establishment in 1995.
“Global maritime trade now exceeds 10bn tonnes of cargo a year, but the efficiency of the shipping sector is dependent on a rules-based trading system.
“Recently this success story has been the subject of unwarranted criticism and threat by certain governments, including the United States, undermining the WTO’s role as the regulator of international trade.”
Mr Bennett said for the industry to maintain its strong position, there was a need for both negotiation and adherence to multilateral trade agreements monitored by the WTO.
However, the papers presented by the shipping delegation to WTO indicated that since 2017 there had been a seven-fold increase in import-restrictive trade measures, representing a $588.3bn additional cost to global trade.
Mr Bennett added: “There are no winners when you increase unilateral tariffs, which is why the best place to address disputes is at the WTO.”
Adding to the problems experienced by European carriers is the deepening reach of China into Europe’s port sector, with JOC noting the European Commission’s competition regulator recently raising the issue of state backing for Chinese carrier Cosco Shipping.
The commission’s senior expert in mergers, and case manager for DG competition, Stephan Simon, noted at the Global Liner Shipping conference in Hamburg this week that Cosco’s profit was “basically the same” as the subsidies it had received.
Cosco’s terminal operating division, Cosco Shipping Ports, signed a 35-year lease to operate two container terminals in 2008 before acquiring a 67% stake in Piraeus in 2016, for $420m, to become its primary operator.
“Cosco is one player, but it’s state-owned and part of Belt and Road… from a competition perspective, we are doing our job and there is no need to step in,” Mr Simon said.
“But maybe we need to look at this from a broader point of view, in case it leads to something that we may not want, as there are political connotations we maybe need to consider.”