[240513.EN.SEA] Boxes or WTO ? Study Shows Boxes Were Biggest Trade Contributor

CONTRIBUTING to the settlement of an arcane, academic dispute over whether containers or the World Trade Organisation (WTO) was the greatest contributor to trade comes a paper from university researchers, who claim the boxes were far more influential.

"Between 1966 and 1983 the share of countries with container ports rose from one per cent to nearly 90 per cent, coinciding with a take-off in global trade," reported London's Economist newspaper, citing the paper, "Estimating the Effects of the Container Revolution on World Trade".

"In 22 industrialised countries containerisation explained a 320 per cent rise in bilateral trade over the first five years after adoption and 790 per cent over 20 years," said the Economist report of the paper by Zouheir El-Sahli of Sweden's Lund University, and Daniel Bernhofen and Richard Kneller of the University of Nottingham.

What container pioneer Malcom McLean discovered in 1956, that containerisation cost $0.16 per loaded containerised ton against $5.83 per breakbulk ton, was a ratio that tracks to the present day, bringing plummeting shipping costs, magnified later by rocketing scale of production scale that reduced unit costs further.

"By comparison, a bilateral free trade agreement raises trade by 45 per cent over 20 years and GATT [General Agreement on Trade and Tariffs, the forerunner of the WTO) adds 285 per cent," said the Economist report.

Customs clearance now stands as the biggest barrier. "When governments meet at the WTO's December conference in Bali, they should make a special effort to boost efficiency at customs through regulatory harmonisation and better infrastructure. A 50 per cent improvement could mean benefits as big as the elimination of all remaining tariffs," the report said.

Source : SN-TR.