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.
Highlights
The issues of sustainability in maritime transport and logistics services have been considered in terms of environment, economy, and society
This study aims to estimate the impact of global protectionism on global shipping and logistics, in order to examine whether the industry will be sustainable or not
This paper focuses on the impact of protectionism on the global logistics industry including fundamental changes in the international trade environment that are not currently drawing enough attention
Summary
The issues of sustainability in maritime transport and logistics services have been considered in terms of environment, economy, and society. While there are many concerns about the ongoing US–China trade conflict and the proliferation of global protectionism, in-depth research is lacking. The Supreme Court was closed on 11 December 2019, and this caused the WTO to face an existential crisis. The US’ WTO paralysis is directly related to trade sanctions against China
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