Presented to the 6th National Marine Conference, Vancouver, October 23-25, 1990
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1 Presented to the 6th National Marine Conference, Vancouver, October 23-25, 1990 Gunnar K. Sletmo is Omer DeSerres Professor of Commerce at Ecole des Hautes Etudes Commerciales, Montreal and Susanne Holste Research Associate. The present paper is an abridged, updated version of «The Shipping and Trade of Pacific Asia - Trends and Implications for Canada», 84 pages. Submitted to Transport Canada, March Asia Pacific: A New Frontier for Canada's Shipping and Trade by Gunnar K. Sletmo and Susanne Holste Cahier n o R Cahier de recherche Octobre 1990 ISSN :
2 Executive Summary 1. Asia Pacific, for the purposes of this paper, is made up of twelve nations with a total population of 1.6 billion, of which 1.1 billion in China. Per capita income ranges from U.S. $23,000 in Japan to U.S. $355 in China (see Table 1, p. 2 and Map 1, p.4). 2. The region includes some of the most dynamic economies in the world, and has been described by FORTUNE as a fantastic opportunity (p.5). 3. Asia is the second largest continental region among Canada's customers and Japan is Canada's second largest trade partner (p. 6). 4. The foreign trade of the twelve Asia Pacific nations exceeds that of the United States and Canada (Table 4, p. 10) and transpacific trade is significantly larger than both transatlantic and europacific trades (p. 10). The world's trade system has become a large triangle with Asia's Pacific Rim as its base. 5. Increasing trade volume and greater use of containers are giving rise to distribution and logistics systems built on the hub-and-spoke model, raising questions about the future place of Canadian ports in North America's total foreign trade (p. 11). 6. Although Asia Pacific in general and ASEAN in particular have not given rise to a trading block as such (pp ), there is an increasing trend towards intra-regional trade (p. 16). 7. Seven countries in Asia Pacific are maritime powers and collectively represent more than one-fifth of world tonnage (p. 13). These fleets continue to expand and will become even more important in the future (pp ). 8. Asia Pacific represents a high concentration of container traffic and in 1988 more than a third of maritime container movements in the world took place in the ports of these countries (Table 7, p. 20). 9. Maritime policies in Asia Pacific vary greatly from one country to another. The greatest concerns relate to Chinese tendencies towards bilateralism (Table 9, pp ). 10. Questions of liner conferences and market regulation remain a concern (pp ). 11. The scope of Canadian participation in Asia Pacific markets is great for trade in general. In the area of shipping services it is negligible for traditional shipping services under Canadian flag. Prospects are far more promising in the area of logistics and transportation systems (p. 28). Market opportunities include the development and construction of infrastructure and supply of equipment. i
3 Table of contents EXECUTIVE SUMMARY... i INTRODUCTION TO ASIA PACIFIC Canada's Trade Horizon... 1 Asia Pacific as a Region... 1 THE IMPORTANCE OF ASIA PACIFIC TO CANADA Threat or Opportunity?... 5 Canada's Traditional Trade Ties... 5 Canada's Trade with Asia Pacific... 7 TWELVE ASIA PACIFIC NATIONS AND THEIR TRADE Trade Patterns... 9 ASEAN - A Trading Block? Commodity Structure of Asia Pacific Exports ASIA PACIFIC SHIPPING Seven Maritime Powers Container Developments The Future of Shipping in Asia Pacific ASIA PACIFIC PORTS AND TRANSPORT Trade Surplus and Cargo Deficits Asia Pacific's Container Traffic MARITIME POLICIES IN ASIA PACIFIC Maritime Policies and Barriers to Entry Markets vs States Stabilization Agreements CHALLENGE FOR CANADA Shifting Center of Gravity Scope for Canadian Participation Conclusions ENDNOTES ii
4 List of Tables 1 Key Indicators for Asia Pacific Economies Geographical Structure of Canadian Trade, Canada's Trade with Selected Pacific Asia Countries, Asia Pacific Trade Figures Asia Pacific Fleets, Changes in Selected Fleets, , Container Use in Asia Pacific and North America, Top Ten Asia Pacific Container Ports, Protectionist Measures in Shipping, Asia Pacific, List of Map 1 Asia Pacific: 12 Leading Economies... 4 iii
5 iv
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