Optimism in the air
COMMENT: Syria aside, there appears to be a sense of optimism in the air about the prospects of the global economy and the growth of trade despite Trump's “America First” policies and disdain for trade agreements, writes Ben Hackett.
The US decided not to ratify the Transpacific Trade agreement but given that it had not come into force nor was it really focused on trade and had excluded China, the action did not really matter.
What is of greater interest is that Trump appears to have forgotten about that “disastrous” North America Free Trade Agreement. It seems that it is not that bad after all and that the US is not being taken advantage of.
The North Atlantic trade agreement under negotiations with the EU had been going nowhere so no change there either. And most important of all, during discussions with China, there was no mention of tariff walls, currency manipulation or border taxes. It appears that discussions focused on how to increase US exports. Has Trump wimped out? Time will tell.
In the meantime, the global economy is showing signs of maintaining sustained growth, not a high level, but growth nonetheless. Even the Eurozone countries are projected to do better this year.
The Brexit British economy, aided by the currency devaluation at the same time that the world economy is growing, is now being projected to do much better than previously anticipated. Bottom line is that economic forecasts should be taken with a pinch of salt, a lesson that history repeatedly shows us.
The impact on ports should be positive from a volume point of view. The big question is what the impact of three alliances will have with each focusing their services on fewer base ports. Transhipment interchanges will also be reduced to a lesser number of ports.
The pressure on ports will be on how to deal with larger interchanges as the mainline east-west ships increase in size. More co-ordination and planning will be required and to this end there is a serious need to improve information exchange and IT systems through digitisation. Although I fear that not everyone really understands what they need to do to make digitalisation work for them.