The Trans-Pacific Partnership agreement is definitely on my watch list for 2016. With global trade growth in decline, positive effects of the TTP in the next 12 months would be welcome. A positive conclusion to its Atlantic sister, the Trans-Atlantic Trade and Investment Partnership agreement, would also be well timed from a global trade perspective.
About 30 percent of world consumption comes out of the United States, the world’s largest consumer market by far. The TTP will help Asian manufacturing exporters in this marketplace by removing 98 percent of remaining tariffs on trade in goods among members. In addition, the Japanese are in trade negotiations with the EU. If successful, these talks coupled with TTP can significantly affect Japanese GDP growth in a positive way.
Looking back, car carriers like us enabled the Japanese economic miracle. In terms of automobile exports, Japan-U.S. trade will remain the largest in the next couple of years, but the global share is already reduced significantly. In 1990, five countries contributed to 80 percent of the world automobile production with Japan on top. By 2020, automobile manufacturing will be increasingly fragmented with 10 countries contributing to the same 80 percent.
The days of linear and predictable roll-on, roll-off markets markets are gone. Rather, the new normal is evolving trade patterns with more port calls and increased complexity. The dynamics we now face, with fragmented production, distribution and sales, are driving many evolutions — big and small. Global operators are endeavoring to build efficient networks and exploring ways to re-engineer trade patterns to transport more cargo on fewer ships while burning less fuel.
Christopher J. Connor, President and CEO, Wallenius Wilhelmsen Logistics