geoeconomy

The Covid-19 pandemic disrupted supply chains and economic activities across the globe. Japan is no exception because of its global supply chain vulnerability, notably its high concentration of production bases in China. This article first explains recent developments in Japanese supply chain policy over the past few years. It argues that Japan’s efforts in securing supply chain resilience have not been successful. It then highlights key challenges faced by the Japanese government in strengthening supply chain resilience.

The globalized economic world order has promulgated a widespread cause and effect impact. As a consequence, the onset of the Ukraine crisis will not only spike oil and gas prices across the world — disrupting energy supply chains —but also have gross ramifications on other critical global value chains ranging from wheat and barley to minerals like copper and nickel.

Cross-border supply chains are one of the main features of a globalized economy. Such global value-chains (GVCs) have emerged and become more and more complex over time, but while they were long perceived unanimously as positive developments, they have been increasingly questioned over the past decade as sources of vulnerability. This has reached a peak with the Covid-related economic crisis. The objective of this contribution is to examine the reasons for these developments as well as the possible response to be given to mitigate the associated costs.

It is hard to imagine anything more central to the world's choke points than the Suez Canal. Albeit relatively recent, built only in 1869, its enviable position - where the Asian, European, and African continents meet - has meant it has quickly climbed the ranks of the hottest bottlenecks. Around 12% of global trade passes through the Suez Canal, accounting for 30% of all global container traffic, and over $1 trillion worth of cargoes annually. In 2020, some 19,000 ships used the route.

It looked like 2020 was going to be a catastrophic year for global trade flows. Actually, despite the heavy impact of Covid-19, the international trade system showed a remarkable degree of resilience. Trade flows shrank by 5% globally, a much better (or less worse) performance than it had been initially expected in view of the substantial paralysis of several global value chains during the first pandemic wave. Nonetheless, Foreign Direct Investments (FDIs) experienced a much more dramatic drop, falling by 40%.

The ocean transport market has been confronted with a worldwide prolonged disruption since August 2020. Consequently, date shippers have been trying to bring order to their procurement and carrier management processes , yet failing to do so, in part because maritime problematics concern both ports and hinterland connections.

The major geopolitical theme of the next decade will be the US-China competition. Donald Trump was able to build a campaign around China because of Beijing’s rise and China's changing view of the US, which shifted from a “model” position to a “declining” role. Indeed, Xi Jinping promoted China’s full modernization by 2049, betting on technological and economic leadership. The competition is built around an economic and strategic pillar strengthened during the pandemic by the idea that economic interdependence might be weaponized.

On April 26, 1956, a converted oil tanker called Ideal-X departed Newark, New Jersey, carrying 58 aluminum containers on its deck. This voyage, which ended in Houston, Texas, received little attention at the time, but it gave birth to an industry that would reshape the world economy. Today, more than 5,300 container ships sail the seas.

With the impact of climate change on Arctic sea ice, several comments have been published to the effect that diminishing sea ice would quickly translate into the development of massive transit routes across the Northwest Passage (NWP) and the Northern Sea Route (NSR).

On March 23, 2021 the 20,000 TEU vessel Ever Given ran aground and wedged itself across the Suez Canal, all traffic through one of the world’s most critical waterways came to a halt. A highly reported race to free the stuck ship began almost immediately as did the recriminations to the cause of the stranding.

Panama’s maritime business is being transformed by the complex interaction between multiple factors.  These include the growing economic and political power of China and US-China competition, the long-term structural impacts of Covid-19 on both the region and global trade, US policies to contain immigration from the Northern Triangle, climate change, the rise of leftist populism in the region, the China-Taiwan competition, technology trends, evolution of regional infrastructure, and the restructuring of the maritime shippin

Covid-19 triggered a significant contraction of international trade flows, disrupting global value chains and putting maritime logistics and transport under severe stress. Moreover, in 2021, accidents including the Ever Given container ship being stuck in the Suez Canal have raised questions around the long-term sustainability of an hyper-globalized trade system that is based on just-in-time mechanisms.