Impact of Trade Blocs on Maritime Transport.

Running head: IMPACT OF TRADE BLOCS ON MARITIME TRANSPORT
Impact of Trade Blocs on Maritime Transport
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IMPACT OF TRADE BLOCS ON MARITIME TRANSPORT
Introduction
Trade blocs refer to agreements between different countries within a geographical region
to protect their economies from the imports from the non-member countries. In other words,
trade blocs are formed to reduce or remove the trade barriers or tariffs between groups of nations
to promote the economic growth and development in particular geographical regions ().
Examples of powerful trade blocs are NAFTA, ASEAN, and European Economic Area (EEA)
etc. These trade blocs have contributed significantly in the economic growth of the member
countries, which is reflected in the different sectors of those nations. This paper presents an
overview of the impact of ASEAN and NAFTA trade blocs on the maritime transport of the
member countries and the outcomes on the shipping routes.
Impact of ASEAN on maritime transport
ASEAN stands for the Association of Southeast Asian Nations. It was formed in 1967
with the purpose of promoting the regional growth and stability among the member nations and
the 10 member nations are Malaysia, Indonesia, Singapore, Laos, Thailand, Brunei, Vietnam,
Cambodia, Myanmar and Philippines (Wood 2017). ASEAN Economic Community (AEC) was
established in 2015 for improving economic activities such as free flow of products and services,
skilled labor, and investments. Maritime transport is one such economic activity that is highly
important for exports and imports of goods as well as transport of passengers. According to
World Bank, around 90% of the world’s shipping occurs through maritime transport (Lai et al.
2019). The importance for maritime shipping is very high due its efficiency of carrying large
shipments quite conveniently and in a cost saving manner compared to air transport.

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IMPACT OF TRADE BLOCS ON MARITIME TRANSPORT
In the past decade, the real GDP of ASEAN countries has shown a growth rate parallel to
the world’s real GDP growth rate. It has also been observed that the merchandised trade of
ASEAN countries have increased massively since late 1990s, which depict the era of trade
liberalization, globalization, technological progress, and increasing global demand for goods and
services, and these factors have contributed in the growth of maritime transport (asean.org 2020).
Figure 1: Real GDP growth rate of ASEAN vs. world
(Source: asean.org 2020)
Figure 2: Growth of merchandise trade of ASEAN