Melting ice caps: implications for Asian trade with North America and Europe

• Published in: International Journal of Trade and Global Markets
• Main Authors: Francois, Joseph, Countryman, Amanda, Rojas-Romagosa, Hugo
• Format: Article in Journal/Newspaper
• Language: English
• Published: Inderscience 2016
• Subjects: 330 Economics; Arctic; Northern Sea Route
• Online Access: https://boris.unibe.ch/91751/; http://www.inderscience.com/info/inarticle.php?artid=81148

Arctic ice caps have been melting at an increased pace and projections imply that the extent of the ice cover will be greatly reduced in the near future. Such a climatic phenomenon has important socio-economic implications, as it would open up shipping routes in the Arctic. In this regard, media attention and research has largely centered on the use of the Northern Sea Route (NSR) connecting Northeast Asia with Northwestern Europe and its effect on traffic through the Suez Canal. However, melting Arctic ice caps would also make the North West Route (NWR) a feasible trade route for high volume commercial traffic, reducing the shipping distances between Northeast Asia and the East Coast of the United States. In this paper we analyze the commercial feasibility of the NWR and the economic impact of reducing the trade distances between Asia and the United States East Coast. In particular, we examine the extent to which the NWR would compete with the Panama Canal for certain trade routes. Such competition has significant geopolitical implications linked to both a drop in traffic through the Panama Canal as well as changes in the global supply chains that currently link East Asia and the United States.