Trade and consequences: the globalization of trade is having some unexpected--and unwelcome--effects.

Author:Mintzer, Irving
 
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Walk into any Wal-Mart, Target, or Sears store in the United States, pick out a selection of goods from the shelves, and look at the manufacturer's label. The portable DVD player for your teenage daughter costs less than $100 and is made in Singapore. The silk-screen T-shirt with the cartoon characters for your 7-year old son is less than $15 and labeled "Made in the Philippines." The new wrenches for your garage toolkit cost half of their American counterparts; they're made in China, as is the new microwave for your home office. The sleek LCD monitor for your family's computer comes from Korea. In fact, chances are that more than 75 percent of the small manufactured goods in your shopping cart were made in Asia and hauled by container ship across the Pacific.

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It is not news that U.S. stores sell many imported products. The United States has always been a trading nation and its role in international trade has grown steadily during the last several decades. But it has been 30 years since the United States exported more than it imported. In 2004, when U.S. international trade totaled $2.9 trillion, imports exceeded exports by more than $620 billion.

The largest contributors to the U.S. trade deficit are imported oil and manufactured goods. Although oil represents the largest dollar fraction of U.S. foreign trade, the growing flood of imported manufactured goods is having equally profound effects. As the United States shifted from a manufacturing-led to a service-oriented economy, mainland Asian economies filled the gap. Lower Asian labor costs and less stringent environmental regulations translated into lower production costs, more than counter-balancing the expense of international marine freight shipping. (China is now the largest source of manufactured imports in the United States, except for automobiles, and is the second biggest U.S. trading partner.)

These new Asian imports, along with goods arriving from other countries, have resulted in a flood of marine freight that is swamping U.S. ports and overwhelming nearby communities.

Most manufactured imports arrive on container ships, and the resulting growth in marine container freight is creating grave new technological, environmental, economic, and national security challenges. These challenges are especially acute in the United States but have implications for many nations caught up in the economic web of trade.

SEA CHANGES

Containers are rectangular aluminum or steel boxes, typically 6-12 meters in length. Invented in 1956, containers and the ships built to carry them have revolutionized marine freight. It's no exaggeration to say that container ships are taking over the world's general cargo fleet. In 2003 they carried 75 percent of general cargo along a virtual marine highway.

The pressure to reduce marine freight costs is driving technological evolution in the international shipping industry. One response has been to minimize both fuel use and manpower per ton-mile by steadily increasing the carrying capacity of ocean-going container ships. A second approach has been to modernize port management and dockside cargo handling in order to increase cargo throughput and decrease ships' idle "dwell time" in ports.

Container ship capacity has ballooned dramatically in the last 40 years. Ship size is measured by the number of standard containers, called 20-foot equivalent units (TEU), a ship can carry on its decks and in its holds. Third-generation container ships, built in the mid-1980s, carry about 4,000 TEU. These so-called PanaMax ships are the largest freighters that can pass through the Panama Canal. By comparison, fourth- and fifth-generation ships with capacities between 4,200 and 7,600 TEU are too big to use the Panama Canal and must travel other routes. Although the Port of Long Beach can dock ships up to 8,000 TEU, most ships in this class are too large to dock at U.S. ports. Beyond these "MegaShips," several containerized cargo vessels being designed today have capacities approaching 15,000 TEU. When built, they will be the largest cargo ships able to transit the Suez Canal. The Dynamar Consultancy in Rotterdam, the Netherlands, has predicted that ships of 18,000 TEU will be built by 2010. These ships are designed to haul containerized cargo at costs...

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