The melting of the Arctic ice cap means that the northern sea route between Northeast Asia and Northwest Europe is commercially viable. It reduces the shipping route by a third, compared to the southern sea route currently used. The port of Rotterdam should (be able to) benefit from this, according to the Netherlands Bureau for Economic Policy Analysis (CPB).
The CPB is studying the effects of the economic shock associated with the opening of the northern sea route. In the study “Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route”, the CPB outlines such effects as a substantial shift in the bilateral trade flows between Asia and Europe, movement of trade within Europe, heavy shipping traffic passing the North Pole and a considerable decline in traffic through the Suez Canal.
These changes in the global trade flows have consequences for the real income and prosperity of the countries involved. The anticipated diversion of trade also has important geopolitical implications. It will lead to the reorganisation of the global value chains within Europe and between Europe and Asia. Political interest in and environmental pressure on the North Pole will also increase.
For the Netherlands, the opening of the northern sea route is of particular importance, considering the strategic location occupied by the port of Rotterdam. Its trade volumes with countries in Northeast Asia are expected to increase significantly and it could possibly serve as a hub for new, global value chains.
The study can be downloaded here.
Source: CPB, May 2015