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What Does Suez Tell Us About Modern Trade

In 1956 the closure of the Suez Canal resulted in international trade being brought to a standstill. The importance of Suez as a link between the Middle East, Africa and Asia meant that the global economy was reliant on vessels being able to pass through freely. In 1956 two thirds of the oil used by Europe passed through the Suez Canal, ensuring that its blockage caused an international crisis.

The 1956 crisis was intentionally brought about by Gamal Abdel Nasser’s Egyptian regime blockading the Canal in protest against the legacy of British and French imperialism. Nevertheless, it is striking that the blockage of the same body of water over 60 years later can once again decimate trade.

The accidental blockage of the Canal in March by the Ever Given container ship caused a queue of over 300 trading vessels, with countless others being forced to reroute their journeys, and an estimated £7 billion of trade being held up each day.

Approximately 12% of global trade still passes through the Suez Canal, and the alternative trade route between Asia and Europe via the Cape of Good Hope can take two weeks longer.

In a world which has become increasingly interconnected, with virtual business meetings taking place every day and the sharing of ideas having never been easier, the Suez episode reminds us of our interdependence. Money and ideas may be able to pass around the globe at the press of a button, but material goods are subject to the same rules they have always been. Without the cooperation of all members of the international community, the system which provides people with what they need is thrown into jeopardy.

Recent weeks have seen mutterings of a possible vaccine war between the UK and the EU, while Britain’s general trade with Europe has suffered a colossal decline since Brexit. Just as the International Monetary Fund rode to the rescue of the crisis-stricken economies in 1956, times of hardship should call for unity rather than protectionism.

It is tempting to interpret the global pandemic as a sign that countries must go into isolation and close their literal and metaphorical borders until the catastrophe has passed. However, the Suez blockage should act as a timely reminder that the removal of a single cog can cause the international system to grind to a halt.

The clearing of the blockage in the Suez Canal should prove to be a useful metaphor for global relations as we move back to normality. The world simply works better when ideas, finances and trade are able to flow easily across borders.

As we approach normality, world leaders should do everything in their power to clear the blockages in productive relations – whether that be in trade, vaccines or ideas. The Suez affair proves that the countries of the world still need each other, and a relaxed international atmosphere benefits everybody.

We need to be clearing obstacles, not putting up new ones.

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