Rotterdam, London, Amsterdam, Copenhagen, Calais: all places closely located to each other that fulfill a central role as hubs in specific global trade flows from shipping to finance and internet traffic. What explains the global relevance of this area around the North Sea and what will its prospects be when trade patterns change?
Observations
- Rotterdam’s harbor is by far the largest in Europe and has more than two times the tonnage of Antwerp and more than three times that of Hamburg. Four of the top five harbors in Europe are on the North Sea. The Danish conglomerate Maersk has since 1996 been the biggest container ship operator in the world
- The City of London employs more than 400.000 people, 8.6% of London’s workforce. This is equivalent to half the total population of Amsterdam or Frankfurt and four times Luxembourg’s. It is governed by the City of London Corporation, which has special rights to, for instance, increase its international standing.
- In 1996, the AMS-IX was set up in Amsterdam to exchange Internet traffic between academic organizations. In 2003, it became the Internet exchange with the largest number of connected networks worldwide. Currently, it is trading its number one position with the Deutscher Commercial Internet Exchange. Amsterdam is a dominant player in the global high-frequency trading
- In 1994 the Channel Tunnel was opened connecting Calais with Dover. It is the world’s longest undersea tunnel. Recently, it became the focus point of migrant flows, which impacted the Brexit vote. Calais’ old lace industry has declined due to globalization and its blue-collar workers are turning to Marine Le Pen.
Analysis
The North Sea houses a multiplicity of global hubs: Maritime trade in the Rotterdam harbor, Danish shipping, the AMS-IX internet exchange, and London’s finance. Why is the North Sea so central to global trade flows?
A second trade shift involves the emerging Arctic trade route, which could be a boon for the North Sea region
The North Sea coastline is located in a geographically central position. It is a gateway to continental Europe that, much more than other coastlines, gives inland access through a well-navigable river system. And in contrast to the Mediterranean, Black or East Sea, it cannot be blocked off and therefore gives free access to the water lanes of global trade. This region, where water facilitates trade and fertilizes land, can sustain large populations. It is the most densely populated area in Europe.
Much of the central role of the region derives from ‘early-mover advantages’. Denmark was quick in the middle of the 20th century to jump into the global container business. Amsterdam in the 1990s used its location to become a hub for internet traffic. This internet infrastructure in turn gave it an advantage in a field like high-frequency trading.
The central role in global trade is mainly rooted in old historical trading patterns. London’s role in finance dates back to its global empire. The ports of Amsterdam and Rotterdam have been important since the 17th century. In the Middle Ages, the North Sea was called the Frisian Sea after their trading empire. The Hanse trade linked Dutch, German, Scandinavian and Baltic cities. The Vikings were an early example of Scandinavian maritime prowess.
But how is this region positioned for future trade flows? Whereas in the 1990s the Channel Tunnel symbolized England’s connection with the continent, Brexit and French protectionism show an increasing distance. Although this will affect London’s City, it will not lead to its demise. ‘Londinium’ was set up in 50 AD by the Romans as a trading hub and it will remain to be so. Its flows will probably be more directed across the Atlantic and through its extensive network of overseas territories.
A second trade shift involves the emerging Arctic trade route, which could be a boon for the North Sea region. This route could reduce the distance between Northeast Asia and Europe. Although there is competition from other sea hubs such as the Gulf and over land in the form of China’s One Belt, One Road initiative (OBOR), the North Sea will remain a central global link.
