The world’s biggest traffic jam is unblocked
Is trade what keeps the peace? The worldwide fallout from the blocking of the Suez Canal is a reminder of the vital part commerce plays in knitting different nations together.
Finally, the ship was on its way. Yesterday afternoon, almost a week after the Ever Given became wedged in the Suez Canal, the 400m-long container vessel floated free, thanks to a specialist salvage team working in high winds. The fourteen tugboats involved in its rescue honked their horns in celebration; shipowners around the globe breathed a huge sigh of relief.
The operation entailed dredging 27,000 cubic metres of sand from around the ship’s bow. Part of its cargo of 18,300 containers had to be removed to make it more buoyant.
Getting traffic moving normally on the waterway – which carries 12% of the world’s trade – could take several days more. Around 450 vessels have been stuck behind the Ever Given, some of them carrying perishable goods and livestock.
The 120-mile canal connects the Red Sea to the Mediterranean, cutting days or even weeks off the voyages of ships that would otherwise have to go around Africa. Designed by a French engineer, Ferdinand de Lesseps, and paid for by French investors, it opened in 1869. Nineteen years later it became a neutral zone under the protection of Britain.
But in 1956 the canal became the focus of a political crisis when Britain withdrew its forces and handed control to the Egyptian government. President Nasser then nationalised the canal, which was largely owned by British and French investors. Seeing this as a serious threat to their interests in the region – and Europe’s oil supply – Britain and France joined Israel in attacking Egypt. But under pressure from the US and Russia they were forced to withdraw, leaving a UN peacekeeping force to protect the canal.
Another crisis followed in 1967 as a result of Arab-Israeli hostilities. The canal remained closed until 1975.
The 1956 debacle was seen as a devastating blow to Britain’s status as a world power. And an American economist, William J Bernstein, argues that trade has shaped the whole of the modern world. “The urge to trade is hard-wired into our DNA,” he says, “and new patterns of trade always produce stresses, strains, cracks and discontents.”
Bernstein believes that nations that engage in trade almost always benefit from it. But equally, there are always some people who lose out when trading patterns change – and unless they are compensated in some way, they set about wrecking the system for everyone else.
A prime example is the 1930 Smoot-Hawley Tariff, which imposed duty on a wide variety of goods imported to the US. This, Bernstein argues, led to World War Two by hampering Germany’s economic recovery from World War One and leaving it unable to pay the reparations demanded by the Treaty of Versailles.
The resulting popular discontent made Hitler’s rise to power possible. “By contrast,” Bernstein adds, “European free trade has made a major party conflict among western and central European powers unthinkable for the first time in history.”
Is trade what keeps the peace?
An export opinion
Some say, yes. Wars are hugely expensive for all countries, whether they win or lose; and political leaders know that if they lose trading partners as a result, the economic damage will be even worse. Wars are also most likely to break out when opposing sides stop communicating properly: trade plays a large role in keeping communication channels open.
Others argue that military strength is the most important factor: predatory countries will always attack others if they are confident of winning. Only the knowledge that Taiwan is a US ally prevents China from attacking it; only the fear of retaliation prevents the use of nuclear weapons. Russia knew that it was likely to face economic sanctions when it invaded Crimea, but that did not stop it.
- Should there be a limit to the size of cargo ships?
- Is it acceptable to trade with nations which disregard human rights?
- Draw a map showing the Suez Canal and the alternative routes ships have to take when it is closed, showing the distances involved.
- Write a sitcom scene in which the captain of the Ever Given meets the captain of the ship at the end of the queue behind it.
Some People Say...
“Little else is requisite to carry a state to the highest degree of opulence… but peace, easy taxes, and a tolerable administration of justice.”Adam Smith (1723 – 1790), Scottish economist
What do you think?
Q & A
- What do we know?
- It is generally agreed that the incident will have wide economic consequences. In normal times, £290m of trade passes through the canal every hour. Millions of dollars in compensation will have to be paid to the owners of the ships affected by the blockage. Companies trying to hire alternative vessels have seen price rises of up to 47%. The Egyptian government has lost over $60m in toll money. The build-up of ships means there will soon be long queues at the ports they are heading for.
- What do we not know?
- One main area of debate is around what caused the Ever Given to run aground. Some believe that poor visibility and high winds – in which the ship’s stacked containers acted like sails – were to blame. But if the canal’s authorities do not allow ships into it if the wind is likely to create a problem, and no nearby ships were affected – so it could be that engine failure was responsible, or human error.
- Suez Canal
- It is 205m wide and 24m deep. It was expanded in 2015 to include a 22-mile parallel channel.
- Scooping up. It may derive from an old Dutch word for a hook used to collect things from a riverbed.
- Ferdinand de Lesseps
- He also came up with a plan for the Panama Canal, but because of epidemics among the local population and problems with finance the project had to be shelved.
- President Nasser
- Gamal Abdel Nasser held the post from 1956 to 1970. His stand over the canal established him as one of the most influential politicians in the Arab world.
- Arab-Israeli hostilities
- The Six-Day War, in which Israel defeated Egypt, Jordan and Syria, erupted in June 1967. Fifteen cargo ships were trapped in the canal until it reopened eight years later.
- A sudden and dramatic failure or fiasco.
- Lose out
- For example, workers in industries whose products become cheaper to import from abroad than to manufacture at home.
- The measure was championed by two politicians, Reed Smoot and Willis C Hawley. It is sometimes known as the Hawley-Smoot Tariff.
- Treaty of Versailles
- Signed at the Paris Peace Conference in 1919, it also forced Germany to give up territory and limit the size of its army and navy.