The Determinants indicators of Maritime Policy

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• The Determinants (indicators) of Maritime Policy
• (an initial report)
• By
• Dr K.X. Li
• Mr. J. Cheng
• The Hong Kong Polytechnic University

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Starting with real world examples

• US as the extreme for its protection policy to
  its maritime industry
• Transport from one US port to another, e.g., NY
  to LA, shall be carried by US flag ships
• An US ship shall be built, and repaired in an US
  shipyard
• An US ship shall be navigated by US seafarers
• And more
• While UK and EU country adopt a more free
  maritime policy. Why different?

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• I quote from Karl Marx-

the totality of these relations of production
constitutes the economic structure of society,
the real foundation, on which arises a legal and
political superstructure .
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• Research steps

• To define maritime policy
• To find indicators to reflect the foundation
• To establish relationship between indicators and
  maritime policy

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• How to quantify maritime policy

• Stern (2000) used Index method to identify types
  of barriers and the relative opening degree
  afforded to particular sectors across nations. We
  use it to quantify an economys maritime policy
  under the WTO framework.
• We try to find out which economys maritime
  policy is liberal or which protective?

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Data on maritime policy

• The country responses to WTO 1994 questionnaire
  (WTO NGMTS1994)
• The country responses to APEC 2000 transparency
  exercise questionnaire (APEC, 2000)
• Data on maritime subsidies from the Dept. of
  Transport, US
• Other USTR 2005, US General Accounting Office
  1994, UNCTAD 2005, Delegation of Australia 2000,
  Francois et al. 2000, Paixao 2001, LR (annual),
  etc.

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Cross-economy Comparison on Maritime Policy
Unacceptable area (group 3)
Higher degree of protection
Negotiable area (group2)
Acceptable area (group 1)
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Degree of Opening on Maritime Policy
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Determinants of maritime policy

• H1 to do with Balance of Payment (BOP)?
• H2 to do with the waterborne cargo
  transportation of national fleets -National
  Carriage Rate (NCR)?
• H3 to do with the employment of national
  seafarers - National Seafarer Employment Rate
  (NSER)
• More .?

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National Seafarer Employment Rate (NSER) 2001
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National Seafarer Employment Rate

• .

• A nations employment competency of seafarers
• Development of seafarer training

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National Seafarer Employment Rate

• NSER gt 1 Supply of Seafarer gt
  Demand of National Fleet
  (Philippines, Indonesia)
• NSER 1 Supply balanced against
  Demand (US, China)
• NSER lt 1 Supply lt Demand
  (EC, Hong Kong, Singapore)

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National Carriage Rate (NCR) 2001
.
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National Carriage Rate (NCR)

• .

• A nations tolerance for further opening
  its maritime industry and to observe the
  relation between maritime policy and the
  development of its maritime industry

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National Carriage Rate (NCR)

• NCR gt 1 DWT gt Trade Volume
  (Norway, Hong Kong)
• NCR 1 DWT balanced against
  Trade Volume (EC, Korea)
• NCR lt 1 DWT lt Trade Volume
  (US, China)

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Formula for Maritime Policy

• MAR. POLYit a0t a1 NCRit a2 NSERit
  a3 BOPit e
• i is the country
• t is the time
• MAR. POLY is the opening degree of a selected
  nations maritime policy
• NCR reflects the development of merchant fleets
• NSER reflects a nations employment situation
  against its national fleet
• BOP is for Balance of Payment (BOP)
• e is the standard error of the equation.

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The relation - Regression Test
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Conclusion

• Maritime policy is firmly based on economic
  conditions
• Optimal Maritime Policy different countries at
  different development stages under different
  conditions should or would impose an different
  maritime policy

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Implications and future study

• To test the study with more data
• To test the study with more indicators
• To guide Chinese maritime policy to avoid an
  over-open policy or vice-versa

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• Thanks and
• welcome your comments
• The End