Friday, 2 February 2007

Counter-Trade In Rubbish

I came across an interesting story in the Independent this week. Just before Christmas, the world's largest container ship - the MS Emma Maersk - docked in the UK, laden with our Christmas presents. The boat has now turned around and is back on its way to China. (See article).

An important part of International Trade is the concept of counter-trade. It isn't efficient for a boat to sail half way around the world full of goods, and then to sail half way around the world again empty. If so, then an interesting question arises of what it is carrying. With the demise of manufacturing in the UK, what is it that we can export to China?

The answer is our rubbish. The UK has a real problem with waste disposal - there just isn't enough land for landfill sites and the relative cost of recycling rubbish is just prohibitive. Equally, China has a large demand for recyclable plastics, paper, steel and electrical goods. It is now cheaper to send plastic waste from London by sea to China than it is to send it by road to Manchester.

Of course, the cynics would argue that as most of what we import from China is rubbish anyway, the trade simply redistibutes it from one part of the world to another. On a more positive note, the trade is providing a much needed facility for the UK. I wonder if the Chinese would be interested in importing our nuclear waste?

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