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The importance of maritime trade protection for Australia
This annotated bibliography provides an overview of literature on maritime trade and security. It discusses the impact of disruptions in maritime trade, the role of maritime forces in protecting trade (including energy flows and essential sea supply) and the dependence of various countries and regions on maritime trade for national security and prosperity. It also covers the challenges to western maritime dominance and the renewed attention on maritime trade warfare or commerce warfare.
Key takeaways
- The security of international maritime trade is critical to global food and energy security.
- Globalisation has increased dependence on secure maritime trade to drive national economies.
- The ability of trade to deter conflict declines when states possess substantial maritime capabilities.
- The dependence on international maritime trade under globalisation, coupled with challenges to western maritime dominance, has focused renewed attention on maritime trade warfare and trade protection.
- Commentators have argued that Australia’s exposure to the disruption of seaborne trade, which could deny critical warfighting supplies, means there is a need to enhance the protection of Australia’s seaborne trade.
There is long-standing recognition of the connection between maritime trade, international security, and national power and prosperity. It was in the 17th century that English nobleman and explorer, Sir Walter Raleigh, pronounced ‘for whosoever commands the sea commands the trade; whosoever commands the trade of the world commands the riches of the world, and consequently the world itself’.
In ‘Maritime dependency and economic prosperity: Why access to oceanic trade matters’, Jesse M Lane and Michael Pretes contended that the ability of a country to access international waters and engage in international trade, while creating a dependency, is a key determinant of a nation’s economic success. International maritime trade is critical to global food security, global energy security and the functioning of modern daily life. Maritime commerce and ports are also key sectors for employment and productivity. As the current global order comes under challenge from various actors and threats, western commentators are increasingly highlighting the vulnerability of international maritime trade to hostile action. This annotated bibliography discusses the importance of international maritime trade, especially to Australia’s security and prosperity.
Free and open maritime trade is becoming more and more important for global food security. Unforeseen interruptions – such as the invasion of Ukraine and the resulting shipping hazards in the Black Sea and its ports and Houthi terrorist strikes in the Strait of Bab-el-Mandeb – decrease supply, create price volatility and drive potential food shortages and consequential increased insecurity in vulnerable market countries. These risks were noted in the United Nations Trade and Development’s (UNCTAD) ‘Review of Maritime Transport 2023’ report, which also predicted moderate growth in seaborne trade over the period 2024-2028 despite disruptive shocks. International maritime trade will remain essential and will grow. Download the PDF report here.
In ‘Chokepoints in global food trade: Assessing the risk’, Laura Wellesley, Felix Preston, Johanna Lehne and Rob Bailey used tools to estimate the volume and value of staple foods passing through maritime chokepoints. Their findings, while from a decade ago, indicated that an important share of global trade in strategic crops passes through one or several of the globe’s significant maritime chokepoints, which can be more readily disrupted by hostile action. In volumetric terms, annual throughput ranges from 29 million tonnes (Strait of Hormuz) to 91 million tonnes (Straits of Malacca). In terms of bilateral trade flows, 19,564 of the total 41,873 reported trades in 2014 passed through at least one of the seven chokepoints.
Dependence on maritime trade for national security and prosperity
Energy security is similarly dependent on secure international maritime trade, and is similarly at risk of impediment at key straits and chokepoints. In ‘The roles of maritime forces in protecting energy flows’, Andrew Forbes noted the very high dependence in the Asia Pacific region on imported energy, primarily from the Middle East. The global consequences of disruption to these energy flows is highlighted by the prominence of the Asia Pacific as the primary driver of global economic growth focused on North Asia, with major contributing economies being China, Japan, the Republic of Korea and Taiwan. Forbes stressed the major role navies and maritime constabularies have in deterring and responding to attacks on this seaborne trade.
Many polities and nations, such as the European Union (EU) and the United Kingdom (UK), strongly rely on maritime trade for national security and prosperity. The life altering impact of disruption, destruction or denial of maritime trade and activity is illustrated by the authors of an EU analysis, entitled ‘The Importance of Maritime Transport for Economic Growth in the European Union: A Panel Data Analysis’. The blue economy of the EU provides food and other resources, supports tourism, facilitates transport and generates the production and use of renewable energy. European shipping comprises a large share of the world’s fleet (over 40%), while the total gross weight of goods transported through EU short sea shipping amounted to 1.8 billion tonnes.
For island nations such as the UK, the reliance on the maritime environment is even more stark. In 2013, in ‘Learning from History: British Global Trade and the Royal Navy’ Simon Wallis assessed that around 90 to 95 per cent of British economic activity was dependent on the sea, with UK shipping contributing £10 billion to GDP and £3 billion in tax revenue, making it the third largest service sector industry in Britain after tourism and finance. Wallis cited research indicating that globalisation was forcing a dramatic rise in British dependence on maritime trade. British seaborne imports were projected, after adjustments for inflation, to grow 287 per cent over the following two decades, and exports were projected to increase by 119 per cent.
Challenges to maritime dominance and maritime trade warfare
The value of British imports in 2010 stood at £345 billion and was expected to reach £1.95 trillion by 2030. In the same period, export values were expected to rise from £233 billion to £1.63 trillion. Wallis warned that despite these figures, there was insufficient protection against disruption. This underlines the fact that Britain remains heavily dependent on the sea for its prosperity and economic stability. Wallis contended that the Royal Navy did not have sufficient strength to deal with the low-level threats posed by piracy and terrorism in addition to its other commitments. More importantly, there was a need to overcome a belief amongst taxpayers and the political establishment that the interconnected nature of the international trade system was protection against its disruption by a nation state adversary in pursuit of its own national interests.
Reinforcing the view that the interconnectedness of international trade is not an automatic safeguard is Nizan Feldman and Mark Shipton’s ‘Naval Power, Merchant Fleets, and the Impact of Conflict on Trade’. The findings of their study were contrary to the notion that trade integration fosters peace due to the assumption that conflict depresses third-party trade and thereby reduces trade-integrated states’ propensity to initiate conflict. It showed that naval power and merchant fleets mitigate trade-related costs of conflict. Thus, the ability of trade to deter conflict declines when states possess substantial maritime capabilities.
There is a growing concern that western maritime dominance, which helped secure the global order in place since the Second World War and created the environment for the current system of international trade, is under threat. Basil Germond’s ‘Maritime power shapes the world order – and is undergoing a sea change’ and Martin Murphy’s ‘Triple Barrels: The Economic, Financial and Maritime Warfare Nexus in the Twenty-First Century’ are both of this view. Others, such as Kevin McCrannie in ‘Houthi Attacks in the Red Sea: A New Twist on the Jeune École?’, postulate that there are factors besides geostrategic state competition and potential interstate war that are challenging western maritime dominance and provoking a rediscovery or rethinking of western naval doctrine to protect maritime trade.
The importance and dependence on international maritime trade under globalisation, coupled with challenges to western maritime dominance in both trade and naval spheres, has focused renewed attention on maritime trade warfare - otherwise known as commerce or economic warfare – as well as high-intensity maritime warfare. Observations on the development of maritime trade warfare over recent centuries and its relationship to maritime warfare and strategic thought can be found in ‘Economic Warfare and the Sea: Grand Strategies for Maritime Powers, c. 1600-1945’ edited by David Morgan-Owen and Louis Halewood. Some scholarship has centred on whether maritime trade warfare is an ancient tactic that is no longer viable given the interconnectedness of the global economy and the nature of the modern commercial shipping, or one that should be promoted and exercised by modern navies from both an offensive and defensive perspective; for this debate see Christopher McMahon’s ‘Maritime Trade Warfare’.
Firmly stating that maritime trade warfare is a viable and likely tactic in a future geostrategic conflict, and a neglected form of warfare by modern western navies, is ‘It’s a navy’s job, only no navy can do it! Understanding and Addressing Western Neglect of Maritime Trade Protection’ by Lieutenant Commander Matthijs Ooms. By reference to the historical cost in human lives and resources due to the neglect of maritime trade protection in past conflicts, Lieutenant Commander Ooms urges the development of a comprehensive trade protection strategy, and in the military domain, the establishment of a Joint Force Maritime Trade Component to take responsibility for trade warfare issues.
Australia’s dependence on secure and reliable maritime trade
Australia, due to its geographic and national circumstances, is especially dependent on secure and reliable maritime trade. The Australian Naval Institute and Naval Studies Group’s report, ‘Protecting Australian Maritime Trade 2022’, found that Australia was the 5th largest user of shipping services in the world, with maritime trade accounting for over 99 per cent of Australia’s imports and exports by volume and over 79 per cent by value. Further, Australian container trade and flow of manufactured imports depended on a hub (Singapore) and spoke model, with only the Port of Melbourne having the ability to handle larger capacity Panamax container ships should the Port of Singapore be unavailable. Australia only produced 22 per cent of its petroleum products from its own reserves; the remainder came from imported crude or processed products from Asia and the Middle East. Despite this heavy dependence on international trade, Australia only had about a dozen ships of any note, none of which carried oil, liquefied petroleum gases (LPG) or containers. The authors asserted that Australia’s exposure to disruption meant there was a need to enhance protection of Australia’s seaborne trade. Download the PDF report here.
David Uren, an analyst at the Australian Strategic Policy Institute (ASPI), echoed this assessment in ‘The trade routes vital to Australia’s economic security’. While this reliance and vulnerability is recognised in the ‘National Defence: Defence Strategic Review 2023’, Uren argued it is imperative that defence strategy and planning be informed and derived from up-to-date and accurate data about what Australia trades, via which routes, and to and from which specific locations. However, some contend that Australia’s true character of a maritime nation has not been well understood and that this has undermined the importance of a maritime strategy to the nation’s defence and security; see ‘An Australian maritime strategy: resourcing the Royal Australian Navy’ by Jennifer Parker of the Australian Strategic Policy Institute (2023).
Certain analysts argue that some missions, such as sea lines of communication (SLOC) defence, are simply neither practical nor feasible for Australia; see ‘Australia’s seaborne trade: Essential but undefendable’ by Hugh White. White argued that a fleet ten times the size of what was contemplated would be required to defend critical SLOCs and keep imports flowing. However, in ‘Australia’s essential need: not seaborne trade but seaborne supply’, James Goldrick highlighted the absolute criticality of maintaining supply lines for Australia’s territorial defence.
Lieutenant Robert Rushby