CSCMP's Supply Chain Quarterly
October 18, 2018
Forward Thinking

Regional trade growth outpaces interregional trade

Infrastructure plays key role in facilitating trade within geographic regions, says Georgia Tech professor.

The growth of intraregional trade will change the transportation marketplace as carriers shift services in response to the increasing movement of products within various geographical regions of the world. Dr. H. Donald Ratliff, a professor at the Georgia Institute of Technology and executive director of the school's Supply Chain and Logistics Institute spoke on that subject in a keynote presentation at the recent Modex 2012 trade show in Atlanta, Georgia.

Ratliff said that with the exception of South America, the growth of intraregional trade (trade within a single geographic region) continues to outpace interregional trade among various regions throughout the globe. For example, exports within North America are growing faster than exports from North America to other parts of the world, he said. Likewise, exports among nations within Asia and within Europe exceed the volume of exports from those areas to other regions.

The logistics infrastructure available within regions plays a critical role in promoting intraregional trade, Ratliff said. Europe and North America have well-developed road networks for goods movement across borders, while intra-Asia trade is facilitated by that region's large number of seaports. The lack of infrastructure, particularly large seaports, he added, is holding back development of intraregional trade in South America.

In order for the United States to increase exports, Ratliff said, the government must provide more help to small and medium-size businesses, which lack the expertise to navigate foreign trade regulations. He also said that U.S. exports have been hampered by a public sector that does not understand the supply chain, as well as the lack of an agency tasked with addressing how supply chain and logistics improvements could boost exports.

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