Time as trade barrier is a macroeconomic value opportunity
Each day in transit compares 0,6-2,1 percent in Ad Valorem tariff. This is stated in NBER working paper by David L. Hummels and Geor Schaur. A young economist brought this finding to our knowledge and it is path-breaking. Consider trade in goods between EU and Asia via North-East Passage that cuts 14 days of transit (see how). Bluntly taken that is 8,4-29,4 percent cut in Ad Valorem tariff.
According to EU, value of trade between EU and Asia was 1 393 047 million € in 2016 (see). Hence, assuming majority of goods trade is sea-borne, shorter transit will result value of 117 016 to 409 555 million € annually. That is 117 billion to 409 billion € per year. And in ten years 1170 - 4090 billion €.
Moreover, goods trade between EU and Asia has increased 53% between 2010-2016. Maybe it grows same pace in 2016-2022 resulting value of 2 131 362 million € annually and respectively North-East Passage value 179 to 625 billion € per year. Times ten for ten years, please.
This makes it worthwhile to look into North-East Passage as a source of value. It is a macroeconomic opportunity for Finland, Norway, Russia and to all who trade goods between EU and Asia. I have started working on this. Have you?
(Yeah sure, Ad Valorem tariffs are product group specific, for some products transit is more sea-borne than for others and so on. Any of those do not take away the meaning of shorter time as a source for value. All critique to calculation is welcome. Usual caveats apply. )