International seatrade has fluctuated greatly because of expansions and contractions in the global economy. Developments in commodity markets have been equally unsteady, presenting serious and often intractable problems for the trade and economic development of countries. These developments, together with the excessive overbuilding in the shipping industry and the unprecedented advances in cargo packaging, handling, and transport technologies, have resulted in a major rationalizing and restructuring of the maritime sector. Facing declining market shares for their national flag carriers and reduced cargo flows through many of their ports, governments have resorted to protectionist measures to maintain the industry's viability. In many cases, however, such maritime nationalism has merely hurt seatrade. Given these developments, developing countries have stringent requirements to remain competitive in traditional export commodities and to succeed in diversifying exports and promoting domestic industries. These circumstances make it extremely difficult for developing country governments to ensure the efficient conduct of trade while providing shipping and port services. Maritime nationalism is part of the debate, and it impedes required system adjustments. Its economic and social costs are usually very high. (Copyright (c) 1989 The World Bank.)


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