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Towards a network of trade gateways

Free ports act as transportation, logistics, and trade platforms, using their territorial exceptionalism as a competitive advantage. This article aims to rationalize the complexity of free ports. The historical evolution of free ports underlines a growing complexification and specialization that has led to a multitude of models. In the contemporary setting, they act as logistics, transportation, and trade platforms. Based on some factors a model of free ports was designed with a typology of thirteen types of free ports and their future prospects. Read this article about towards a network of trade gateways.

 

Literature review

Towards a network of trade gateways: Freeports have been elements of the international trade system for centuries. And also it has been subject to several changes in their role, nature, and function. Export processing zones are offering incentives for manufacturing and related activities with a particular focus on exports. Special economic zones are a free port paradigm that has been particularly applied to the Chinese context. Free ports are considered to be the broader term of a free zone as they include a rather large area. Free trade zones (FTZ) are considered to be enclosed duty-free areas for the purpose of providing warehousing. There is limited literature dedicated to free ports and no widely accepted definition of the phenomenon. The World Bank provided a general typology of free zones, but little is mentioned about their evolution.

 

Methodology

Towards a network of trade gateways: The review of free ports was supported by a mix of primary and secondary data. In the present study, the free port phenomenon is considered as a single case with various occurrences in forms, time, and space. Case studies embed an object in context allow depth, detail, and richness of data, are longitudinal by default and are process-oriented. Documents have been collected in international institutions reports, available specialized consultant reports, governments, and free ports websites. Free ports data was investigated applying this method in order to build a model of free ports with a typology, an explanation of the mutations of free ports in time and their future prospects.

Towards a network of trade gateways

Actors and the function of free ports

Towards a network of trade gateways: Freeports have been a development tool for Asian economies. At the microeconomic level, some studies show the advantages for users of the free port. Barbier and Véron incorporated several of these elements in order to show an evolution in time of the function of free ports. In the 1950s, FTZ were allowed to have manufacturing activities. There were around 50 foreign trade zones in 1979, around 100 in 1984, more than 200 in 1993 and more than 230 in 2015.

 

Towards a network of trade gateways: Factors in the evolution of free ports

The functional distinction between trade orientation free ports and industrial oriented free zones is not the key point since free ports represent the logistics orientation of both types of free zones. The evolution of free ports along with globalization of trade is another important major factor. One of the important factors emerging from the case study is customs extraterritoriality. This factor is not sufficient to explain the evolution of free ports and their wide variety.

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