Coastal Resources, Territories & Maritime Trade

Exclusive Economic Zone (EEZ) refers to the maritime space to which a nation is politically and economically entitled because of its coastal or insular territories. EEZs are important for two main reasons. Firstly, any natural resources within a nation’s EEZ represent an economic asset, such as fishing rights, oil or natural gas reserves, and even wave-produced energy. Secondly, given the increasing importance of maritime trade to national economies, states and governments around the world are engaged in campaigns to secure and exploit their respective EEZ as passageways for trade.

Coastal Resources, Territories & Maritime Trade

In Latin America, there are two notable examples of the importance of EEZ. In the case of Colombia, the government seeks to ensure and secure its EEZ around the Colombian islands of San Andres & Providence in the western Caribbean. Similarly, in Bolivia, a land-locked country, the government has for decades claimed a maritime outpost through Chilean territory in order to secure an EEZ. Both Colombia and Bolivia are countries rich in natural resources and commodities. However, Colombia has a definitive advantage when it comes to international trade because it has an Atlantic and a Pacific coastline. These cases in Latin America highlight the importance of sea and ocean ports in the development of export and import economies.

The most important EEZ discussion in recent years has been that of the South China Sea. As of 2016, the Association of Southeast Asian Nations (ASEAN) decided to constitute a common market. Currently, the ASEAN Economic Community represents a total population of over 600 million inhabitants and the world’s third largest market as well as labor force. Thus, ASEAN becomes a major economic union of the Asia Pacific region and a counterbalance to China’s leadership. Given this scenario and the economic importance of the South China Sea, Vietnam and the Philippines (ASEAN members) have legally challenged Beijing’s claim to an EEZ in the region.

The case of EEZs in Asia and ensuing political instability in this important region could lead to higher transportation and production costs as well as a slowdown in Asian manufacture. The South China Sea is a central trade route between Asia, Africa, and the Middle East with approximately five trillion dollars of the world’s total maritime trade navigating through it every year. Traders in commodities and consumer goods would be wise to assess their strategic plans and proposed trade routes in the region.

The sample cases above are factual demonstrations of how EEZs play a central role within the commodity and consumer good markets. Furthermore, they highlight the advantage that nations with sea and ocean ports have when it comes to economic development and trade. The potential of both commerce and natural resource exploitation as part of the EEZ of each specific country is an element that should be taken into consideration by governments and investors worldwide.

(Read more about Pineapple Juice and the Global Fruit Trade)