Mature hub ports in the free trade environment, the way forward from a global supply chain perspective: an Asian case

Asia-Pacific countries with divergent economic and political backgrounds developed a regime of bilateral free trade agreements in response to globalization. Challenged by the 1997 and 2008 financial crises, this Asian trade regime has remained intact, although the most powerful stakeholders have changed positions, as indicated by the strong emergence of China in the past decade. Efforts of key trading partners to tackle non-tariff barriers (e.g., rule of origin and customs formalities) in the region have yielded little progress thus far. Instead of aiming at a regional consensus on non-tariff barriers by all member states, a global supply chain (GSC) approach is recommended. Mature hub ports at strategic locations with advanced institutional measures could set up international trade facilitation centers co-locating multinational customs formalities. This GSC approach may also be adopted to construct a GSC hub development model that explains the transformation of hub ports.