Good Bye, Magellan

 

Tunneling through Andes to speed global trade.

BUENOS AIRES, Argentina (AP) — South American engineers are trying to tackle one of the continent’s greatest natural challenges: the towering Andes mountain chain that creates a costly physical barrier for nations ever-more-dependent on trade with Asia.

The proposed tunnel through the Andes will allow ships to by pass the dangerous Straits of Magellan around the tip of South America, saving time and money.

The trip over the mountains is slowed by snow, and impassable for days at a time.  A tunnel would change all that.  A consortium of companies with experience in building tunnels have proposed the 32 mile long tunnels and electric trains to cut shipping costs.

Currently, much of the processed soy oils, wine and meat Argentina sends to China, as well as Asian electronics destined for Brazil, must first sail around the tip of South America, adding nearly 3,000 nautical miles and another week to the trip. Shipping by rail between Atlantic and Pacific ports would unite the most productive regions of Chile and its South American neighbors, making trade more competitive for all involved.

Both Chile and Argentina, as well as Brazil, Uruguay, and Paraguay, will benefit from the lower shipping coasts.

Chile’s mining wealth and Argentina’s agricultural bounty have sustained their economies, delivering positive trade balances year after year, but both countries need to produce and move those exports more efficiently to maintain growth. Chile imported $75 billion worth of goods and exported $81 billion last year, while Argentine imported $74 billion and exported $84 billion, the U.N.’s regional economics commission reported Tuesday.

How likely is it the tunnel will be built?  How will new routes affect global trade?

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One Response

  1. Reblogged this on msamba.

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