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Cargo preference cuts would cost U.S.-flag jobs
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Budget initiatives floated by the President Feb. 6 would cost U.S.-flagged merchant ship operators business generated by cargo preference requirements.
The President proposed replacing some U.S. Department of Agriculture Public Law 480 food aid exports with cash disbursements. He also recommended eliminating appropriations for the Export-Import Bank of the United States. Under a 1985 law, up to 75 percent of USDA's humanitarian exports are set aside for U.S.-flagged merchant ships. The administration recommended that 25 percent of the PL-480 commodities be replaced in fiscal 2008 with direct cash payments, which would reduce U.S.-flag cargo allotments proportionately. Under a 1954 cargo preference law, up to 50 percent of cargoes financed through the Export-Import Bank are reserved for U.S.-flagged merchant ships. Allowing the bank to operate with proceeds from service fees instead of direct federal funding could effectively end the preference mandate. |
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