New Call For Jones Act On Trade Agenda

New Call For Jones Act On Trade Agenda

Business Group Wants Maritime Service Rules Under WTO

      The World Trade Organization in June heard yet another call for worldwide maritime rules under General Agreement on Trade in Services.
     In a position paper distributed during a WTO meeting in Qatar, the International Chamber of Commerce endorsed "efforts to liberalize maritime transport services, provided liberalization is substantial and there is no acceptance of 'grandfathering' restrictive practices."
     That was an obvious reference to U.S. cabotage laws--specifically, the Passenger Vessel Services Act of 1886 and the Jones Act of 1920--that hold U.S. domestic maritime markets for vessels owned, built, flagged and manned in the U.S. Both statutes were exempt from General Agreement on Tariffs and Trade because they preceded GATT, which began in 1947 and expired in 1993. GATS is the successor to GATT, and it is administered by the Geneva-based WTO.
     The ICC's position supported repeated attempts by the European Union, Japan, and other countries to win multilateral bargaining over the cabotage laws and other U.S. merchant fleet promotion laws and programs. The U.S. has consistently refused to negotiate maritime issues at the trade table, noting that U.S. international shipping markets are already wide open. The Bush administration is on record in support of the Jones Act.
     By mid-June, the EU, China, Hong Kong, Korea, Japan, Norway and Chile had filed formal maritime service bargaining proposals for a WTO GATS round scheduled to begin next November. These nations and others have been critical of the Jones Act in the past, and Japan is awaiting a WTO decision on its five-year-old complaint that the Jones Act violates WTO rules.
     A three-year GATS maritime services round ended without accord in June 1996. During the talks, U.S. trading partners demanded an agenda that included the Jones Act and other cabotage laws, the cargo preference laws that set aside specific shares of government imports and exports for U.S.-flag ships, the 10-year, $1 billion Maritime Security Program authorized in the Maritime Security Act of 1996, and the authority of the independent Federal Maritime Commission to respond unilaterally to unfair trade complaints brought by U.S.-flag liner service operators. However, the U.S. insisted that the bargaining be limited to port access and auxiliary service issues.
     In a related development, the Canadian government said it would be more aggressive in promoting that country's shipyards.
     At a press conference in Ottawa, Brian Tobin, Canada's industry minister, said the government will provide a "structured financing facility" to provide low-cost financing, including loan guarantees and interest buy-outs, to Canadian and foreign buyers of Canadian-built ships.
     Tobin said he will also work through the WTO and the Organization for Economic Cooperation and Development to address "unfair trade practices abroad that are deeply hurting the Canadian industry."
     Other Canadian officials said Tobin would target subsidies in the EU and in South Korea, but they conceded that there is little chance of forcing Jones Act roll-back or repeal.

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