Ships Built With Foreign Subsidies Might Face Sanctions

After 18 months of talks, the international negotiators have failed to meet their own deadline for a trade agreement to end shipbuilding subsidies, the Shipbuilders Council of America (SCA) recently announced.

"We are extremely disappointed," said John Stocker, president of the SCA, the national trade association for the country's major private shipyards. "We are now going to pursue more aggressive courses of action, such as the sanctions legislation against ships built with foreign subsidies." The final round in the subsidy talks conducted under the auspices of the Organization for Economic Cooperation and Development (OECD) was supposed to take place in December 1990. The negotiations were scheduled to culminate on December 14, 1990 in a signed agreement among 16 nations to terminate government support of commercial shipbuilding and repair activities.

However, the parties continued to be unable to resolve their differences.

While Japan and European Community yards continue to benefit from subsidy programs, U.S. yards have received no subsidies since 1981. As a consequence, there have been no ships ordered from foreign commerce since that time. Ironically, the lack of U.S. shipbuilding aid programs has seriously hampered the American negotiators in the OECD talks precisely because they have so little to give up.

One of the SCA's next actions will be to press for quick passage of the sanctions bill when Congress reconvenes.

This bipartisan legislation, introduced in both houses of Congress on July 25 of this year, provides for fines to be levied against subsidized foreign ships that enter U.S. ports. The penalty would end when the subsidizing government terminated all shipbuilding-related aid.

Mr. Stocker emphasized that the SCA is not abandoning the OECD negotiations, but made it clear that U.S. shipbuilding and repair industry can no longer depend solely on the trade talks to bring a satisfactory resolution to the subsidies problem. "Three deadlines have come and gone," he declared.

"That's 18 months in which our shipyards have continued to suffer damage from foreign subsidies which shut us out of the commercial marketplace."

Other stories from February 1991 issue


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