CARGO LAWS REASONABLE

CARGO PREFERENCE: The very thought is almost certain to raise the hackies of shippers, especially farmers. All too often they think of it as a costly obstacle to entering overseas markets. Or, equally objectionable, as a big

dollar item in the Department of Agriculture budget that goes to shipowners instead of hard-pressed farmers.

That, however, may be starting to change. Bruce Carlton, executive director of the Joint Maritime Congress, was invited to speak recently to the National Wheat Growers Convention in San Diego. That a spokesman for a considerable segment of U.S.-flag shipping should be invited to address a major farm group - specifically, to give the merchant fleet's case for flag preference in carrying government-generated cargo - in itself was encouraging. His message was that the agriculture and shipping industries have more to gain by working together than fighting.The Cargo Preference Act of 1954 requires:

(1) That at least 50 percent - being phased up to 75 percent - of government-generated cargoes, such as the giveaway and "concessional" cargoes under Public Law 480, largely farm products, must be carried on U.S.-flag ships.

(2) That the government pay an ocean freight differential to offset the higher cost of shipping U.S. flag. Funding of the differential is an item in the Department of Agriculture budget, but Mr. Carlton said that was a mere technicality.

"I can say without hesitation that if cargo preference was purged from the books, all of the money needed to fund it would go right back into the general fund of the U.S. Treasury. America's farmers would not see one penny of it."

Critics who contend that cargo preference means less food shipped abroad for humanitarian relief, he added, could just as logically suggest that the wheat be bought from Argentina, Australia or Canada. This would greatly increase the amount of grain purchased.

But, he continued, "we should not foolishly turn our backs on an American industry in favor of a cheaper overseas source when making foreign aid purchases - just as we should not use all foreign-flag shipping to carry our subsidized cargoes."

Lack of a clearly defined, comprehensive trade program to replace present ''naive and out-of-date" farm and trade policies is really to blame for the poor showing in farm exports, Mr. Carlton said, while cargo preference is ''at most an annoyance."

An opportunity for the maritime and farm industries to cooperate, Mr. Carlton said, would be to oppose foreign aid cash transfers - simply handing over funds to foreign governments to spend elsewhere. That system, so vulnerable to maladministration abroad, so diametrically opposed to U.S. efforts to reduce our trade deficit and enhance our exports, is a target deserving close scrutiny.

Cargo preference as practiced by aspiring maritime nations is a source of constant controversy, never more so than today. There are, of course, countries where all cargo and all ships are government-owned. No one has yet come up with a preference formula that would apply to commercial cargoes equitably in those and market-oriented countries.

The preference laws of the United States, applying to government-owned or government-sponsored cargo, are something else. Reasonable and restrained, they can co-exist with, and leave unshackled, the commercial flow of overseas trade.

During the debate over cargo preference for government cargoes early in 1985, a series of bills were introduced to exempt specific cargoes or programs. We probably have not seen the last of such maneuvers. They are an evasion, an attempt to escape from facing up to the real causes of our decline as an exporting power. The country and the economy deserve something better.

For the full story: Log In, Register for Free or Subscribe