Hisane Masaki | May 28, 2009 9:13AM EDT
The Japanese government released an annual report on what it deems unfair practices by trading partners, including the controversial "Buy American" clause and 35 other policies and measures taken by the United States.
Among those U.S. policies and measures are several related to maritime transport, including the Harbor Maintenance Tax and the Jones Act.
The annual report, released by the Ministry of Economy, Trade and Industry on Wednesday, warned of rising protectionism around the world amid the deep global economic downturn.
This year's report listed a total of 118 policies and measures taken by other countries and regions, up from 113 in the previous year's report. Of the 118 policies and measures, 36 have been taken by the United States, 24 by China, 21 by the 10-member Association of Southeast Asian Nations, 14 by the 27-nation European Union and the remaining 23 by other countries and regions.
Concerning the maritime transport-related U.S. policies and measures, the report specifically singled out the HMT and the Jones Act, which it said could be in violation of international trade rules set by the World Trade Organization, the Geneva-based watchdog on global commerce.
The report criticized the HMT and Jones Act as possible violations of the principle of "national treatment," one of the basic principles set in the WTO rules that guarantees equal treatment between domestic and foreign companies.
According to the report, the U.S. has operated the HMT system, which is designed to impose ad valorem taxes on freight belonging to entities that use harbors within the U.S., in accordance with the Water Resources Development Act of 1986 (Public Law 99-662) and its amendments since 1987.
In March 1998, the U.S. Supreme Court ruled that the HMT was unconstitutional with respect to exports. In response to the decision, the U.S. government stopped collecting the tax from exporters the following month. But the HMT is still imposed on importers, according to the report.
The Merchant Shipping Act of 1920, or the Jones Act as it is commonly called, specifies that only ships owned by U.S. citizens, built in U.S. shipyards and run by U.S. crews are permitted to engage in domestic passenger and cargo transport within the U.S. and its territories. This restricts exports of foreign-made ships to the U.S., the report said.
In addition to the national treatment section, the report also criticized the Alaska Power Administration Asset Sale and Termination Act and the Maritime Security Program (MSP), as well as the Jones Act, in its section on trade in services.
The Alaska Power Administration Asset Sale and Termination Act, passed in November 1995, requires the use of U.S. ships with U.S. crews in the export of Alaskan crude oil. The MSP, in place since 1996, provides subsidies to certain U.S.-registered vessels, the report said.
Contact Hisane Masaki at yiu45535@nifty.com.
