SUPPORT THE US MERCHANT FLEET

It was once said that "free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular." The unpleasant fact of life is that free trade, like a free lunch, can't be had.

Government, industry and media alike have devoted a great deal of time to the trade issue, one of the more alarming problems the country is facing. All sides agree there is a crisis at hand; there is, of course, less agreement on the solution. Squaring off are those who favor tariff and quota protection, and those who favor persuading our trading partners to be more generous.Domestic competitiveness - the ability of U.S. companies to compete with foreign companies in the production of goods and services - is the topic of the hour. What has been left out of the discussion is the fact that U.S. businesses compete not just against foreign businesses, but against foreign governments as well.

In addition to economic factors favoring foreign goods and services, political factors weigh heavily toward foreign products in some countries. For example, many nations have strong export promotion policies and assist their firms in obtaining financing, insurance and other services.

Nowhere does the United States more closely compete with foreigners than in the shipping industry. The trade in ocean transportation services is one of the "invisibles" that make up commercial transactions. The United States ''imports" 95 percent of its ocean transportation services every year; we use foreign-flag ships to carry everything from television sets and cars to scrap iron and lumber.

This is because foreign vessels are less costly to operate, but it is also

because foreign nations are more willing to support their merchant fleets than is the United States. Many countries reserve huge chunks of their commercial shipments for their own carriers.

Meanwhile this administration has dismantled the Merchant Marine Act of 1936 piece by piece, doing away with the promotional programs that were intended to keep our fleet competitive on the world market.

Will administrative "persuasion" give more of this trade to U.S.-flag ships? Not likely. Is "competitiveness" the problem? No. Higher wages are the result of a higher standard of living. The fact that U.S. vessels are more costly to operate than most foreign vessels must be accepted.

For 200 years we have chosen, without interruption, to support a merchant fleet because of its inherent value to the nation as a whole. Now that support is eroding even while foreign nations make efforts to reserve cargo for their own ships.

Free trade, the story goes, is honored by governments in principle, but never in practice. Sadly, the very real threat of sanctions is the only effective means of persuasion. Shortly, I will introduce a new bill designed to replace the car carrier bill of the last Congress. This measure will add South Korea as a target nation under the same regime as H.R. 3655.

In addition, a more comprehensive maritime trade bill has evolved in the Merchant Marine & Fisheries Committee that mandates that the Federal Maritime

Commission, under certain conditions, investigate the trade practices of any nation that is discriminating against the use of U.S.-flag vessels in the

carriage of any cargo to the United States. If the nation's trade practices are deemed to be unfair, then negotiations are to begin that result in either the removal of the unfair trade practices or the shipment of an equal amount of the cargo on U.S. vessels as on the foreign nation's vessels. A civil penalty is imposed on the foreign carrier if negotiations have not produced change within six months, unless no U.S. ships are available to move the cargo. I will introduce the bill in the next few weeks.

To pull the rug out from under an industry, as this administration has done with our merchant fleet, and then credit its demise to a lack of ''competitiveness" may be the most unfair practice of all. It is time to acknowledge the real market forces behind the world shipping industry.

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