HOUSE EXPANDS SENATE PROPOSAL TO BOLSTER FMC

HOUSE EXPANDS SENATE PROPOSAL TO BOLSTER FMC

A proposed House compromise expands and toughens the Senate approach to the provisions of the omnibus trade bill aimed at unfair foreign shipping restrictions.

The 10-member House maritime sub-conference completed work on the compromise late last week, and sent it to the Senate sub-conference for evaluation. Congress is still shooting for a March 23 date for House consideration of the massive trade legislation.In the case of the maritime compromise, work was completed at the staff level, with the House sub-conferees signing-off on it.

There was no immediate reaction to the compromise on the part of Senate aides. On the House side, sub-conference leaders did not comment on the proposal.

The House proposal uses the Senate's language as a blueprint for increasing the Federal Maritime Commission's powers to investigate and address unfair shipping conditions experienced by U.S.-flag carriers.

For instance, the House provisions give the commission more specific instructions concerning its authority to conduct investigations: The

commission shall investigate whether unfair practices are used that directly affect the ability of operators of documented vessels to efficiently provide maritime services.

The commission would be required to find an unfair practice when the laws, rules, policies and practices of foreign governments unreasonably impair the ability of operators of documented vessels to provide maritime services or provide or use maritime-related services in the foreign commerce of the United States.

Such a finding also would be required when the actions of the foreign government discriminate against operators of documented vessels as compared to the treatment conferred upon the operators of foreign vessels by the United States.

Those quotes expand upon the Senate's wording, but represent a similar approach toward initiating investigations.

However, unlike the Senate, the House version then provides specific guidelines the commission should use in making a determination that unfair practices exist. It includesactions that:

* Permit restraint of trade in transportation services, including unregulated common management between shippers and carriers, and special arrangements that favor a foreign government's carriers or shippers.

* Deny fair and equitable market opportunities for U.S. carriers because of injurious cargo-sharing or reservation agreements.

* Deny internationally recognized seafarers' rights, including forced or compulsory labor, minimum age, wage, hour and safety conditions.

Both versions say commission probes can be started on the agency's own motion or upon the filing of a petition. But the House language tightens the section by saying the commission shall start an investigation on its own motion, or when a formal complaint is filed. The Senate says an investigation may be initiated by the commission or when a petition is submitted.

Also, both provisions say the commission should make its determination within 120 days, but then the House adds that an unfair practice would exist if the commission is unable to complete its investigation within 210 days

because it cannot obtain the necessary information from a foreign person or government.

Further, under the House approach, the commission could issue subpoenas to compel attendance and testimony of witnesses or the production of records. No similar section is in the Senate bill, but both retain confidentiality

sections.

Concerning sanctions, the proposed compromise says the commission could suspend tariffs or service contracts and impose a civil penalty not greater than 50 percent of the total freight charges earned from goods shipped to or

from the United States. The Senate bill does not include suspension of service contracts, nor does it mention civil penalties.

The president could waive a commission action, but in the House proposal, he would have to do so in writing and explain the reasons for the disapproval.

There is a carry-over in the new language from the House's original plan that featured a complex mechanism based on shipments carried under tariffs in various trades that would trigger commission actions.

In the latest version, the commission would have to begin an investigation whenever countries identified in a biannual agency report to Congress carry at least 20 percent of the cargo volume in the U.S. bilateral trade with that country, and transport at least twice the volume of cargo transported by U.S. vessels.