SENATOR PROPOSES TO END LINES' ANTITRUST IMMUNITY

SENATOR PROPOSES TO END LINES' ANTITRUST IMMUNITY

Sen. Howard Metzenbaum, D-Ohio, proposed legislation ending the antitrust immunity used by ocean carriers to meet and collectively set rates and cargo capacity levels.

He said the exemption from anti- trust law costs U.S. consumers $2 billion to $3 billion each year in higher prices and puts U.S. companies at a disadvantage in foreign markets."Given the fragile state of our economy, we simply can't tolerate a cartel that makes it more costly for U.S. producers to sell overseas," Mr. Metzenbaum said Friday in introducing the measure.

Introduction of the legislation comes as "good news" to U.S. manufacturers reliant on ocean shipping, said Roger Wigen, manager of transportation policy for 3M Co. of St. Paul, Minn.

Mr. Metzenbaum, along with co-sponsors Sens. Arlen Specter, R-Pa.; Orrin Hatch, R-Utah; and Chuck Grassley, R-Iowa, drafted the legislation over the summer. He waited to introduce it until he received assurances from the Senate parliamentarian that the measure would be considered only by the Judiciary Committee and not sent to the Commerce, Science and Transportation Committee in a joint referral.

A joint referral would have killed the legislation before it could reach the full Senate for debate because Sen. Ernest Hollings, D-S.C., chairman of the Commerce Committee, and Sen. John Breaux, D-La., chairman of its Merchant Marine subcommittee, are both on record as strong supporters of both the maritime industry and its antitrust exemption.

Mr. Metzenbaum chairs the antitrust subcommittee of the Judiciary panel and his bill is supported by Sen. Joe Biden, D-Del., the Judiciary Committee chairman. The antitrust subcommittee has not scheduled any hearings.

The Commerce Committee will not seek joint referral, a spokeswoman for Mr. Breaux said Friday. "However, Sen. Breaux will make sure he voices his opposition to the bill" if it reaches the floor, the spokeswoman said.

Mr. Metzenbaum said he has always opposed the exemption because of inevitable price increases, but said the maritime cartels now are acting collectively to control capacity and to close ports.

Citing one "recent abuse," Mr. Metzenbaum said that last year members of the North Europe-USA Rate Agreement conference agreed to eliminate services to the Port of Philadelphia.

"Estimates were that $900,000 in direct revenues, 45 jobs and $133,470 in state and local taxes are in jeopardy because of Neurusa's collusive agreement to eliminate services," he said.

"The fact is that antitrust immunity has allowed ocean shipping conferences to decide which U.S. ports will survive and prosper and which U.S. ports will go under," Mr. Metzenbaum said. "That simply is not a power that shipping conferences should have over U.S. ports."

Shippers would gain "more freedom to deal with carriers," he said. Shipping lines will benefit because they will be released from the time- consuming demands inherent in government regulation, said Mr. Wigen of 3M, who next year becomes chairman of the National Industrial Transportation League, a leading shippers' group.

Congressional scrutiny will "bring to the forefront the problems U.S. industry has had in doing business fairly with ocean carriers," said Peter Gatti, the NIT League's director of policy.

Lawmakers are hearing more about ocean shipping from their manufacturing constituents because of the "creation and evolution of the so-called super- conferences that have placed a barrier between individual shippers and carriers," said Mr. Gatti.

"Why should this industry (ocean shipping) be treated any differently than any other American industry," regarding antitrust standards, said Rob Quartel, a former member of the Federal Maritime Commission who is president of U.S. Shipbuilding Consortium of Greenwich, Conn.

Ocean carriers' immunity can be removed with no loss in operating efficiencies, and the Justice Department is capable of dealing with foreign- flag cartels, he added.