[Congressional Record Volume 143, Number 141 (Monday, October 20, 1997)]
[Senate]
[Page S10833]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




FEDERAL MARITIME COMMISSION'S ACTIONS AGAINST RESTRICTIVE JAPANESE PORT 
                               PRACTICES

  Mr. HOLLINGS. Mr. President, I would like to take this opportunity to 
commend the Chairman of the Federal Maritime Commission [FMC], Mr. 
Harold Creel, and the other Federal Maritime Commissioners, Mrs. Ming 
Hsu, Mr. Joe Scroggins, and Mr. Delmond Won for their resolve in 
pursuing trade liberalization of Japan's restrictive port practices.
  The problem of unfair, restrictive port practices in Japan is a long 
standing one. The United States carriers and United States Government 
have asked the Japanese to reform their system for over a decade. The 
Japanese had refused even to acknowledge that this was a problem, much 
less to resolve it.
  Two years ago, the carriers, weary of the futility of diplomatic and 
commercial pressure, asked the FMC to address this. This was not a 
matter of the FMC grandstanding or attempting to justify its existence. 
In fact, I would note that the same Japanese restrictive port practices 
were challenged at the World Trade Organization [WTO] by European 
carriers. To date, the WTO has not acted on the European carrier 
petition. However, the FMC acted vigorously at the request of United 
States industry interests to address a long-standing, Japanese-created 
situation that could not be resolved through more amicable means. In 
September 1995, the FMC issued orders to gather information on the 
subject.
  In November 1996, the FMC issued a proposed rule, with monetary 
sanctions to go into effect April 1997.
  In April 1997, an agreement between the United States and Japanese 
Governments resulted in Japanese commitments to achieve certain steps 
toward reform by July 1997. Accordingly, the FMC postponed the 
effective date of the sanctions until September 1997.
  But then the Japanese failed to meet their April commitments. In 
September, the Japanese again asked for a postponement of the FMC rule. 
The FMC refused, and beginning in September, fees of $100,000 per 
voyage began accruing. The fees for the month of September, which 
totaled $4 million, were due and payable October 15, 1997.
  Despite frequent assurances by the Japanese carriers that they would 
pay the fees, when the October deadline was reached, they refused to do 
so. Accordingly, the FMC took the next step, which is authorized by 
statute and specifically spelled out in the final rule: to request that 
Customs deny clearance of Japanese vessels at United States ports, and 
to request the Coast Guard to detain the vessels. This action is 
entirely avoidable upon payment by the Japanese carriers of their now 
overdue debts to the United States.
  The Japanese port practices at issue result in costly, arbitrary, and 
unnecessary expenditures by United States carriers and prevent them 
from making their own decisions on whom to hire for stevedoring 
services, from being licensed to operate their own terminals, and from 
operating efficiently. These practices are injurious not only to U.S. 
carriers, but to all U.S. importers and exporters who rely on ocean 
shipping, and to the American consumer. Japanese port costs are the 
highest in the world, and American consumers of Japanese goods 
ultimately foot the bill. Moreover, Japanese carriers are not subject 
to such restrictions in their operations in the United States.
  None of these achievements of the FMC would have been possible were 
the FMC not an independent agency, separate from the executive branch 
departments. Only an independent agency, free from political pressure 
and the host of other concerns which frequently paralyze larger 
executive branch agencies, could have acted so swiftly and effectively. 
We must ensure that the FMC continue to retain its independent status.
  It is my understanding that United States and Japanese negotiators 
are coming close to an agreement that would resolve this issue. This 
issue would not be resolved, but for the actions of the FMC. Bravo, 
keep up the good work, and ensure that whatever issues the Japanese 
Government agrees to are enforced for the benefit of the shipping 
public.

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