[Congressional Record (Bound Edition), Volume 147 (2001), Part 1]
[Extensions of Remarks]
[Pages 136-137]
[From the U.S. Government Publishing Office, www.gpo.gov]



 INTRODUCTION OF THE BINATIONAL GREAT LAKES-SEAWAY ENHANCEMENT ACT OF 
                                  2001

                                 ______
                                 

                         HON. JAMES L. OBERSTAR

                              of minnesota

                    in the house of representatives

                       Saturday, January 6, 2001

  Mr. OBERSTAR. Mr. Speaker, on January 3, I introduced legislation, 
the Binational Great Lakes-Seaway Enhancement Act of 2001, to improve 
the competitiveness of the Great Lakes-St. Lawrence Seaway system and 
restore its vitality.
  Since the opening of the St. Lawrence Seaway more than 40 years ago, 
the Great Lakes-St. Lawrence Seaway system has become a vital 
transportation corridor for the United States. The Seaway connects the 
Great Lakes with the Atlantic Ocean and makes it possible to ship 
manufactured products from our industrial Midwest and grains from the 
Upper Plains directly to overseas markets. Benefits of efficient 
operations of this transportation route are not limited to the Great 
Lakes region but extend throughout the United States. Congress 
recognized the broader impacts and, accordingly, designated the Great 
Lakes as America's fourth seacoast in 1970.
  The Great Lakes region and the international markets recognized the 
system's potential, as evidenced by the sharp rise in vessel and cargo 
traffic through the Seaway after its opening in 1959. Unfortunately, 
that potential was never fulfilled. The upward trend in cargo traffic 
peaked around 1977-79. It then went into a long decline, precipitated 
in part by a nationwide economic recession that hit the manufacturing 
sector particularly hard, and prolonged in part because of capacity 
constraints imposed by the Seaway.
  Locks on the Seaway and the Great Lakes were built as long ago as 
1895. New locks

[[Page 137]]

constructed for the Seaway between the mid- and late-1950s, as 
authorized by Congress in 1954, were built to the same size as those 
completed in 1932. Locks and connecting channels were limited to 27 
feet of draft. Because vessel size had grown over time, Seaway 
facilities were too small on opening day to serve the commercial fleet 
then in existence. Today, they are capable of accommodating no more 
than 30% of the world's commercial fleet. An undersized Seaway that 
denies large, specialized, and efficient vessels access to the system 
will prevent U.S. products, especially those from the Great Lakes 
region, from competing effectively in the global economy.
  In addition to declining traffic, inadequate investment in Seaway 
infrastructure caused the mix of cargoes shipped through the system to 
be transformed from one that was diverse to one composed largely of 
low-value commodities. Although the trend of cargo tonnage through the 
system turned up once again in 1993, current cargo mix consists of 
essentially steel coming to the Great Lakes region from abroad, grains 
going overseas, and iron ore and coal moving from one port to another 
within the region. Since the late 1980s, industrial manufacturing in 
the United States has recovered through investment in technology and 
corporate restructuring. Industrial production is flourishing once more 
in the Great Lakes region; Midwest economies are booming. Yet, only a 
small volume of high-value finished goods is shipped through the 
system. The Great Lakes region, therefore, has not been able to 
participate fully in this resurgence of economic strength due to 
limitations in the Seaway's capacity.
  As we enter a new millennium, it is fitting that the Great Lakes-
Seaway system is given an opportunity to modernize its structure and 
facilities so that it can compete on an equal footing with other 
transportation routes such as coastal ports and the Mississippi River. 
The United States has great seaports on its Atlantic, Pacific, and Gulf 
Coasts. The Mississippi River, likewise, is an extremely vital inland 
maritime transportation artery in the mid-section of the country. A 
competitive and successful Great Lakes-Seaway system would complement 
these other major transportation routes. The United States would 
greatly benefit in global competition by such a balanced national 
maritime transportation system.
  The Seaway differs from the other transportation routes in one 
crucial aspect, however. Whereas the coastal seaports and the 
Mississippi River navigation channel were developed with substantial 
assistance from the federal government, the Seaway was required 
initially to repay the costs of its construction with interest. The 
Seaway, therefore, was hampered in its ability to compete successfully 
from the start. Not only was it built undersized, it was also saddled 
with great debts. Years later when Congress forgave the debts, the 
damage has already been done.
  Throughout my service in the Congress, I have tried to help the Great 
Lakes-Seaway system better position itself in competition for 
commercial transportation. For more than 4 years, I have been working 
closely with interested parties in the Great Lakes maritime 
transportation community and the infrastructure investment finance 
sector in the United States and Canada to develop a proposal to allow 
the Seaway to reach its full potential, to guarantee the future 
viability of the Seaway, and to continue economic development of the 
Great Lakes region.
  The bill I introduced on the first day of this Congress, the 
Binational Great Lakes-Seaway Enhancement Act of 2001, was developed in 
concert with the Honorable Joe Comuzzi, a close friend of mine and a 
member of the Canadian Parliament whose Thunder Bay, Ontario Riding 
(district) is adjacent to mine. It would establish the foundation, 
create the conditions, and provide the resources to permit the system 
to achieve its full potential. The bill would authorize the creation of 
a binational authority to operate and maintain the Seaway. It would 
also provide for the establishment of a non-federal credit facility to 
offer financial and other assistance to the Seaway and Great Lakes 
maritime communities for transportation-related capital investments.
  Specifically, the legislation would establish a binational 
governmental St. Lawrence Seaway Corporation by combining the existing, 
separate U.S. and Canadian agencies that operate each country's Seaway 
facilities. It would require the Corporation's top management to run 
the Seaway in a business-like manner. It would transfer Seaway 
employees and the operating authority of Seaway assets to the 
Corporation. It would provide significant labor protection for current 
U.S. Seaway employees, whether or not they transfer to the Corporation. 
It would offer incentives for employment and pay based on job 
performance. It would set forth a process for the Corporation to become 
financially sustainable. At the same time, it would provide the United 
States with ample oversight authority over the Corporation.
  Through merger of the two national Seaway agencies into a single 
binational authority, we could eliminate duplication and streamline 
operations. Improved efficiency would reduce government's cost of 
operating the Seaway. Moreover, a unified Seaway agency would reduce 
regulatory burden and help cut the sailing time of ships through the 
system. This latter efficiency improvement would positively affect the 
bottom line of Seaway users. All of these efficiencies would make the 
system a more competitive and viable transportation route for 
international commerce.
  The Great Lakes and the Seaway should be considered as an integrated 
system in maritime transportation. Improvements to the Seaway 
infrastructure alone would not be sufficient to deal with the 
efficiency and competitiveness problems facing the Great Lakes-Seaway 
system. Quite the opposite, improvements to the Seaway could stress the 
capacity of ports on the Great Lakes. A comprehensive approach is 
necessary to address the system's investment needs.
  My legislation would provide for the establishment of a Great Lakes 
Development Bank. It would outline in broad terms the structure of Bank 
membership. To ensure no taxpayer liability, this legislation would 
prohibit the United States and the St. Lawrence Seaway Corporation from 
becoming members of the Bank. It would specify eligible projects for 
financial and other assistance from the Bank. It would define the forms 
of such assistance. It would require recipients of Bank assistance, 
states or provinces in which such recipients are located, contractors 
for projects financed with Bank assistance, and localities in which 
such contractors are located to become Bank members to broaden the 
Bank's membership base. It would establish an initial capitalization 
level for the Bank, and would provide as U.S. contributions $100 
million in direct loan and up to $500 million in loan commitments that 
could be drawn upon to meet the Bank's credit obligations. It would set 
interest on U.S. loans to the Bank at rates equal to the current 
average yield on outstanding Treasury debts of similar maturity plus 
administrative costs to preclude taxpayer subsidy to the Bank. It would 
allow the United States to call loans to the Bank if the Bank is not 
complying with the objectives of this legislation, and would provide 
specific limitations on United States' liability to protect our 
interests.
  Mr. Speaker, my legislation is intended to make the Great Lakes-
Seaway system a more efficient, competitive, and viable transportation 
route. Such a system will enable our manufacturers to bring their goods 
to the world market at reduced cost, making U.S. products more 
competitive in the global economy. This is a sensible bill; it is a 
good-government bill. A similar bill was introduced in the last 
Congress. The Committee on Transportation and Infrastructure has held 
one hearing on that bill. Changes have been made to the proposal to 
reflect suggestions made by witnesses at the hearing. As a result, this 
is an improved bill. We should all support it. I hope Members will join 
me in co-sponsoring this legislation and moving it forward. This bill 
should be enacted this year to help prepare the Great Lakes-Seaway 
system for competition and trade in the 21st century.

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