Give Shipbuilding a Level Playing FieldYour July 3...


July 25, 1992

Give Shipbuilding a Level Playing Field

Your July 3 editorial, "Protecting Steel," correctly applauds Bethlehem Steel's Sparrows Point steel mill. Today, Sparrows Point mill employs some 6,000 steel workers. In the absence of protection afforded by the present and prior administrations, this employment figure would be zero.

Today at Sparrows Point's shipyard, fewer than 600 workers remain from a work force which once approached 4,000.

The shipyard is not unique. Since 1981, one-third of U.S. shipbuilding capacity has suffered forced closure and over 120,000 jobs have been lost. An additional 180,000 job terminations are expected in the next half dozen years.

These closings and job losses come as a result of the effective exclusion of U.S. shipyards from the world market because of competition from government-subsidized shipbuilding programs in Europe and the Far East.

In 1989, acting in response to a Section 301 trade complaint filed the Shipbuilders Council of America, which the council agreed to withdraw, the office of the U.S. Trade Representative initiated talks to eliminate these subsidies.

In April 1991, because of the lack of progress in these talks, Rep. Sam Gibbons introduced H.R. 2056. The Gibbons bill does not provide a subsidy to U.S. shipyards. Rather, it attempts to level the playing field by requiring a charge or refund of future shipbuilding subsidies on tonnage calling at United States ports. Once a country signs an agreement to end subsidies, this requirement ends.

In April of this year, to assist in the defeat of H.R. 2056, the administration announced that White House advisers would recommend a veto. Rep. Helen Bentley is a co-sponsor of H.R. 2056, and introduced similar legislation in 1991. The House passed H.R. 2056 by a vote of 339-78. The administration has blocked a similar Senate bill.

On June 17, Secretary of Transportation Andrew Card appeared before the Senate Committee on Commerce, Science and Transportation to present the administration's new maritime proposals. On July 8, the House Committee on Merchant Marine and Fisheries held hearings at which Secretary Card re-stated and expanded upon his Senate testimony.

Secretary Card characterized a new contingency retainer program as the "centerpiece" of the administration's proposals. Under this program, U.S. flag carriers will receive an initial $2.5 million annually for each vessel in operation.

The program falls outside existing law so that carriers receiving payments will not be obligated to purchase U.S.-built vessels, so long as the vessels acquired have not been built with "excessive" foreign government subsidies.

Responding to congressional questions, Secretary Card acknowledged that this program could be viewed as a "subsidy." However, the secretary maintained that the purchase of foreign-built vessels with program funds would not be a U.S. government subsidy for foreign shipyards; and, in any event, the profit enhancement to U.S. flag carriers and the protection of the U.S. seafaring jobs provided justification.

The secretary confirmed the administration's continued opposition to H.R. 2056 and its unwillingness to incorporate any similar initiative in the administration's legislative package. Shipyards are major private-sector employers. Newport News Shipbuilding is the largest employer in Virginia. The same is true for the Avondale yard in Louisiana, Bath Iron Works in Maine and Litton Industries in Mississippi. General Dynamics' shipyard at Quincy was Massachusetts' largest employer until it closed in 1987 after more than 100 years of operation.

Shipyards hire and train the unskilled. They provide entry-level employment and produce welders, pipe fitters and electricians, people who have learned productive transferable trades.

The Sparrows Point shipyard could still replicate what has been achieved at the Sparrows Point steel facility, but this can only occur if the administration agrees to protect U.S. shipyards against foreign government subsidized competition. A multilateral solution is desirable, but success in the current talks appears unlikely.

The administration is proposing a maritime program to carry this nation "into the 21st century." It should afford shipbuilding a "level playing field" in the legislation which it will present to Congress.

$ H. Clayton Cook, Jr.

Washington Recently a teacher, carrying a beautiful bouquet of flowers, peeked into my office and asked if I could spare him five minutes. I said yes, although I knew instinctively the flowers did not mean good news.

As we sat down at the conference table, the teacher trembled and appeared uncharacteristically uncomfortable. Groping for the right words to begin, he handed me the flowers and a card. "These are for you, Mrs. Wighton, to say thank you and to let you know that this is the hardest decision I've ever had to make in my life." In his other hand he clutched a brown envelope containing an employment contract with the Baltimore County public schools.

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