U.S. bans all Japanese cargo ships Maritime agency acts as companies refuse to pay $4 million fines

State port chief concerned

Last-minute talks could yield payment, head off sanctions

October 17, 1997|By Suzanne Wooton | Suzanne Wooton,SUN STAFF Sun staff writer Ted Shelsby contributed to this article.

Escalating a simmering trade dispute between the United States and Japan, a federal maritime agency said yesterday it will order the Coast Guard to bar Japanese cargo ships from U.S. ports and the Customs Service to detain Japanese ships already in American ports.

The Federal Maritime Commission acted when three Japanese shipping companies refused to pay an estimated $4 million in fines levied by the United States after negotiators for the two countries failed to reach agreement on American demands for better access to Japanese harbors.

If imposed, the sanctions could have devastating economic consequences, with hundreds of millions of dollars in trade at stake during the approaching Christmas season.

Enforcement of the orders, however, was delayed until this afternoon, to see whether last-minute talks can resolve the immediate dispute over the fines.

"I think the payment will be made," said one federal maritime official familiar with the talks.

"There's too much at stake here."

But the commission's decision was a rare political maneuver in the battle between the two countries.

The action by the commission, which regulates the U.S. shipping industry, was welcomed by many in the mari-time industry and elsewhere.

"It's time we took some steps against them," said former Rep. Helen Delich Bentley, who was chairman of the commission from 1969 to 1975.

"They're restricting American ships' free access to Japanese ports, and they have been for years."

Japan ships more than $59 billion a year in goods to the United States annually.

Japanese shipping companies also would be blocked from moving cargo from the United States to Japan.

President Clinton has the authority to overturn the commission's vote on national security grounds, but White House spokesman Mike McCurry declined yesterday to predict whether the president would intervene.

From a practical standpoint, the sanctions against Japan could be nearly impossible to impose because shipping lines worldwide consolidate cargo and share vessels in vastly complicated rotation schedules.

In effect, Japanese carriers transport non-Japanese lines' cargo and the latter, in turn, carry Japanese carriers' freight.

Any blockage affecting Japanese lines could cause massive disruptions and produce an outcry from other nations.

No Japanese container ships call at the port of Baltimore, though a half-dozen Japanese car carriers sail here each month, with the Pegasus Diamond scheduled to arrive today.

It was not clear whether the sanction would apply to car carriers.

"Our understanding is that the Maritime Commission's action does not apply to car carrier ships," said Charles Powers, a spokesman for the Washington-based Japanese Automobile Manufacturers Association, which represents major Japanese car manufacturers including Toyota, Honda, Mazda, Nissan and Mitsubishi.

Powers said that nearly 70 percent of the 3.4 million Japanese cars sold in the United States last year were made in this country.

Still, Japanese auto manufacturers exported about 1 million vehicles to the United States last year.

Baltimore is the second largest automobile port on the East Coast.

"The implications are very, very far-reaching. It could definitely hurt," said Tay Yoshitani, executive director of the Maryland Port Administration, which oversees the state-owned marine terminals.

"We certainly don't want Japanese ships to be turned away from our ports because they carry a lot of cargo. Across the board, ports have been very concerned about this and want the problem resolved."

American and other foreign shipping lines have long complained that Japan requires all shippers to receive prior approval for even the most minor operational changes in handling cargo at Japanese ports.

Even among Japanese carriers, the Japanese ports are criticized for their inefficiencies.

The maritime commission took its action yesterday on a 4-0 vote.

The sanctions, which amount to $100,000 per vessel, were levied on Japanese cargo ships entering U.S. ports beginning Sept. 4.

The three major Japanese shipping companies involved - Mitsui O.S.K. Lines, Kawasaki Kisen Kaisha and Nippon Yusen Kaisha - had until yesterday to pay the fines.

The commission acted after receiving word from the shipping lines that they did not intend to pay the fines.

A Japanese delegation has been in Washington meeting with federal officials, and talks were continuing last night.

Without some resolution, the ban could take effect as soon as the commission's formal orders are delivered to the Coast Guard and U.S. Customs today.

Pub Date: 10/17/97

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