Japan trade group in control Conflict: Analysts trace U.S.-Japan trade tensions to the dictates of the Japan Harbor Transportation Association.

October 18, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

The argument that pushed the United States and Japan to the edge of a trade war yesterday started on the busy docks of Tokyo, Yokohama, Shimizu and Kobe.

For years, foreign shipping lines have complained that those Japanese ports and others impress the highest costs and the most restrictive work practices in the developed world.

Even the smallest change in ship schedules or local transportation deals requires approval of a powerful maritime trade group, the Japan Harbor Transportation Association. Shipping companies aren't allowed to choose their own stevedores, the companies that load and unload the vessels.

Stevedoring rates are dictated. Ships sit idle every Sunday, when dock work is prohibited. "Let's say you wanted to bring your ship in on a Thursday evening instead of a Friday morning. You have to get approval from the JHTA," said Gil Roeder, a spokesman for American President Lines, a big, U.S.-based line. "Japan is the only modern trading nation in the world that has a work ban on Sundays. That's just not practical in the modern world."

The result isn't just headaches for the shipping lines -- including the Japanese ones -- that want to be more flexible.

Waterfront sclerosis substantially drives up the price of offshore goods sold in Japan, trade specialists say.

Shipping lines are "not allowed to run their own subsidiaries over there," said Mike Mason, spokesman for the American Maritime Congress, a trade group of oceangoing U.S. carriers. "It's the highest cost anywhere that U.S. carriers have to deal with."

That makes foreign goods less competitive among Japanese customers and helps maintain Japan's huge trade surplus with the United States and other commercial partners.

"It remains a very difficult market," said James Hughes, director of Maryland's office of international trade. "Japan is notorious for having layer upon layer" of regulation, "which really adds to the cost of selling in Japan."

The Japanese government has defended the port system and the JHTA, which operates on the Ministry of Transportation's sufferance, even though it's a private group. The setup ensures labor cooperation and prevents crippling strikes, government officials say.

Shipping companies say that the JHTA has been seaweed in their propellers since the 1960s, but the agency has gotten more complaints in recent years as cargo carriers' profits have come under pressure.

Shipping capacity has boomed in recent years, as huge new vessels have been floated, and new carrier lines -- many of them government-subsidized -- have gained market share. To cut costs and puff life into profits, lines increasingly have tried to share assets and otherwise cooperate.

"Lines are marketing ships of other carriers -- space guaranteed on other ships," said American President's Roeder. "Carriers not only share ships, but they also share terminal spaces and containers to bring fixed costs down."

Such arrangements are nearly impossible in Japanese ports, industry officials said, and the need for them has boosted pressure on JHTA, which represents terminal operators, labor unions and stevedores.

The Federal Maritime Commission voted this year to fine three Japanese shipping companies for what it called the intransigence of the JHTA and the Japanese government. Thursday's vote to ban most Japanese cargo ships from U.S. ports came after the companies refused to pay the fines, following what U.S. officials say were instructions from Japan's government.

The commission's vote caught many by surprise, congressional sources said. An independent body apart from the normal channels of business and diplomatic commerce, the commission charged with regulating ocean trade the same way the Interstate Commerce Commission once supervised truck activity.

"They're like a cop," said Mason. "They have nothing to negotiate."

Congress abolished the ICC two years ago, and the House of Representatives passed a shipping deregulation bill that did the same to the FMC. The bill was not taken up in the Senate.

Pub Date: 10/18/97

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