Congressional Leaders Take Hard Line On Foreign Shipbuilding Subsidies

Congressional leaders are threatening to levy a strong legislative response against foreign governments who practice the use of shipbuilding subsidies, if the Bush Administration does not meet the impending December 14 deadline for reaching a multilateral agreement to end foreign shipbuilding subsidies.

The threat of such legislation is seen as a means of providing the U.S.

with leverage in the ongoing negotiations.

The U.S. has been involved in negotiations with members of the Organization for Economic Cooperation & Development (OECD) and South Korea to curb shipbuilding subsidies since early last year.

On October 13, three leading members of the Senate Finance Committee, Lloyd Bentsen (DTexas), Bob Packwood (R-Ore.), and Majority Leader George Mitchell (D-Maine) wrote U.S Trade Representative Carla Hills and stated that, "if negotiations are not successful by December 14, we could only conclude that further negotiations would be fruitless. . . . We would have to be in a position then to evaluate all other options at our disposal to ensure that continuing unfair trade practices do not further erode the U.S. shipbuilding industry." The U.S. shipbuilding industry contends that it has been unable to compete in the commercial shipbuilding market because of substantial subsidies from foreign governments to their shipyards.

Maritime Reporter Magazine, page 43, Dec 1990

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