Question. During discussion with your counsel, Mr. Gadbaw, I posed the example of foreigners dumping ships from the European Closed Conferences into the open U.S. trades, and asked if a remedy exists under present law to address this situation. Counsel asked for time to review the question, and I would request that he conduct such review, provide an answer to you for inclusion in your response to this letter, and be prepared to expound upon it during our hearing.

Answer. Under Section 301, the President is authorized to respond to any act, policy or practice of a foreign country or instrumentality which is inconsistent with an international trade agreement or otherwise unjustifiable, unreasonable or discriminatory and burdens or restricts U.S. commerce. If the President determines that action is appropriate, he can take a broad range of measures including import restrictions or fees on services of the foreign country or instrumentality.

Without a concrete case to consider it is not possible to judge whether “dumping ships from the European Closed Conference into the open U.S. trades" is a practice which meets the criteria of Section 301. There are no clear precedents for this type of case and a thorough interagency review in the context of a particular set of circumstances would have to be conducted. Such a review would have to consider, for example, whether there is a practice of a foreign country or instrumentality involved, whether the practice violates any existing international agreements and whether the practice is unreasonable or discriminatory.

SUPPLEMENTAL STATEMENT OF RICHARD W. HEIMLICH

Mr. Chairman and Members: I am pleased to appear before this Subcommittee today to provide additional information requested by the Subcommittee when I met with you on October 25, 1979, regarding title V of H.R. 4769.

The Committee asked that estimates be supplied on resources that the USTR will have to deal with services issues once Reorganization Plan No. 3 takes effect and on resources that could be needed should the USTR be assigned the responsibilities proposed in title V.

On November 2, 1979, we transmitted to the Congress a supplemental request for fiscal year 1980 that would bring the USTR staff level to 116 persons. Should the Congress act favorably on this request, we would assign 3 of our 88 professional positions to work on services issues, including one individual to deal with maritime and aviation matters. This services unit is large enough to enable the USTR to follow through on its work in the OECD (which I described in my earlier statement) and also to become actively involved in services trade issues under consideration in the Administration and the Congress. Should services trade issues for which the USTR has primary responsibility (e.g. Section 301 complaints) require it, additional resources would be committed.

If title V were enacted, a substantial expansion of USTR staff levels would be needed. While the language of title V is subject to some interpretation, our estimate is that an additional 60-70 persons would be needed-a 50 percent increase in USTR staff levels requested for fiscal year 1980. This would clearly make maritime issues a central function of the USTR and would create a significant imbalance in terms of the USTR trade responsibilities. By contrast we expect to assign only one person each to coordinate export policy and energy trade policy and four to five persons to international commodity agreements-all significant new USTR trade responsibilities.

Not only would the amount of resources needed to implement title V unbalance the USTR functions away from its primary trade responsibilities, it would also create a precedent for adding other functions such as aviation or fisheries policy that would significantly alter the basic USTR mission.

[Whereupon, at 4:20 p.m., the subcommittee recessed at the call of the Chair.]

OMNIBUS MARITIME BILL

FRIDAY, NOVEMBER 9, 1979

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON MERCHANT MARINE,

COMMITTEE ON MERCHANT MARINE AND FISHERIES,

New York, N.Y.

The subcommittee met, pursuant to notice, at 9:35 a.m., in room 305, third floor, Federal Building, 26 Federal Plaza, Foley Square, Hon. John M. Murphy (chairman) presiding.

Present: Representatives Murphy, McCloskey.

Staff present: Carl Perian, Larry O'Brien, Gerry Seifert, Jack Sands, Susan Baffa, Liz Coker, and Taddy McAllister.

Mr. MURPHY. Good morning. The subcommittee will please come to order.

This morning, the subcommittee on Merchant Marine continues. its consideration of H.R. 4769, a bill to revitalize maritime policy, reorganize certain Government agencies, and reform regulation of maritime affairs in the United States.

The subcommittee has held 15 days of hearings in Washington on this legislation which is the first attempt, by any Congress, to comprehensively address the myriad problems and needs our Nation faces in determining its role as a maritime power. The United States from its birth, has relied on its merchant fleet to grow from a fledgling agrarian nation to our current position as the world's principal economic power. Early in our history it became clear that the bounty of our land and people produced would not inure to the benefit of the United States, unless our foreign trade was carried by vessels whose operators had a vested interest in the economic welfare of this country. Our country grew and prospered and is where it is today, in great part, because of our strong maritime position.

As the world grew smaller, and as the world's economics became more complex, it became necessary to secure our position by the enactment and implementation of Government programs and policies. As is frequently the case, Government intervention was reactive-addressing problems after they surfaced. The result is that we now have a series of laws which are at odds with one another, a maritime policy which has no focus, and a multitude of Government agencies and departments whose parochial views on maritime matters serve only to render our maritime policy a nullity. With trade more than ever at the root of our economic dilemma, the means to move our trade becomes vital. The Shipping Act of 1916, the Merchant Marine Acts of 1936 and 1970, and their many amendments do not adequately serve our merchant marine, our

shipbuilding industry, our national security interests or our status as a trading nation.

Before our fleet, which carries but 5 percent of our foreign commerce, is completely destroyed, we must address, comprehensively, the issues which are at the heart of our Nation's economic future. The omnibus maritime bill is the vehicle we have chosen to illuminate the issues and propose solutions. The hearing process provides the committee and the Congress with the opportunity to test proposals against public reaction. The hearing record thus far has raised questions concerning particulars in this bill, and we expect the hearings here today to further clarify the role which government should play in this most vital area of economic activity. It is no accident that we come to New York for the first field hearing on this landmark legislation. For close to four centuries, the waters now called the Port of New York have served as the entryway to the New World. New York is the world's leading port. And, it is in New York that we can see, in bold relief, the evidence that our maritime policy is in need of renovation. More and more, the flags flying from the sterns of vessels entering this fine port. are flags of foreign nations. And, with the erosion of the U.S.-flag fleet has come the erosion of the commerical shipbuilding industry, an industry whose demise would pose a definite threat to our naval preparedness program.

I am not talking about a future downturn, I am talking about now. The termination of 1,300 shipbuilding jobs in Brooklyn by the Seatrain Shipbuilding Corp. is not an economist's prediction, it is a reality.

We might observe that the present slump in the general economy was presaged by the difficulties faced in the maritime sectordifficulties which we could well have avoided if we had a sound coherent maritime policy.

This bill, H.R. 4769, addresses the full range of policy questions which must be answered, now, if we are to continue as an economic power and as a leader of the free world. The omnibus maritime bill proposes a regulatory scheme which imposes the least government intervention in transactions which are purely commercial, and does so in harmony with international practice. The omnibus bill proposes a promotional program which is designed to provide maximum flexibility to shipbuilder and ship operator. Above all, the omnibus maritime bill has, running through it, the constant theme that U.S.-flag vessels must carry a fair share of our foreign_commerce, that maritime policy be coordinated at the highest levels and that our importers, exporters, and consumers be provied with a maritime transportation component which truly serves our national trade.

We can't sit by and allow this country to continue its economic decline. Maritime strength is at the very core of our trade needs, and this legislative initiative provides a signal opportunity to place our Nation, once again, on its proper course.

To paraphrase Santayana, those who do not study and learn from maritime history are doomed to repeat its mistakes, as we repeated them in the past.

We welcome to the committee witnesses whose expertise and concern are essential to full and fair consideration of this legisla

tion. The concerns of New York's port interests are inseparable from the concerns the entire Nation has in addressing maritime policy.

And we're privileged to have as our first witness today Carmine Ragucci, president of the Howland Hook Marine Terminal Corp. Carmine, welcome to the committee.

STATEMENT OF CARMINE RAGUCCI, PRESIDENT, HOWLAND HOOK MARINE TERMINAL CORP., STATEN ISLAND, N.Y. Mr. RAGUCCI. Thank you.

Good morning, Mr. Chairman and members of the committee. I am honored to appear before this committee and to contribute in my own way to what we consider the single most important subject concerning the maritime industry today, and that is the revitalization of our Nation's maritime policy. The maritime industry in the Port of New York is a vital piece of this city's economy. As you've indicated, I'm president of the Howland Hook Maritime Terminal Corp. Howland Hook is located on Staten Island, New York City, and is presently the only contrainerport in the city of New York. Howland Hook is a terminal operating and stevedoring company and present serves two of the largest American-flag ocean carriers, Farrell Lines, and United States Lines. A stevedoring and terminal operating company is a service organization that contracts to do the physical labor involved with the loading and unloading of vessels. As such, our impact to the economy of the city and the Port of New York is significant. We employ between 550 and 800 people on a daily basis with a total gross payroll of around $30 million a year.

While it is true there has been over the last two decades a significant erosion of the stevedoring business in the Port of New York and there are many explanations for this erosion, however, the stevedoring industry's continued survival and any hope for its future growth does depend a great deal on a healthy merchant marine, and more selfishly, Howland Hook Marine Terminal whose two major principals are American-flag carriers, would very significantly be affected in a positive manner.

It is conceivable that with this type of legislation that over the next 10 years that we could double the employment and the contribution to the city of New York.

H.R. 4769 and its badly needed objectives we feel ultimately would provide this growth.

In conclusion, as terminal operators, the act does provide a certain amount of relief which we can directly benefit. The reduction of FMC involvement in items which are ancilliary to the terminal operators business and its overall relaxation of regulatory involvement in that area is a major benefit.

Finally, with the idea behind the act that this type of change does create a more healthy environment for competition and free enterprise in our shore-based operations, we support and encourage the passage of H.R. 4769.

Mr. MURPHY. Thank you, Mr. Ragucci. What present FMC jurisdictions are there as far as the operation of a terminal operator such as you at Howland Hook are?