Coalition: Keep Maritime Out of NAFTA


August 2017


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A major United States industry group recently voiced its strong opinion that any updates to the North American Free Trade Agreement (NAFTA) should continue to exclude maritime matters.


The United States Maritime Coalition (USMC) (whose member organizations include the SIU) in early June submitted comments to the Office of the United States Trade Representative (USTR), in response to a request in the Federal Register. Specifically, USMC Chairman James L. Henry wrote to Edward Gresser, chair of the Trade Policy Staff Committee.


The coalition represents U.S. maritime interests that operate, crew, and build American-flag ships for the domestic and international trades.


In the letter, Henry noted, “The United States is not currently a participant in any international agreements involving maritime services, including NAFTA…. We strongly urge you to continue to exclude maritime matters from NAFTA.”


He then pointed out that the American maritime industry “provides significant economic, homeland, and national security benefits to the United States. Importantly, as has been noted by the U.S. Government Accountability Office, an independent, nonpartisan agency that works for Congress, ‘The military strategy of the United States relies on the use of commercial U.S.-flag ships and crews and the availability of a shipyard industrial base to support national defense needs.’”


Henry also reminded Gresser that the industry for decades has been consistent in opposing possible coverage of maritime issues under multilateral, regional, and bilateral trade agreements. “The industry – carriers, dredgers, shipyards, and seafarers – have had a simple message: It strongly opposes the inclusion of maritime matters in trade agreements because it is detrimental to the United States’ national defense and economic interests,” he stated. “Recognizing these negative impacts to the United States, the USTR and every administration worked to ensure maritime matters were not included in the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS), or any regional or bilateral trade agreements to which the U.S. is a party.”


For example, the GATT permanently grandfathers the U.S.-build requirement of America’s cabotage laws; the GATS effectively excludes maritime transportation services; and NAFTA expressly “reserves the right to adopt or maintain any measure relating to the provision of maritime transportation services and the operation of U.S.-flagged vessels” and comprehensively excludes United States maritime transportation goods and services.


Henry added, “By taking these steps in NAFTA and all subsequent trade agreements, the United States did not in any way restrain or limit our ability to maintain and promote a strong U.S.-flag fleet and maritime industry in domestic and foreign commerce or to ensure a shipbuilding industrial base to meet national defense needs. The United States also retained its effective unilateral ability to open up foreign markets in maritime and maritime-related services.”


The coalition underscored ways the U.S. maritime industry significantly contributes to economic, national, and homeland security. Nationally, the domestic maritime industry supports nearly 500,000 jobs, a gross economic output of over $92.5 billion annually, and worker incomes of $29 billion annually with a $10 billion tax impact. The U.S. shipbuilding and repairing industry contributes almost 400,000 jobs, $25 billion in individual income, and $37 billion in GDP each year.


“We do not believe that anything has changed here at home or abroad that would alter our view or change the U.S. Government’s position with respect to the inclusion of maritime matters in NAFTA or any other trade agreement,” Henry said. “Moreover, nothing has been presented that would indicate why or how the inclusion of maritime in a modernized NAFTA would benefit our American maritime industry and the United States’ national and economic security…. There is no justification for any aspect of the domestic maritime transportation services to be the subject of discussion or covered by NAFTA renegotiations; to do so could mean the end of U.S. ownership and crewing of vessels sailing our waters, which is why maritime matters were excluded from NAFTA. Moreover, the GATT permanently grandfathered the U.S. build requirement of our cabotage laws governing cargo, passengers, dredging, towing, and fishing, which NAFTA explicitly recognizes. That grandfather was fought and ‘paid for’ during those negotiations. There is no reason to open domestic maritime services or the grandfather for discussion in NAFTA renegotiations, or in any other trade context for that matter.”


International shipping, auxiliary services, and access to and use of port facilities also must not be included in a modernized NAFTA or any other trade agreement, he added, also for reasons of national, economic and homeland security.


“Our laws and regulations are clear and transparent,” Henry concluded on behalf of the coalition. “Our international trades are liberalized, as evidenced by the fact that roughly 98 percent of international trade with the United States occurs on foreign-flag vessels. NAFTA’s provisions excluding maritime matters, including the five cabotage laws — cargo, passengers, dredging, towing, and fishing — should be preserved as we do not believe it is desirable, appropriate, or necessary to include maritime matters in a modernized NAFTA or any other trade agreement context.”



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