MarAd withdraws proposed cargo preference rulemaking

MarAd withdraws proposed cargo preference rulemaking    The U.S. Maritime Administration has withdrawn a proposed rulemaking to amend the cargo preference rules.
   The agency said its reason for the withdrawal is to resolve “several issues” of concern.
   “MarAd is involved in a negotiation process with other agencies in order to resolve these issues,” the agency said in a Federal Register notice published today. “Once discussions and negotiations with other agencies are complete, MarAd will initiate a new rulemaking action.”
   Under the 1954 Cargo Preference Act, government agencies are required to take steps to ensure that at least 50 percent of the gross tonnage of certain government-financed cargoes are shipped on U.S.-flag vessels.
   The 1985 Food Security Act exempted certain agricultural export enhancement programs from cargo preference, but increased the U.S.-flag share of humanitarian food aid programs from 50 percent to 75 percent.
   MarAd proposed the amendments to cargo preference Jan. 28, 1999. The shipping industry and some federal agencies continue to raise questions about the proposed changes. MarAd said it must still consider if it should:
   * Clarify certain sections of the law to best ensure that the legislatively required percentage of cargo is actually shipped on U.S.-flag vessels.
   * Change the 'Vessel Priority Rule.'
   * Change the basis for compliance measurement.
   * Formally define “liner vessel,” “transshipment,” or “relay.”
   * Require the use of commercial terms for cargo preference transactions.
   * Require the use of commercial practices in the transportation of preference cargoes.
   * Implement other amendments to its regulations.
   MarAd said it would keep the shipping industry’s comments in mind when it drafts a future rulemaking.