FMC LOSING PATIENCE WITH CHINA’s SHIPPING CONTROLS

FMC LOSING PATIENCE WITH CHINAÆS SHIPPING CONTROLS    After several years of unsuccessful attempts to between the U.S. and Chinese governments to change China’s policy toward non-Chinese ocean carriers, the U.S. Federal Maritime Commission has indicated that it’s starting to lose patience.
   The agency held a closed-door meeting in Washington Wednesday to review the progress that China has made to end preferential treatment toward its state-controlled ocean carriers, China Ocean Shipping (Group) Co. and China Shipping Container Lines, in addition to Sinotrans (China National Foreign Trade Transportation (Group) Corp.), which controls forwarding, ship agency, vessel management and multimodal operations in China.
   Non-Chinese carriers have complained to the FMC about China’s continued restrictions on vessel calls, inland operations, establishment of branch offices, and shipping between China and Taiwan. These carriers say the restrictions give Chinese carriers the upper-hand commercially.
   “The issue has been before us for more than three years and I’m beginning to lose patience,” said FMC Commissioner Del Won. “I think three years is more than sufficient time for the diplomatic avenue to have either resolved the issues or to have made substantial progress in the resolution of the issues. It was my preference that the commission be more aggressive in resolving the matter.”
   “I share the frustration,” said Hal Creel, chairman of the FMC. “I’d rather not go forward (with sanctions) at this time, but I may be willing to go forward in the future, if the situation continues.”
   The FMC has broad powers under Section 19 of the Merchant Marine Act of 1920, to retaliate against discriminatory practices by other countries. It’s most aggressive use of those powers was four years ago, when the commission fined Japanese shipping lines $4 million, then forced a showdown by directing the U.S. Coast Guard to ban the Japanese vessels from entering U.S. ports.
   The comments by these two commissioners suggests that although the FMC stopped short of retaliating against China, it indicates that increasing support within the commission to impose sanctions is building.