During my Administration I have sought to ensure that the U.S. maritime
industry will not have to function at an unfair competitive disadvantage in
the international market. As I indicated in my maritime policy statement to
the Congress in July, 1979, the American merchant marine is vital to our
Nation's welfare, and Federal actions should promote rather than harm it.
In pursuit of this objective, I signed into law the Controlled Carrier Act
of 1978, authorizing the Federal Maritime Commission to regulate certain
rate cutting practices of some state-controlled carriers, and recently
signed a bilateral maritime agreement with the People's Republic of China
that will expand the access of American ships to 20 specified Chinese
ports, and set aside for American-flag ships a substantial share (at least
one-third) of the cargo between our countries. This agreement should
officially foster expanded U.S. and Chinese shipping services linking the
two countries, and will provide further momentum to the growth of
Sino-American trade.
There is also a need to modernize and expand the dry bulk segment of our
fleet. Our heavy dependence on foreign carriage of U.S.-bulk cargoes
deprives the U.S. economy of seafaring and shipbuilding jobs, adds to the
balance-of-payments deficit, deprives the Government of substantial tax
revenues, and leaves the United States dependent on foreign-flag shipping
for a continued supply of raw materials to support the civil economy and
war production in time of war.
I therefore sent to the Congress proposed legislation to strengthen this
woefully weak segment of the U.S.-flag fleet by removing certain
disincentives to U.S. construction of dry bulkers and their operation under
U.S. registry. Enactment of this proposed legislation would establish the
basis for accelerating the rebuilding of the U.S.-flag dry bulk fleet
toward a level commensurate with the position of the United States as the
world's leading bulk trading country.
During the past year the Administration has stated its support for
legislation that would provide specific Federal assistance for the
installation of fuel-efficient engines in existing American ships, and
would strengthen this country's shipbuilding mobilization base.
Strengthening the fleet is important, but we must also maintain our
shipbuilding base for future ship construction.
Provisions in existing laws calling for substantial or exclusive use of
American-flag vessels to carry cargoes generated by the Government must be
vigorously pursued.
I have therefore supported requirements that 50 percent of oil purchased
for the strategic petroleum reserve be transported in U.S.-flag vessels,
that the Cargo Preference Act be applied to materials furnished for the
U.S. assisted construction of air bases in Israel, and to cargoes
transported pursuant to the Chrysler Corporation Loan Guarantee Act. In
addition, the deep Seabed Hard Mineral Resources Act requires that at least
one ore carrier per mine site be a U.S.-flag vessel.
Much has been done, and much remains to be done. The FY 1982 budget
includes a $107 million authorization for Construction Differential Subsidy
("CDS") funds which, added to the unobligated CDS balance of $100 million
from 1980, and the recently enacted $135 million 1981 authorization, will
provide an average of $171 million in CDS funds in 1981 and 1982.