FEDERAL MARITIME COMMISSION

FMC RESPONDS TO PROGRESS IN RESOLVING
JAPANESE PORT DISPUTE

NR 97-19

Washington, D.C. 20573

FOR RELEASE OCTOBER 17, 1997

Based on a reported breakthrough in U.S.-Japan shipping talks, and in response to a request from the Department of Transportation and U.S. shipping lines, the Federal Maritime Commission today postponed its plans to have Japanese-flag liner vessels detained in U.S. ports. The planned vessel detentions were announced yesterday, after three Japanese shipping companies missed a deadline to pay $4 million sanctions assessed in connection with a long-running dispute over unfavorable Japanese port practices.

Chairman Harold J. Creel, Jr. stated: "I am very much encouraged by the progress that has been made today. I hope that this breakthrough represents a major step towards reform of what have been deeply troublesome port conditions for U.S. carriers and U.S. commerce. I commend the Japanese and U.S. negotiating teams for their dedication to reaching a resolution of this difficult issue."

The Commission received a letter from Acting Maritime Administrator John E. Graykowski, advising that "the Departments of State and Transportation have realized a substantial and substantive breakthrough with the Government of Japan in negotiations on the issue of anticompetitive port practices in Japan."

In his letter, Mr. Graykowski explained that they had received a Government-to-Government commitment to achieve a "streamlined and reformed prior consultation system," a "framework for establishing an alternative system of prior consultation," and the expeditious approval of licenses for foreign companies seeking to operate port businesses in Japan. These issues have been central to the Commission's concerns over port practices in FMC Docket No. 96-20. The Government of Japan also reportedly pledged to use its full authorities to stand behind these reforms. As Mr. Graykowski also noted, payment of the September fees is integral to the Commission's acceptance of any final resolution. He indicated that, while the negotiations are not yet complete, he is confident that this breakthrough portends an imminent and comprehensive solution to the long-running dispute over port practices.

In a request that the FMC delay action, American President Lines and Sea-Land Service, Inc., the two largest U.S. shipping lines, stated that they are "encouraged" by the "significant progress made today."

U.S.-Japan consultations are expected to continue this weekend. The Commission voted to reconvene Monday, October 20, 1997, to reassess this situation.

Documents from Docket No. 96-20, as well as Commission decisions in other recent proceedings, are available online in the Commission's electronic reading room. To access these materials, first go to the Commission's home page (www.fmc.gov), choose "Public Information Available from FMC," select "Electronic Reading Room," then pick the type of document you wish to view.