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Japan's ships cleared for U.S. ports


Both sides confident in port agreement

October 17, 1997
Web posted at: 10:19 p.m. EDT (0219 GMT)

WASHINGTON (CNN) -- Japanese ships can sail into U.S. ports as usual Saturday, after officials announced a breakthrough in negotiations to head off a brewing trade war between the world's two largest economies.

With news of the agreement, the Federal Maritime Commission announced Friday evening that it would not ask the Coast Guard to block Japanese access to U.S. ports. On Thursday, the commission had voted to ban Japanese use of U.S. ports beginning at midnight Friday.

While a complete agreement had not been finalized, Japanese and American officials agreed in principle to give U.S. ships the same degree of access to Japan's ports that Japanese ships have in the United States. It was that dispute over access that led to the commission's port ban.

"While an agreement is not yet in hand, it is clearly within reach," said U.S. Under Secretary of State Stuart Eizenstat, announcing the breakthrough Friday afternoon. "(We) have instructed our experts to conclude the remaining details of an agreement, and we hope and expect that that can be done very shortly."


"I'm confident that our experts will be able to resolve these remaining details," said Kunihike Saito, Japan's ambassador to the United States.

Because of the progress in negotiations, the State Department recommended that the maritime commission, a regulatory agency independent from the executive branch of the government, drop its Thursday order prohibiting access to U.S. ports by Japanese ships and impounding Japanese ships already docked in the United States.

The commission agreed to hold off on the ban until at least Monday.

"I am very much encouraged by the progress that has been made today," commission chairman Harold Creel said in a statement. "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."

The maritime commission voted Thursday to impose the ban on almost all Japanese ships after three Japanese shipping companies failed to meet a deadline for paying $4 million in punitive levies that had been imposed starting in September.

Those sanctions, $100,000 per port call, were imposed in retaliation for what the United States says are unfair practices at Japanese ports that restrict American shipping.

Creel said while the commission agreed to hold off until Monday, at which time it will reassess developments, payment of those fines would be necessary for permanent lifting of the order.


That could be a sticking point. An attorney for Japan's three largest shipping lines said Friday that the companies had no plans to pay $4 million, despite some reports to the contrary.

"We have no intention of paying the fines at this time," said Ken Quinn, an attorney for the shippers. "We are hoping cooler heads will prevail and the situation will be settled."

The three companies -- Mitsui O.S.K. Lines, Ltd., Kawasaki Kisen Kaisha Ltd. and Nippon Yusen K.K. -- typically carry containers of boxes that can be loaded onto railroad cars. Oil tankers were not included in the port ban.

A ban would have affected billions of dollars in products hauled back and forth between the world's two biggest economies. Japan called the port ban decision illegal and said it would monitor developments before deciding whether to retaliate.

The United States argues that Japanese ports discriminate against non-Japanese ships and push up costs. The complaint is that Japan requires all shippers to receive prior approval for even the most minor operational changes in handling cargo at its ports.

U.S. negotiators were demanding that these restrictions be lifted so American shippers would have the same privileges at Japanese ports that Japanese lines enjoy in the United States.

The Japanese government says the dispute is a private-sector matter, but admits that its port practices are in need of reform and that Japanese shippers and exporters are unhappy with the current setup.

The shipping firms argue that the commission's quarrel is not with them but with the Japan Harbor Transport Association, which controls cargo handling.

The port operations are widely thought to be influenced by "yakuza" gangsters.

Japanese Transport Minister Takao Fujii denied that the ministry had failed to take stronger action due to fear of the yakuza. "We are not afraid, and there aren't such elements," he said.

According to Eizenstat, the proposed agreement would set up a separate system where U.S. shipping companies will not have to go through the "monopolized system" run by the JHTA in order to dock in Japan.

In addition, said Eizenstat, the Japanese government would work to "facilitate" that alternate system and the streamlining of license applications for U.S. carriers.

Tokyo Bureau Chief John Lewis and Reuters contributed to this report.


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