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Ports will stay open to Japanese ships

Published Oct. 2, 2005

The Federal Maritime Commission has reached a compromise with Japanese shipping lines that appears to end a dispute that had threatened to close U.S. ports to Japanese ships.

Under the agreement reached Monday, the Japanese carriers paid $1.5-million of a $4-million fine the commission imposed after the Japanese government refused to reform port practices.

At issue was the stranglehold the Japan Harbor Transportation Association maintains over port operations. U.S. officials said inefficiencies in port operations had substantially increased the costs to American carriers of their export business in Japan.

Japanese organized crime is widely thought to have substantial control over the country's ports.

Earlier this month, the commission issued an order to deny Japanese carriers access to U.S. ports, triggering concern about possible shortages of cameras, stereos and computers just as the Christmas shopping season was about to get under way.

The order was never implemented because U.S. and Japanese officials were able to negotiate a breakthrough in talks on port reform.

Until Monday, however, there was no agreement on whether the fines imposed by the commission would remain in effect.

Kenneth Quinn, counsel for the Japanese carriers, said his clients think the commission's original threat was "unfair, unwise and illegal." He said they agreed reluctantly to make a $1.5-million payment in the interests of removing a further threat of sanctions.

"We are pleased to put this unfortunate chapter in U.S.-Japan trade relations behind us so that we can get on with our business without interference," he said.

The commission issued a statement that it will no longer be necessary for it to take action against Japanese carriers or vessels to collect the fines.

"The resulting agreement will bring about changes that will benefit the ocean-borne trade of both countries. Once implemented, the agreement will reform practices in Japanese ports to the benefit of importers, exporters, ports, workers and consumers in Japan."

The State Department and the Department of Transportation expressed similar sentiments and also said they expect the Japanese government to continue to work with the United States to ensure that the reforms are implemented.

"Open trade begins with open ports," the two agencies said in a statement. "When ratified and implemented, this agreement will make Japan's ports more open and will facilitate continued growth in our $180-billion-a-year trade and further strengthen the bonds between the two largest economies in the world."