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Ag groups ask USTR for exemption from shipping fees

Several ag groups are seeking an exemption for ag products from proposed fees on Chinese vessels as the U.S. tries to level the playing field for shipbuilders.

“We could potentially lose markets (if fees go into effect),” says Richard Gupton with the Ag Retailers Association. “The costs could be passed on to farmers in the ag sector from these shipping companies they’re targeting. We think there should be a more balanced, long-term approach.”

Gupton tells Brownfield a waiver shouldn’t be too difficult from a logistics stand-point.  

The ARA, National Corn Growers Association, Renewable Fuels Association and others made the request in a letter to the Office of the U.S. Trade Representative. The groups also asked for graduated sourcing requirements for U.S. built and flagged vessels until U.S. ship production can meet the requirements to keep ag competitive globally.

RFA CEO Geoff Cooper says U.S. ethanol exports would be affected by the fees and NCGA President Kenny Hartman says corn would be, too. Hartman says the exemptions for bulk grain shipments would allow the U.S. to address problems caused by the Chinese government without hurting American farmers.

A proposal the Trump administration under Section 301 would impose a fine of up to $1.5 million for each port call by a ship that was built in China or just owned by a Chinese company.  NCGA says the restrictions address a report showing China has given shipbuilding and maritime industry an unfair advantage through financial support, barriers for foreign firms and more.

The USTR held a public hearing this week on the proposed actions on Section 301 investigation on China’s targeting of maritime, logistics and shipbuilding sectors. Gupton says it will take some time for USTR to review the feedback and in the short-term, he says Congress could take a different approach.

“We’ve proposed getting rid of an outdated law called the Jones Act,” says Gupton. “Where you have to be a U.S. built, U.S. owned and crewed vessel to go from U.S. port to U.S. port. They don’t have many of those vessels and it makes it expensive to try and find those ships to move them port to port. That’s another way to solve some of these issues on the shipping side.”

The groups say there is support for the President’s effort to rebuild the global shipping industry in the U.S., but there are concerns the current fees and timelines can’t be met without significant economic harm to America’s farmers and ranchers.