Show Y THE VOICE OF BUSINESS Cargo preference law could cost you plenty By Richard L. L Lesher res Pres Chamber of or Commerce of or the United States Slates What does it take to get Common Cause and the US U.S. Chamber of others-on others Commerce-among Commerce the same side of an issue Well in this case it takes a plan to subsidize a few American businesses and union members at al the expense of the vast majority of American consumers consumers consumers con con- sumers and businesses The vehicle for this subsidy is known as the cargo preference bill or HR RR 1036 It was launched launched launched laun laun- ched in early August by a 31 5 vote of the House Merchant Marine Committee with official official official of of- Carter Administration support The bill would require that at least 95 percent of our oil imports be carried on built American-built tankers with American crews The arguments presented in favor of it are that it would create jobs in the shipping industry and improve our national security What's wrong with the idea It ll costs more than twice as much to operate an American- American flag tanker as a foreign nag tanker A big part of the reason is that an average American- American flag seamen earns over a year to which taxpayer taxpayer taxpayer tax tax- payer contributes S generously in government subsidies If American petroleum importers importers importers im im- im- im porters are forc forced d to use high- high cost transportation for nearly 10 percent of our imports then obviously the price of the fuel derived will have to togo togo togo go up But that's not the end of it Under the Carter energy plan domestically produced petroleum would be taxed t to bring its cost up to the level of imported petroleum So the cargo preference act would actually raise the cost of all of our related petroleum-related energy and products Even the General Accounting Office-an Office arm of Congress- Congress estimates this legislation would add million a year to our energy costs Other experts have put the price at well over 1 billion a year And for what The national security argument stands up as well as a two-legged two stool 1 The tankers used to transport transport transport tran tran- sport petroleum commercially are much too loo big for Defense Department use as DOD has pointed out on a number of occasions 2 Foreign Foreign flag tankers which are own d' d or or controlled by US U.S. companies which is a lot of them are still available to the US U.S. in an emergency 3 In case of war warthe warthe warthe the greatest need would not be tankers but rather naval vessels to escort them Worse yet a cargo preference law would actually be a threat to national security It would violate more than 30 ra l trade rade trea treaties ties with other country countries ea and invite retaliation in kind Consider what would happen to our security if for example the members of the OPEC oil cartel bought their own tankers and insisted that all OPEC petroleum be shipped in them Consider what would happen to our farmers if the cargo preference concept were extended extended ex ex- tended to our enormous food exports The cost of our food to the buyer would rise because of the increased cost of transportation transportation transportation tran tran- while the price paid to our farmers would remain the same Buyers would therefore not buy as much as or before buy from someone so else-so the farmer would have havea a smaller market and less in in- come These fears of retaliation are not ex excessively hypothetical According to the Christian Science Monitor the White WhiteHouse WhiteHouse WhiteHouse House has already received a strong note of protest from 11 of our most important trading partners What about the job-creation job argument Somewhere between between between bet bet- 2000 to jobs might be created by this bill either building or opera operating ling ships The Treasury figures the per cost-per- job at about Readers with long memories may recall that cargo preference regulations were one of the biggest sources of friction between America and Britain both before and immediately immediately immediately im im- im- im mediately after the Revolution Britain following the MerA Mercantilist Mercantilist Mer Mer- A economic philosophy of the da insisted that all trade with the mother country and her colonies be carried in British bottoms It didn't work then and it wont won't work now |