COSCO: U.S. CONTROLLED CARRIER ACT DOES NOT APPLY
A senior executive of China Ocean Shipping (Group) Co. said he does not believe the U.S. government should use its controlled carrier law as a commercial weapon against Chinese ocean carriers.
The controlled carrier rules were developed 20 years ago by the United States initially to isolate and regulate the activity of the Soviet bloc’s ocean carriers during the Cold War. The law evolved over time to cover other forms of overseas state-regulated carrier activities.
In today’s shipping market, “the Controlled Carrier Act not only hampers Chinese carriers, but hampers the trade,” said Gao Weijie, executive vice president of Beijing-based COSCO at a press briefing of the International Management and Development Institute in Washington Wednesday. “We feel these Cold War rules should go away.”
In recent years, the FMC has indicated that it’s losing patience with China for alleged failure to change its policies toward non-Chinese ocean carriers and related interests.
The agency also criticized China for the preferential treatment of its state-controlled ocean carriers. They include vessel operators COSCO and China Shipping Container Lines, in addition to Sinotrans, or China National Foreign Trade Transportation (Group) Corp., which controls forwarding, ship agency, vessel management and multimodal operations in China.
Non-Chinese carriers have complained to the FMC about China’s continued restrictions on vessel calls, inland operations, establishment of branch offices and shipping between China and Taiwan. These carriers say restrictions give Chinese carriers preference to lucrative export cargoes.
Gao said China has come a long way to opening its doors to foreign trade and competition and would move faster toward a market-driven economy now that the country has entered the World Trade Organization. In addition, China has recently issued new international maritime rules that closely follow maritime laws in the United States and European Union.
Gao said the U.S. government’s continued use of the Controlled Carrier Act against Chinese ocean carriers would only hinder improved maritime relations between China and the United States.