The US Federal Maritime Commission reached a settlement on Monday with Japanese shipping firms, ending a dispute that had threatened to close US ports to Japanese ships.
Japanese shipping firms agreed to pay $1.5 million to settle the bitter shipping dispute with the commission after the governments of the United States and Japan signed an pact to reform Japanese port practices.
Were very pleased, commission chairman Harold Creel told reporters after more than a week of difficult negotiations with Japanese government and shipping representatives.
This agreement will open trade in Japans ports and liberalize access for US firms, he said.
Creel said, however, that the commission could impose future sanctions if the agreement is not fully implemented. Earlier on Monday, a State Department source told Reuters the governments of the United States and Japan had signed the port reform agreement.
The source said Japanese and US shipping firms and the Japan Harbor Transport Association had yet to sign off on the accord, however.
The source, who asked not to be named, added: Were confident thats not going to be a problem.
The independent four-member Maritime Commission imposed $4 million in fines last month on Japanese ships entering US ports in retaliation for what it said were discriminatory port practices in Japan that have pushed up docking costs.
After three Japanese shipping companies missed a deadline to pay the fines, the U.S. body moved to deny entry to Japanese ships and detain those already in port.
Japan and the United States reached an agreement in principle on Oct. 17 on Japanese port reforms, but the issue of sanctions had held up a final deal until now.
The Maritime Commission had demanded that the fines be paid, and had insisted that it retain the power to impose sanctions against Japanese shipping firms in the future should Tokyo fail to live up to the port agreement.
Japan had asserted that the fines violated the U.S.-Japan Treaty of Friendship, Commerce and Navigation, and demanded their complete withdrawal.
An attorney for the Japanese carriers said Kawasaki Kisen Kaisha Ltd., Mitsui and O.S.K. Lines Ltd. and Nippon Yusen Kaisha paid a total of $1.5 million in a consent order with the commission.
While we continue to believe that the FMCs actions were unfair, unwise and illegal, the carriers reluctantly agreed to make this payment in the interests of removing any further threat of sanctions and moving the reform process forward, attorney Kenneth Quinn said in a statement.
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, Quinn said.
U.S. officials would not comment in detail on the agreement, but said Japan had agreed to streamline the licensing process for ships and to provide government help in creating an alternative system that would allow shippers to bypass the Japan
Harbor Transport Association, which tightly controls port services.
Officials said shippers would be free to negotiate directly with terminal operators without having to go through JHTA. More importantly, the government of Japan agreed to help make sure the new system works.
Creel said the commission would continue to monitor Japanese port services and ensure the pact was carried out.
In a statement issued on Monday, the State Department and Department of Transportation hailed the accord.
The agreement will promote competition, lower costs and increase efficiency in Japans ports, the costliest in the world for loading and unloading ships, the statement said. This will benefit American carriers and consumers as well as Japanese carriers and consumers.
