USTR proposal could mean ‘severe blows’ for C’bean economies – Gonsalves

KINGSTOWN, St. Vincent (CMC) — St. Vincent and the Grenadines Prime Minister Ralph Gonsalves, Wednesday warned that the region could face severe economic problems if the United States goes ahead with a proposal to impose a fee of US$1 million per port call on any Chinese-built vessel calling at US ports.

“I want everybody to listen to me carefully. This matter, if implemented as proposed by the US, it will be one of the most severe blows to the economies of the Caribbean,” Gonsalves said during his weekly radio programme on the state-owned NBC radio,” adding, “I don’t want to be hysterical”.

Gonsalves said that the matter was discussed during last Friday’s virtual meeting of CARICOM leaders, as well as with the CARICOM Private Sector Organization (CPSO) last Tuesday.

The US government’s investigation into China’s dominance in shipbuilding, maritime and logistics started under the Biden administration and in January, the Office of the US Trade Representative (USTR) issued its findings on the matter.

In a statement on Feb. 21, the USTR said that “to obtain the elimination of China’s acts, policies, and practices, and in light of China’s market power over global supply, pricing, and access in the maritime, logistics, and shipbuilding sectors, USTR proposes to impose certain fees and restrictions on international maritime transport services related to Chinese ship operators and Chinese-built ships, as well as to promote the transport of US goods on US vessels.”

The high fees being proposed are seen as a way to channel more shipbuilding back to the United States.

CPSO president, Patrick Antoine, has informed the USTR that the fees would lead to “astronomical levels,” the increased cost of goods being moved out of US ports into the Caribbean.

“Indeed, the social and economic ramifications of any such measures by the United States is unthinkable,” Antoine said, adding “the CPSO also recognises the immediate jeopardy which any measure as may be under consideration by the USTR, will hold for CARICOM member states, such as Antigua and Barbuda, Dominica, Grenada, St. Lucia, St. Vincent and the Grenadines, and Suriname, among others, where well over 50% of the ships plying these routes are Chinese constructed”.

Gonsalves said that the move by Washington is also intended to penalise future purchase of Chinese made vessels “by entities wishing to access the US market, both inbound and outbound.

“So they are targeting existing Chinese vessels and they are deterring the future purchase of such vessels by entities going in or coming out of the US,” he said, adding that “these punitive charges target Chinese operators of vessels directly as well as the fleets which operate with Chinese built vessels.

“So they want to deal with the Chinese operators and they want to deal with the  Chinese fleets and in the process privileging US interest and US-built vessels,”  Gonsalves told radio listeners.

“They are penalising the Chinese operators and the Chinese ships, which already exist. They are penalising the operator who ordering ships,” Gonsalves said, adding, “If you want to take US goods out, 20% must be on a US-flagged ship or US-built ship.”

Gonsalves said the Caribbean trade has links with the United States “so we are really exposed to the harmful effects of these policy measures as the main shipping lines serving the region are comprised of a significant number of Chinese-built ships, mostly plying routes linked to ports in Southern Florida.

“The primary operators on these routes as you know are Tropical Shipping … which has at least 47% of its fleet built in China. Seaboard Marine, another company which ply our area, with around 48% of its fleet built in China and King Ocean with about 25% of the fleet built in China,” Gonsalves said, noting that there are other major shipping lines that have announced plans to expand their fleet.

He said these companies intend to do so using the Jones Act, a shortened version of the Marine Act of 1920, “which mandates that goods exported between US ports must be carried on vessels built, owned and crewed by Americans aiming to support the domestic maritime industry.

“You could see straight away that Tropical Shipping and Seaboard Marine  …ships with substantial Chinese fleet going to have some challenges,” Gonsalves added.