THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, April 22, 1996 TAG: 9604200239
SECTION: BUSINESS WEEKLY PAGE: 11 EDITION: FINAL
SOURCE: JOURNAL OF COMMERCE
LENGTH: Medium: 53 lines
An international agreement to end shipbuilding subsidies would not have saved a Jacksonville, Fla., shipyard's bid for a tanker construction job as the yard is claiming, said U.S. Rep. Herb Bateman, R-Newport News.
Atlantic Marine Holding Co. said it lost a double-hull tanker deal to a Spanish competitor solely because the Spanish government gave its yard a 20-percent subsidy, a move that would have been banned under the subsidy-ending agreement negotiated through the Organization for Economic Cooperation and Development. The agreement is before Congress for ratification.
But at a recent shipbuilding conference, Bateman, a key congressional opponent of the pact, said the Spanish yard would have been able to get the subsidies even if the pact was in effect.
``What the Spanish did was perfectly legal'' even if the OECD had been in effect, said Bateman. He said there are a series of loopholes that countries like Spain negotiated into the pact to allow them to continue using many subsidies.
``I believe we could and should have done better'' in the negotiations, said Bateman. ``No exemptions are available to the U.S. yards.''
Tom Jones, vice president of Atlantic Marine, said if an agreement were in place, his yard and other U.S. builders would have a powerful tool to fight foreign yards using loopholes and hidden subsidies.
Yards like Jones's contend that they could compete and win jobs on the international commercial market if only they did not face competitors with subsidies. U.S. commercial subsidies were ended early in the Reagan administration and are not expected to return.
But the larger U.S. yards like Newport News Shipbuilding say they still need government help that would be banned under the OECD agreement, if they are to make the successful transition from the near total dependence on naval work they developed in the final years of the Cold War.
The issue has divided the U.S. shipbuilding industry like none other before. The industry's trade group split into two organizations over the issue, with each organization vigorously lobbying for its position in Washington.
``It is sad that you have divided yourself into two camps,'' said Gregory Hadjieleftheriadis, vice president of Eletson Corp., a Greek shipowner who has been one of the greatest beneficiaries of a U.S. loan guarantee program that would be scaled back under the OECD agreement. ``You should be together,'' he said. by CNB