AMO Currents - Export-Import Bank cargo preference serves the nation well

AMO Currents - Posted: February 8, 2011

Export-Import Bank cargo preference serves the nation well

In a letter dated Jan. 28, 2011, leading maritime labor and industry interests -including American Maritime Officers and American Maritime Officers Service - urged the Department of Transportation to maintain its support of the U.S. cargo preference provision requiring that all export cargoes financed by the U.S. government be shipped by U.S.-flagged vessels.

With the exception of case-specific waivers, Public Resolution 17 (PR 17) requires all such cargoes - including many Export-Import Bank (Ex-Im Bank) program cargoes - to be carried in U.S.-flagged vessels. Enacted in 1934, PR 17 was codified by Congress in 2006 as section 55304 of Title 46 of the U.S. Code.

"PR 17 has served the nation well," the letter states. "Ex-Im Bank programs have prospered, and U.S.-flag vessels have been able to transport cargo that is vital to maintaining a active presence on the high seas. Indeed, in fiscal year 2010, Ex-Im Bank posted its second consecutive record breaking year in export financing supporting about $35 billion worth of American exports."

The charter of the Ex-Im Bank expires in 2011 and must be re-authorized by Congress by Sept. 30 of this year. "U.S.-flag shipping is a U.S. service which should continue to be promoted by the Bank," the letter states.

"The cargo preference laws are essential to the continued existence of a fleet of privately owned U.S.-flag vessels. This fleet is instrumental to the supply and support of our troops abroad and the maintenance of a pool of trained mariners essential to support the U.S. government's sealift objectives. The privately owned U.S.-flag merchant marine has transported over 90 percent of the equipment and supplies used in the conflicts in Iraq and Afghanistan at a fraction of the cost of other alternatives."