WASHINGTON, D.C. (May 21, 2024) – The U.S. Federal Maritime Commission (FMC) has opened an investigation into a Canadian shipping regulation as a potential unfair trade practice.
The FMC noted, “Based on available information, it appears that conditions created by the Government of Canada (Canada) in connection with regulation of ballast water management systems may adversely affect the operation of United States carriers in the United States / Canada Great Lakes trade, in particular the carriers operating vessels that may become subject to regulation in September 2024, within the meaning of 46 U.S. Code, chapter 423 (Foreign Shipping Practices) (46 U.S.C. 42301-307). Title 46 U.S.C. 42302 authorizes the Federal Maritime Commission (Commission) to investigate these conditions, and chapter 423 authorizes the agency to take action in response.”
American leaders of the Great Lakes shipping industry praised the FMC’s action, calling the Canadian proposal “the epitome of an unfair trade practice” that seems primarily designed to give Canadian vessels a practical monopoly on bi-national Great Lakes shipping.
The Canadian regulation, which American shipping industry leaders believe to be without precedent anywhere in the world, would require treatment equipment on American vessels loading ballast water in Canadian Great Lakes waters even when that water would be discharged in U.S. Great Lakes waters. In effect, the Canadian law would override U.S. law, U.S. Environmental Protection Agency (EPA) regulations, and U.S. Coast Guard regulations for ballast water discharges in U.S. waters. The Canadian regulation would stop U.S. vessels from carrying U.S. exports to Canadian Great Lakes ports so that Canadian vessels would carry all of that cargo. The Canadian government provided a process for Canadian vessels calling on Canadian Great Lakes ports to obtain relief from the treatment requirement but did not provide U.S.-flag vessels serving Canadian Great Lakes ports a relief process to apply the Canadian regulations to U.S. Lakers so as to avoid the unlawful burdens the regulations would otherwise impose.
“U.S.-flagged fleet of ships and sailors on the Great Lakes are grateful to the FMC Commissioners for taking a stand for U.S. workers,” said Jim Weakley, president of the Lake Carriers’ Association, representing U.S. Great Lakes shipping companies. “The proposed regulation is severely biased and shamefully uses a serious issue to impose a trade barrier and increase profits for Canadian companies at the expense of everyday Americans. This is not about protecting the environment; this is about economic manipulation.”
The Great Lakes Maritime Task Force, which represents nearly 80 U.S. entities across the Great Lakes and includes shipboard and shoreside labor, ports, facilities, and shipyards also praised the FMC action.
“If Transport Canada is allowed to regulate U.S. waters on the Great Lakes in favor of Canadian vessels, a precedent will be set that will forever damage the ability of U.S. workers to compete and will further erode the maritime industry in America,” stated Richard Hammer, General Manager of DonJon Shipbuilding in Erie, Pennsylvania and President of the Great Lakes Maritime Task Force.
Great Lakes seagoing labor unions, including the Seafarers International Union, the Masters, Mates and Pilots, the Marine Engineers Beneficial Association, and the American Maritime Officers, said, “The Canadian government should not be allowed to regulate American workers at U.S. facilities and ships on the U.S. side of the Great Lakes. The Canadian intent here is clear, monopolize Great Lakes shipping between the U.S. and Canada and eliminate U.S. jobs through unfair trade practices.”
The FMC, an independent federal agency, is authorized to investigate whether any laws, rules, regulations, policies, or practices of a foreign government result in conditions that adversely affect the operations of U.S. carriers and do not exist for foreign carriers of that country in the U.S. under U.S. laws. A similar inquiry by the FMC in 2005 resulted in the Government of Canada charging U.S.-flag Lakers the same amount for the Canadian Navigation Services Fee that they charged Canadian-flag Lakers. From 1997 – 2005, American vessels paid a significantly higher amount to the Canadian Government for no additional services. That higher fee impacted freight rates and drove cargo to Canadian vessels.
About Lake Carriers’ Association
Since 1880, the Lake Carriers’ Association has represented the U.S.-flag Great Lakes fleet, which today can move more than 90 million tons of cargos annually that are the foundation of American industry, infrastructure, and energy: iron ore, stone, coal, cement, and other dry bulk materials such as grain, salt, and sand.