The administration of Donald Trump has come up with another interesting idea on shipping. After just publishing a list of proposed tariffs on Chinese ships and shipping it has now broached the concept of “chokepoints” in shipping and how these harm America.
The Federal Maritime Commission (FMC), which is emerging as a policy tool of some importance for the Trump administration, issued a statement on the 17th March outlining the launch of a “non adjudicatory investigation into transit constraints at key maritime chokepoints, focusing on the impact of foreign laws, regulations, and shipping practices”.
It seems that the FMC perceives that its role is to “prescribe regulations affecting shipping in foreign trade” if they are unfavourable to American shipping companies. As part of this mission, it has identified “choke points” as “constraints on transits,” and apparently, these count as some sort of competitive disadvantage.
The FMC has identified seven of these choke points; “the English Channel, the Malacca Strait, the Northern Sea Passage, the Singapore Strait, the Panama Canal, the Strait of Gibraltar, and the Suez Canal” and it is looking to ask a number of questions such as “what are the causes, nature, and effects, including financial and environmental effects, of constraints on one or more of the maritime chokepoints?”, to “what extent are constraints caused by or attributable to the laws, regulations, practices, actions, or inactions of one or more foreign governments?” and to “what extent are constraints caused by or attributable to the practices, actions, or inactions of owners or operators of foreign-flag vessels?”. It appears that the FMC is hoping to investigate if the management of these “chokepoints” is an obstruction to competition
It is hard to know what the importance of this investigation is. Normally, it might be assumed that the FMC was just seeking to improve its understanding of the functioning of the shipping sector. However, such has been the attention that Donald Trump’s administration has given the shipping sector, that the FMC enquiry cannot be dismissed as routine.
Author: Thomas Cullen
Source: Ti Insight
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