MARAD, China Ministry of Transport Talks

Maritime Administrator Sean T. Connaughton led the U.S. Delegation in bilateral consultations with a delegation from China’s Ministry of Transport, led by Vice Minister Xu Zuyuan. The talks were held on December 15 and 16, 2008, in Memphis, Tennessee, a major maritime gateway on the Mississippi River and international shipping hub.

The two governments discussed a wide range of topics covering important matters of concern to the maritime sectors of both countries. Both sides agreed that current economic conditions were having an adverse impact on the level of maritime trade between the two countries, but that the long-term outlook for the bilateral maritime trade and relations remains strong. Against this backdrop, the delegations exchanged views on the damaging effects that piracy off the coast of Somalia was having on the maritime trade and possible solutions, security and safety matters, including recent unilateral actions by the European Union to assert control over certification of vessel construction and repair of vessels worldwide.

In addition, the delegations reviewed changes in competition policy, both in China and the European Union, specifically the EU’s elimination of the block exemption for liner conferences and discussion agreements, as well as stricter rules for liner consortia.  There was also an explanation provided on China’s Anti-Monopoly Law, which took effect in August 2008, and reports that an evaluation was underway that may result in possible changes in regulations for the maritime industry.

The two sides compared government policies toward the passenger cruise market, which is of growing interest to Chinese vacationers. In order to expand the Chinese-flag fleet, there is an incentive program in effect that is expected to attract Chinese-owned, foreign-flag vessels to reflag.  The United States explained that both cargo preference and its Maritime Security Program are aimed at maintaining a U.S.-flag fleet for purposes of national defense.

This was the third round of annual bilateral maritime consultations held under the provisions of the U.S.-China Maritime Agreement, signed in 2003. The parties agreed to meet in 2009.