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World shipping, UNCTAD, and the New International Economic Order

Published online by Cambridge University Press:  22 May 2009

Lawrence Juda
Lawrence Juda
Affiliation:
Graduate Program in Marine Affairs, University of Rhode Island at Kingston.
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Abstract

The New International Economic Order (N1EO) seeks fundamental change in international relations. World shipping has experienced substantial pressure for reforms associated with NIEO goals: controversy focuses around the operation of the liner conferences, the use of flags of convenience, which retain beneficial ownership in developed nations, and the demands of developing countries for a major share in the carriage of their imports and exports. UNCTAD, and in particular its Shipping Division headed by Adib al-Jadir, has become increasingly active in world shipping. The reforms urged through UNCTAD will have a significant impact on the fleets, maritime practices, and interests of the developed world. This study examines UNCTAD's aims in world shipping–the policies being urged, the factors under consideration, and the trends emerging from the operation of UNCTAD. It further examines developed states' attempts to shape, and their reactions to, UNCTAD policies, and the interests perceived to be at stake in the current debate on world shipping.

Type
Articles
Information
International Organization , Volume 35 , Issue 3 , Summer 1981 , pp. 493 - 516
Copyright
Copyright © The IO Foundation 1981

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References

1 Rinman, Thorston and Linden, Rigmor, Shipping–How it Works (Stockholm: Rinman and Linden, 1978), p. 15Google Scholar.

2 M. O. Valente, “The Participation of Developing Countries in Shipping,” in Rajwar, L. M. S. et al. , “Shipping and Developing Countries,” International Conciliation, no. 582 (03 1971), p. 28Google Scholar.

3 In 1976, the last year for which detailed figures are available, developing states exported by weight 60.4% of world export cargoes and imported 17.7% of world import cargoes. UNCTAD, Review of Maritime Transport, 1978, TD/B/C.4/182(31 05 1979), p. 4Google Scholar.

4 I have examined seabed mining in Juda, Lawrence, “UNCLOS-III and the New International Economic Order,” Ocean Development and International Law, 7 (1979): 221–55CrossRefGoogle Scholar.

5 See, for example, the Charter of Economic Rights and Duties of States, UN General Assembly Resolution 3281 (XXIX); Development and International Economic Cooperation, UN General Assembly Resolution 3362 (S-VII); and the Manila Declaration and Programme of Action, circulated by UNCTAD under document number TD/195 (12 February 1976).

6 For an introduction to the shipping industry see Branch, Alan E., The Elements of Shipping (London: Chapman and Hall, 1977)CrossRefGoogle Scholar; Abrahamsson, Bernhard J., International Ocean Shipping (Boulder: Westview Press, 1980)Google Scholar; and Kendell, Lane C., The Business of Shipping, 3d ed. (Centreville, Maryland: Robert F. Cornell Maritime Press, 1979)Google Scholar.

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8 Fighting ships refer to a practice used by liner conferences to eliminate competition from non-conference vessels. The conference would subsidize a ship that would directly compete with the nonconference vessel and consistently undercut that ship's freight rates until it was forced out of the trade.

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10 Ibid., p. 2.

11 In an examination of the incidence of transportation costs and tariffs on United States im-ports from developing states Alexander Yeats has found that on average transport costs account for 11.8% of the total cost of goods at the importing port. The proportion of transportation costs to total costs was as high as 50.7% for imports from Guinea, which consisted largely of bulky, low-value items such as bauxite and scrap metal ores. The proportion of transportation costs to total costs is typically higher for low-value bulk items than for manufactured or processed goods. Yeats, , Trade Barriers Facing Developing Countries: Commercial Policy Measures and Shipping (London: Macmillan, 1979), pp. 184–93CrossRefGoogle Scholar.

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15 According to Karl Fasbender and Wolfgang Wagner, shipping is less and less seen as an industry subject to economic laws and more and more as an instrument for the realization of higher aims of economic policy. This kind of thinking is particularly prevalent in developing states. Fas-bender and Wagner, , Shipping Conferences, p. 24Google Scholar.

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17 Ibid.

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20 United Nations General Assembly Resolution 3035 (XXVII), 19 December 1972.

21 The text of the Liner Code appears in UNCTAD, UN Conference of Plenipotentiaries, vol. 2Google Scholar. Hereafter noted as Liner Code.

22 Liner Code, article 1(1).

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24 Liner Code, article 2(4).

25 Liner Code, article 12(a).

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28 Ibid., pp. 79–80.

29 EEC Council Regulation No. 954/79 (15 May 1979).

30 In the tanker trade the developing states account for 90% of the cargoes but less than 6% of the world fleet of tankers. UNCTAD, Merchant & Fleet Development, TD/222 (05 1979), p. 3Google Scholar.

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33 UNCTAD, Report of the Committee on Shipping, Second Session (02–03 1967), p. 14Google Scholar. For a case study of one developing state and its growing involvement in shipping see Morris, Michael A., International Politics and the Sea: The Case ofBrazil (Boulder: Westview Press, 1979), pp. 267–91Google Scholar.

34 It is interesting to note that UNCTAD does not emphasize the significance of the proportion of labor in total shipping costs but of the possible savings that could be effected by tapping different source of labor. The UNCTAD Secretariat notes that the daily operating costs are the only costs the shipowner can hope to reduce. Thus the labor factor may still be economically significant in modern shipping. UNCTAD, Comparative Labor Costs, TD/222/Supp. 4 (05 1979)Google Scholar.

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43 Ibid., pp. 66,74.

44 UNCTAD, Committee on Shipping, Resolution 33(VIII) (22 April 1977).

45 The group was composed of representatives from Algeria, Argentina, Belgium, Brazil, Bulgaria, Canada, Cuba, Cyprus, Czechoslovakia, Egypt, El Salvador, Federal Republic of Ger-many, Finland, France, German Democratic Republic, Ghana, Greece, Hungary, India, Indonesia, Iran, Italy, Ivory Coast, Japan, Kenya, Kuwait, Liberia, Mexico, Netherlands, Norway, Pakistan, Panama, Philippines, Poland, Somalia, Sri Lanka, Sweden, Trinidad and Tobago, Union of Soviet Socialist Republics, United Kingdom, United States, Venezuela, and Zaire. TD/B/C.4/AC.I/Inf. 1 (21 February 1978).

46 UNCTAD, TD/B/C.4/AC.l/2/Add. 1 (10 January 1978), pp. 7–18. France was not associated with this commentary. In its own commentary the government of France stated that it “can support the general line of reasoning” followed in the UNCTAD report. TD/B/C.4/ AC.l/2/Add. 2 (16 January 1978).

47 TD/B/AC.l/CRP.l (8 February 1978).

48 TD/B/AC.1/CRP.2 (8 February 1978).

49 TD/B/C.4/177, Annex (10 February 1978).

50 Arusha Programme for Collective Self-Reliance and Framework of Negotiations, circulated by UNCTAD as document TD/236 (28 February 1979).

51 TD(v)/NG.V/CRP.15 (23May 1979).

52 TD/Res./120(v) (3 June 1979).

53 Group B statement (2 June 1979).

54 United States, Department of State, Report of the US Delegation to the Shipping Portion of UNCTAD V (n.d.)

55 UNCTAD, The Repercussions of Phasing Out Open Registries, TD/B/C.4/AC.1/5 (24 09 1979)Google Scholar; Legal Mechanisms for Regulating the Operations of Open-Registry Fleets During the Phasing Out Period, TD/B/C.4/AC. 1/6 (27 September 1979); and Phasing Out Open Registry Operations: Beneficial Ownership of Open Registry Fleets—1979, TD/B/C.4/AC.1/7 (22 October 1979).

56 UNCTAD, Repercussions of Phasing Out Open Registries, pp. 7–8Google Scholar.

57 Ibid. According to this study the open registries result in the following benefits for their hosts: Cyprus (1975), $1.6 million (0.2% of GNP); Liberia (1978), $11 million (3% of GNP); Panama (1977), $10.5 million (3% of Government revenues); Singapore, inconsequential. The study also notes: “the figures for Cyprus, Liberia, and Panama indicate revenues of $US 0.33, $0.07 and $0.33 respectively per dwt (dead weight ton) ton. Such revenues are insignificant compared with revenues per dwt ton which may be expected from the operations of vessels. Statistics of various countries for 1977 indicate approximate annual freight revenues for mixed fleets ranging from $US 71 to $132 per dwt ton, with revenues for different categories of ships under various flags ranging from $35 for tankers up to $685 for full containerships.”

58 See, for example, FACS Forum, January and September 1980.

59 UNCTAD, Repercussions of Phasing Out Open Registries, pp. 9–10Google Scholar.

60 UNCTAD, Draft Report of the Committee on Shipping, Ninth Session (09 1980)Google Scholar.

61 UNCTAD, Report of the Ad Hoc Working Group on the Economic Consequences of the Existence or Lack of a Genuine Link Between Vessel and Flag of Registry, Second Session, TD/B/784 (8 02 1980)Google Scholar, Annexes II and III.

62 UNCTAD, Committee on Shipping, Resolution 41(IX) (13 09 1980)Google Scholar.

63 UNCTAD, Draft Report of the Committee on Shipping, Ninth Session, p. 32Google Scholar. On the differences within the EEC on the Liner Code see Larson, Paul and Vetterick, Valerie, “The European Community and the UNCTAD Liner Code,” Law and Policy in International Business, 03 1981Google Scholar.

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65 See, for example, Winther, Rosalyn, “No Easy Answer for Europeans as Japanese Refuse to Budge,” Seatrade, 12 1980, pp. 19–23Google Scholar.

66 P.L. 95–483; 92 Stat. 1607 (18 October 1978).

67 See Axelbank, Robert, “USSR Hits US Ship Legislation,” Journal of Commerce, 29 11 1978, pp. 10, 33Google Scholar.

68 Seatrade, , Latin American Shipping 1979 (Colchester: Seatrade Publications, 1979), p. 15Google Scholar.